Thank You To Mel Gill for this Blog Contribution
“What difference do Boards really make to associations? What is governance anyway? How can Boards add value? How can we evaluate their performance?” These are questions about Boards many of us have asked or heard in recent years. Numerous scandals in high profile organizations in North America have been attributed to failed governance and spurred demands for more effective and accountable governance.
Approximately ten percent of the volunteer hours Canadians provide to not-for-profit organizations is devoted to governance. That’s a lot of folks across the country seeking improvements to their governance…too important a function to trust to trial and error.
Discussions about governance often occur without common agreement on what it is and what accountability means. Governance may be defined as the exercise of authority, direction and control of an organization to ensure that its purpose is achieved and proper accounting is given for results. Accountability is the capacity of electors (owners) and other key stakeholders to call decision-makers to account for their actions. Effective accountability has two components: ‘answerability’ and ‘consequences’. The first is the requirement to respond periodically to questions concerning one’s official actions. The second is the need for the application of sanctions for breach of rules.
There is ample anecdotal evidence that the work of not-for-profits usually continues despite flawed governance. The job still gets done! Yet there is also evidence that governing boards can enhance organizational performance by understanding and undertaking their governance role in a manner suitable for their particular organization.
The ‘Results-Based’ Board reflects as an emerging approach to governance that seeks to ensure effective governance, accountability and organizational performance. It acknowledges a legitimate Board role in ‘operational’ activities such as development of public policy positions or fundraising. It also legitimizes Board activities in support of management or ‘management’ functions that might be necessitated by critical events or transitional phases. It reorganizes Board structure to focus on clearly defined Board responsibilities and the measurable results of organizational activities and management processes.
The basic premise of governing for results is grounded in the following paraphrase of Zen paradoxes:
• If you don’t know where you’re starting from and you don’t know where you’re going- any road will get you there!
• But how will you know if, or when, you’ve arrived?
• Or whether you’ve made any progress at all?
There is no single approach to governance that is suitable for every organization. However, clarity of purpose, goals, roles and expectations, as well as trust, mutual respect, honest communications and collaborative relationships are essential ingredients of effective board and organizational performance, regardless of the structures and policies in which they are lodged.
Most directors don’t simply want to fill a chair at the Board table or a line in their resume. They want to add value to the organization they serve and add benefit for its members and clients. And they want to be helpful to the CSO, rather than an extra burden or thorn in the side…although any long-serving CSO will have had some share of the latter.
Boards can act as a drag on an organization if they don’t know their role and how it relates to management or by overloading management and staff with unmanageable expectations and, often redundant committee work.
Many Boards do well with an informal approach that is grounded in the adage ‘start where you are, use what resources you have and so what you can’. However, any organization regardless of its stage of development, structure or size, can derive added value from organizational leadership (Board and management) that cultivates a culture of systematic planning, monitoring and evaluation focused on the results it seeks to achieve. And it can do so without investing in the rigorous application of a prescriptive governance model.
A Board that is ‘governing for results’ ensures the organization has a clear vision and goals with objectives that are as concrete and measurable as possible for the particular organizational context. It concentrates its efforts on areas of Board, rather than management, responsibilities – unless, of course, it is an operational, collective or management Board. Regardless of Board type or organizational form, a more rigorous approach to strategic planning and performance monitoring can enhance Board effectiveness.
A Board committed to ‘governing for results’ relies heavily on its CSO as a full partner in developing direction and policies but maintains sufficient independence from management to ensure it can objectively evaluate CSO performance. It clearly delegates to the CSO the responsibility and authority for achieving approved objectives. The three basic organizational functions – governance, management and work – are highly integrated, regardless of the size and complexity of the organization.
Successful governance is as much in attitude as it is in action…though both are essential. Success depends on the right mix of Board skills, chemistry and personal motivation. It depends on common commitment to cause…the organization’s vision and mission. And it depends on a high degree of trust and teamwork…within the Board, and between Board and management.
A focus on results requires the Board and management to adopt a logical framework for establishing performance benchmarks for the organization, its programs, the CSO and the Board. It ensures that adequate systems are in place to measure performance, and monitors or audits that performance regularly. It measures and monitors the indicators of goal attainment that matter most to the organization’s overall success.
The Board and management must be clear on the problems they wish the organization to address (or needs they wish it to fill); develop a clear vision of the idealized world they’d like to see; articulate a mission that defines what role they see their organization playing in progressing toward that vision; enunciate realistic goals and SMART (Specific, Measurable, Achievable, Relevant to the mission, and Time delineated) objectives; measure performance against established targets; anticipate and mitigate perverse secondary impacts; and, respond to changing circumstances with flexibility and adaptive strategies.
A Board that is focused on results must ensure that adequate systems are in place to identify and manage real potential risks to clients, staff and volunteers, and to conduct audits to assess compliance with legislative requirements, bylaws, governance policies and established standards of practice. It engages stakeholders in planning, ensures that its mission and objectives are clearly communicated, its decision-making processes are transparent and it accounts to stakeholders for the results of organizational investments and efforts.
A Board ‘governing for results’ must be introspective. It regularly reviews its practices to ensure that it preoccupies itself with the most important issues facing the organization, ensures that it has good information for working on those key issues, maintains good communications with key stakeholders, sets clear expectations and standards for the performance of the Board and the organization, and reflects on its own performance to ensure that it is open to innovations in its own practices and adds value to the efforts of management and staff.
The Harvard Business Review identified four basic characteristics of board work that matter and which fit well with the ‘governing for results’ approach. “First, the Board concerns itself with do-or-die issues central to the institution’s success. Second, it is driven by results that are linked to defined timetables. Third, it has clear measures of success. Finally, it requires the engagement of the organization’s internal and external constituencies.”
A Board is more likely to ‘add value’ to staff and management efforts if its members experience a sense of belonging, collegiality, fun, personal recognition, opportunities for learning and development, and a commitment to quality work as components of a positive workplace culture.
Yes, fun! I vividly recall a new member to my Board commenting on how unusual it was in her experience to join a Board where the members actually seemed to like one another and have fun. But don’t let the fun distract you from your focus on results!
Mel Gill is President of Synergy Associates, Consultants in Governance and Organizational Development.
Governing for Results – How Boards Can Add Value !
