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Three Obstacles to Healthy Board Governance

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I’ve been drawn to leadership since my late teens, and I learned early on that loving leadership meant either sitting on or engaging with various governing boards. I began participating on governance boards 30 years ago. I started out on a parent council for a local school as a community representative, as well as on a neighbourhood board in our city. I also sat on the board of the church I pastored, in an ex-officio capacity, as I was on staff. All these boards functioned with various levels of competencies and degrees of skill. Over the last 30 years I’ve sat on several dozen boards. Some gave oversight to local non-profit or neighbourhood groups while others oversaw Provincial and National organizations and movements.

I quickly noticed there were stark differences between boards. This included how each board viewed their role in the organization they served. They differed on how the agenda was formed (and how closely it was followed); whether there was a generative conversation or if the board just digested reports for approval; they differed in the ways various CEOs and Board Chairs interacted; and in the ways policies were drafted and implemented. Several boards I’ve sat on desperately needed to be overhauled, while others were models of governance excellence.

I read several helpful articles and books on board governance to grow in my understanding of boards. In 2007, I heard about The Imperfect Board Member, by Jim Brown. I devoured the book, noted areas I needed to improve on, and purchased copies to hand out to other board members I served with. Among a rich reservoir of wisdom, I discovered three obstacles to healthy board governance that have impacted the way I view governance and have guided me as I lead boards and consult with them. Boards cannot be healthy when they are viewed as a necessary nuisance instead of a vital component of the organization; they are unhealthy when they abdicate their responsibility to direct and protect the organization; and they are unhealthy when board members talk as customers and expect to be heard as owners.

Boards Can Be an Invaluable Asset

  • Viewing your board as a necessary nuisance instead of a vital component of the organization creates an unhealthy board. Over the years I have spoken with an array of CEOs from various publicly traded companies, non-profit organizations and charities who view their boards as a hindrance to their organization. Their board only exists as a forced legislated necessity. They miss the significant contributions their board members could offer from the decades of experience and honed skill sets they bring to each meeting. Jim Brown states, “…the best boards are teams of highly talented and experienced people who bring unique strengths and complement each other’s weaknesses (XIV).”

The starting point for most CEO’s is acknowledging that their company or organization will be better served with a high functioning board that vibrantly connects with each other and brings a variety of competencies and skills. When interviewing board members, you want to ensure that they are a good fit for the culture of the organization. Boards should create a culture where the various opinions and values around the room are respected as they work together to direct and protect the company or organization.

Each board member should know why both they, and as the others serving with them, are on the board. To keep them engaged, board members need to contribute meaningfully to the organization. Knowing what skills, experience, and expertise each member brings to the board is necessary for the board to function as a team. A skills matrix, which includes these areas, as well as the sectors where each board member is connected, is crucial for a healthy board. When searching for new board members the board should know what gaps they have in their skills matrix and what sectors they may want represented. Board cultures must be intentionally developed and designed.

Boards Must Direct and Protect the Organization

  • Secondly, unhealthy boards abdicate their responsibility to direct and protect the organization. Jim Brown writes, “The most fundamental discipline of a board of directors is to direct the organization for high performance. Directing is a proactive discipline, focused on the future (164).”
  • Directing the organization is both demanding and challenging. It is demanding because of the time it takes to direct. You need to be invested enough to understand the organization as well as some of the emerging trends in the industry or sector. Bringing together the board and leadership team to discover a preferred way forward is challenging but necessary.

Whether you are drafting new identity statements for the organization in the form of mission, vision or values or you are developing a strategic plan to move forward, directing the organization is a vital function of the board. Organizations who are not contemplating next steps will quickly grow stagnant.

Some organizations can move forward with a CEO who is skilled at directing and a board that acquiesces to them. Some organizations can move forward with a board who is skilled at directing and a CEO that acquiesces to them. Organizations where the governing board, CEO and leadership team work together to determine the preferred future are often not only the healthiest but the most successful in accomplishing their mission and vision while setting new standards in their industry or field of expertise.

The board also protects the interests of the owners of the organization whether they are stockholders, members, or clients, as the organization moves forward. They protect the organization because they are invested in what the organization has become and where it’s heading. Directing and protecting the organization is crucial to its health.

Board Members Must Respect Their Role

  • Thirdly, a board is unhealthy when board members talk as customers and expect to be heard as owners (31). I recognized this challenge for board members in my early years of board work. Board members would come to meetings and prioritize their personal agenda (that wasn’t on the meeting agenda).
  • In a school board meeting, it occurred when a board member talked about the way other children treated their child at lunch demanding a solution from the principal with support from other board members.
  • On a neighbourhood board, some members were concerned with their property, and how the new proposal to the area may impact them (without any analysis). They demanded the board stand with them against the proposal (even though the proposal was objectively good for the neighbourhood).
  • In a church meeting, one of the members would mention that their teenagers didn’t connect well with the youth pastor insisting that the board fire them (even though a recent survey showed the vast majority were thrilled and supportive of the pastor). The board member worked to rally the others to ‘fire’ the youth pastor even though employment issues were the responsibility of the lead pastor (CEO).
  • On a heath centre board, a board member, who was also a client, was concerned with the lack of attention they were receiving in a program they participated in, advocating to change the program for their benefit.

I’ve witnessed board members come wearing the ‘wrong hat’ on dozens of boards I’ve sat on, whether their budget was $1200 or $20 million annually. And I know I’ve done it as well.

It’s not that there isn’t a place to voice these concerns and share your unease, but board members abuse their power when they talk as customers and expect to be heard as owners.

Jim Brown comments, “In every effective organization there are five essential roles: the owners, the board, the CEO, the staff and the customers…For sustained success, it is crucial that the organization (1) is clear about these roles and who fills them and (2) understands how one role relates to another. Removing or inhibiting any of these roles will cause the organization to suffer (162).”

Board members must be clear about their role when they meet. This is most challenging when they have other ‘roles’ in the organization. For example, a teacher who sits on a school board who has two children in the school and whose cousin is the caretaker for the school, has layers of relationship and connection, but on the board, they are there as a board member, not a parent or employee.

Each year board members should have a conversation about when the Board Chair or CEO through the Board Chair, has the authority to call into question a proposed agenda item or the conversation that is occurring at the board meeting, when either are outside of the scope of the board’s directives. During a meeting, board members need to keep each other in check and at times ask if the conversation is appropriate to their board work. If not, the Chair can take a moment to explain the proper channels for working through that issue and follow up after the meeting. This problem is a systemic and frequent dilemma that paralyzes many board meetings.

Healthy boards and board governance structures have the ability to set the pace in an industry or sector, being change agents who can picture a preferred future and know how to get there.

Over the last year, I’ve had the privilege to connect with Jim Brown on several occasions. I appreciate his passion for healthy board governance and the wisdom he brings. If you haven’t done so, I’d encourage you to read through his book, The Imperfect Board Member and look for areas where you can sharpen your governance skills.

If you’re sitting on a board that could use some coaching, I’d be delighted to chat to see if I can be of some assistance. You can contact me at Cline Consulting. I believe healthy governance boards are deliberately established to thoughtfully envision what is next for the organization as they positively impact a community, city, or sector, forging the way forward together.

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