e-Zine Article Archives Ezine - Issue #013 The True Role of the Board - How Governance has been Hijacked
Ezine - Issue #013 The True Role of the Board - How Governance has been Hijacked
Conscious Chief Executives E-zine - Issue #013The True Role of the Board - How Governance has been Hijacked
Steven Bowman Why is the term 'governance' used so often as a descriptor for all things that have gone wrong in an organization. '.....due to a break down in governance', '....not enough governance oversight', '....their governance needs to improve'. The other side of this is where good governance is seen primarily as having the right sort of processes, procedures, charters and policies to tick the boxes of good governance. This notion of governance focuses on governance as a system, a series of checks and balances in an organization, the 'fiduciary' oversight of assets on behalf of the organization's owners and stakeholders. To me, this is a hijacking of the possibility and promise that governance can give to an organization and its stakeholders. What if governance was a lot simpler than most people believe it to be? What if true governance was for the Board ..
What if all the governance processes and policies were just tools to assist the Board 'to make the choices that create the future for the communities they serve'? The implications of this simple description of governance are profound. ....Make the Choices Most people misidentify 'making a decision' and 'making a choice'. Typically, a decision is seen as something that is final, that is the answer, that has to be right, that once made should not be changed, because, after all, it is the decision... If a Board regards decision making as finding the right answer, then once they have found the answer, they typically stop looking for other alternatives and stop questioning whether that 'decision' is actually working for them. If a Board is looking for the answer, then the information they get after they have found the answer will typically be constructed and filtered to show how right the answer is. There is little questioning around alternatives and options. What if we had the point of view that we would do all the required analyses (financial, risk, strategic ethical etc) and then from amongst the various options that were available, make a choice...and also reserve the right to change that choice if other things changed? Practical application
...That Create the Future The role of the board is not to meet and receive reports about how busy the senior executives and the organisation generally is. The role of the Board is to make the choices that create the future for the communities they serve. Creating the future is all about being aware of what is happening in the strategic environment (what's happening out there..), focusing on the things that are likely to have an effect on your organization (what does it mean to me...) and then choosing what needs to be modified, created or stopped (and what do I need to do about it...). The definition of being strategic that I have taught to thousands of executives and Board members is exactly that... 'What's happening out there.. what does it mean to me... and what do I need to do about it...' And doing this constantly. The main role of the Board in this is to ensure that they are constantly scanning the potential future, discussing the potential implications of this for the vision and key strategies of the organization, and making choices about what needs to be done. Practical application
...For the Communities They Serve The purpose of your organization is not to perpetuate itself...it is to make a difference in the communities you serve. These communities will differ from time to time, will change as demographics and strategic focus shifts, and need to be continually monitored for the impact your organization is having. This raises the whole issue of stakeholder engagement to a new level. Stakeholder engagement should be about-who are our stakeholders this year, and has this changed or is likely to change next year....what do our stakeholders perceive as our impact on these communities....how do we engage with our stakeholders to facilitate gr eater change (are they part of our strategic planning, our risk management, our communications about the change that is occurring...). This focus on the communities you serve, at the Board level, maximizes the possibility of the Board being strategic, and minimizes the possibility of the Board being self perpetuating and self-interested. And the discussions that this leads to are fascinating, interesting and can truly lead to change in our world. Which is why our organizations exist in the first place. Practical application
The true role of Board meetings is to facilitate Board members to 'make the choices that create the future for the communities they serve'. The practical application of this simple definition is what creates truly generative Boards that fulfil the promise that the organization offers to its communities. What's New?Nonprofit Masterclass in Strategic Leadership and Innovation
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Next issue will focus on nonprofit Board remuneration (should we, shouldn't we, and why), a very emotive topic that has arisen more frequently in the past few months. (Mind you, I might change the topic if something even more topical comes in. Let me know what you would like to see!)