This week we had Fred Galloway as our guest. Fred is a mentor to us. We love talking to him about governance and joking around with him. We picked Fred’s brain about boards’ responsibilities. Fred explained how boards have ultimate legal responsibility for their organizations and explained in detail the board’s’ oversight responsibilities. As a bonus, Fred commented on how boards should respond to the COVID-19 crisis. Fred has over 30 years of experience working with boards, so it was great to hear his examples of boards that have helped steer their organizations to success and others who haven’t fulfilled their role as well. 

Two things stick out from our conversation. First, Fred talked about boards getting into a comfort zone where they negate their legal responsibilities. People become complacent, they think this is a noble cause, we all know each other well, the disasters that have plagued other organizations could never happen here. I borrow from US politics calling this “the shining city on a hill” mindset. People assume their organization is special. Sorry, it’s not. Good governance involves creating a healthy culture, but it also works to prevent all the harm that can damage an organization. Even when things seemingly operate well, the board has a legal duty to protect the organization.

Secondly, near the end of our interview Fred alluded to the importance of director independence. Boards should “be friendly to, but not friends” with their Executive Director. The board’s obligation is to all those that the organization serves, and directors have a responsibility to ensure the organization performs and is protected from harm. Friendships with management may sometimes affect the impartiality of directors and consequently their ability to fulfill these responsibilities. 

What else did we learn?

We can sure talk. This was a long episode. We’ll do our best to keep future episodes between 25 and 35 minutes and if we expect a great longer conversation, we will split it into two.

Finally, we recommend “The Imperfect Board Member by Jim Brown” as our resource of the week. It’s a short book on the experience and growth of a new board member

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