Thoughts on Episode 2 – Why Governance Matters

This episode focused on why the work of the board matters. Ultimately, we care about clarifying roles and how decisions are made because we are trying to maximize the impact of board and staff efforts. Having clear expectations on who makes decisions and how can help organizations avoid conflict and focus their efforts on achieving their missions. 

As I dug through the mountains of fan mail that we received this week, I realized that I talked a lot about the principles of good governance but never explicitly stated them. In 2006, a national study on board governance practices in the not-for-profit and voluntary sector was released, in it the honourable Bob Rae, the former premier of Ontario, explained governance principles as:

transparency, clear allocation of roles and responsibilities, financial probity, accountability, and looking at outcomes. Recognize that the principles of good governance apply to all organizations regardless of their size. The structure will have to be tailored to the institution depending on its size, but the principles remain the same (p. 18).

What Andrew and I call the “art and science of good governance” recognizes these principles of good governance but also that no utopian structure exists. The science of good governance commits to the principles Rae explains. The art of governance finds methods of applying these principles that work for your organization. When Andrew and I talked about rubber stamp boards, I overreached saying that there are merits and drawbacks to the rubber stamp approach. The idea that the board wants to allow space for the Executive Director to do their work without interference has merit. You can’t fairly measure someone’s performance unless you have left them some freedom to determine how they will accomplish results. However, the board needs to do its job to set clear goals and policies that protect the organization from harm. Then the board needs to be active in monitoring the organization to ensure that results are achieved, and that goals and policies are updated as the environment evolves. The board needs to be a driver of organizational policies and strategies not simply reactive to the Executive Director’s initiatives. The board is a driver not a passenger. The board should approach its role according to the common governance adage of nose in and fingers out.