Good Article from Robert C. Harris
Successful boards govern more, manage less
The board settled in for a productive meeting. The agenda listed several significant items, including the approaching legislative session, a fundraising campaign and the selection of the site for the 2018 conference.
The initial 60 minutes entailed listening to a dozen committee reports (which actually took 90 minutes). Then came the first item requiring a motion — selection of the 2018 convention city and hotel.
The convention committee was thorough in its recommendation: “To contract with [XYZ] Hotel and Conference Center.” They explained it is the only venue large enough to accommodate growing attendance and trade show booths.
The agenda allotted 15 minutes for convention discussion. The first director offered thanks to the committee and made a motion to accept. At that point another director said, “I just have a question, do you know if I will receive hotel loyalty points if I book a suite?”
That conversation took 20 minutes. A third director commented that he thought last year’s convention registration desk was understaffed and asked what could we do about it. The 15 minutes grew into an hour (even though the committee report was excellent and had been provided in advance). Finally, the recommendation was accepted by a motion of the board.
The board slipped from governance to management when they began asking about the loyalty points and staffing.
Governance
Governance is defined as the board making decisions on behalf of members or stakeholders — note that the definition does not include management discussions.
The board is guided by the governing documents, including bylaws, articles and policies. The mission and strategic plan should frame nearly every discussion.
Though conversations about staffing, office practices and the banquet menu may be interesting, they are not governance. Management discussions doing committee work distract from an agenda crafted on priorities.
Micromanagement
It is easy to slip from governance to management. However, management is the role of staff; governance is the role of the board of directors.
Directors should avoid the temptation to manage. Since nearly everyone on the board has management experience, there is a natural temptation to go there. Fewer directors have been oriented to their governance roles. Micromanagement would be considered interference.
Balanced partnership
It requires a partnership of governance and management to advance the mission. Staff is charged with the day-to-day operations and administrative details. The board is responsible for advancing the mission and protecting the resources.
The IRS defines the roles of staff as implementing the decisions of the board. Let the staff do their work in accordance with job descriptions, policies and procedures. They should not be second-guessed by the board.
Directors should refrain from commenting on staff performance. For example, asking staff members if they are happy with their job and how long they plan to stay with the organization could be inferred that the director is suggesting they leave or are dissatisfied with performance.
Verify and trust
Directors do have responsibility for oversight of the organization. This is best accomplished by hiring the right staff, relying on policies, and putting safeguards in place to protect assets.
There will be times when directors have questions, but a deep dive at a board meeting into management is a dangerous road. To check on meaningful outcomes of board meetings, read a recent set of minutes: Do they reference initiatives advancing the mission or a listing of reports and updates?
Good board members should practice the concept suggested by President Ronald Reagan in his dealings with the Soviet Union: to “trust, but verify.”
For example, a director might ask, “Is the board covered by directors and officers insurance?” Staff will provide an answer like, “Yes, we have a $2 million policy.” If a director wants more information, ask for it after the meeting through proper channels of communication. The temptation to follow up with questions at the board meeting about the cost and seller of the insurance will distract from governance.
Govern more, manage less
A high-performing board stays focused on governance. Delving into management at the board table will derail the more substantive discussions and desired outcomes.
