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Reflection on Episode 15: Board Orientations, Meeting Packages and Governance in the News

We have very big, very exciting news! We’ve been informed that the Governance Guys is the 41st top-rated management podcast in Japan! With your continued support, we look forward to continually climbing the ranks.

We discussed a local news story that touches on governing in the pandemic, managing reputation, and conflict between a Board and CEO. An important observation is that sometimes board will have one hand tied behind their back when managing reputation. When legal proceedings are involved or where ethical considerations require the organization to protect employee or beneficiary privacy, the board will be limited in its ability to make sure its version of a story is heard. Sometimes reputational perception will be unfair. Board members need to have the tough skin to deal with this reality. To feel more comfortable making tough decisions, board members should make sure they have channels to hear different perspectives on organizational values, priorities, and strategies. As outsiders hearing these stories, we should recognize we likely are not hearing the whole story and show empathy to imperfect people trying to run complex organizations.

On board orientation, we recommend orientation for all new board members with an open invitation to returning board members. Inviting returning board members offers an opportunity to refresh their understanding of their role, but also allows an opportunity for creating shared understandings. New board members should connect with more experienced board members in a mentoring relationship and regular board development sessions should happen throughout the year. We’ll continue the conversation on board development in our next episode.

Andrew and I also discussed what we like to see in a board meeting package. I tried writing out a list of everything we mentioned. When I saw it, it occurred to me that we are demanding guys. Those high expectations though reflect a belief that good process can influence good decisions for the organizations we care about. Those high expectations also demonstrate that much is expected of those entrusted to oversee and manage organizations that have the potential to make important contributions to our communities. Listen to episode 15 to hear more.

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Reflection on Episode 14: The importance of understanding your Board’s governance model

After a long hiatus, we’re back! Our guest this week was Marion Thomson Howell, President of Shaugnessy Howell and Executive-in-residence at Capacity Canada. With extensive experience serving on a variety of boards, Marion shared her expertise on different board models.

Personally, this was one of my favourite episodes. Marion clearly explains each model and the benefits and risks of each. We hope this episode will prompt anyone serving on a board to think about which model currently fits their board and which board model would best serve their organization.

Marion outlines four models of boards:

Working boards are volunteer-driven community organizations with no staff.

Traditional boards have staff but there is limited role clarity around the separate roles of the board and staff.

Policy boards clearly define the role of the board and CEO as well as expectations and key processes through policy. Policies are monitored to ensure compliance with expectations.

Results-based boards are more outcomes-focused. These boards receive regular reports on progress towards board defined goals and may be less prescriptive in defining processes that must be followed to accomplish the goals.

These models make it easy for us to compare different types of boards and to make some generalizations, but it is important to remember boards may combine some characteristics of different models and that boards are constantly changing.  

Further, a board may evolve between models. For example, a working board may become a more traditional board once it develops the resources to hire staff. Factors such as board composition and environmental pressures may prompt these changes.

Boards are not always consistent. One challenge may prompt a board to take a more results-based approach, but another might prompt a board to temporarily shift to a traditional model. Different projects may require different tools.

These models can also be aspirational. A traditional board may want to improve their risk management so will work towards the policy model. I tend to see these models as a progression, with a hybrid of the policy and results-based board as the ideal.

These certainly are not the only theories of governance or board models. There are different ways to explain and predict board behaviour, but Marion has provided us with a clear foundation for board members to understand their board’s work.

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Reflection on Episode 11: Values at work with Dr. David Malloy

On Episode 11 our guest was Dr. David Malloy, Principal of King’s University College. Dave helped us understand what values are and how they can be put to work in organizations. Values-based leadership isn’t easy but boards shouldn’t shy away from it. Here’s what Dave had to say partway through our conversation:

Making decisions based on numbers is so damn easy. You know, the bottom line, there it is, let’s move on. Or making decisions based on policy, it follows policy, or it doesn’t. It follows procedures or it doesn’t. That’s the easiest form of decision-making. A favourite author of mine Christopher Hodgkinson calls those decisions “reducing to managerialism”. That’s so easy. The difficult decisions and the decisions that are leadership decisions are ones that are value based, because you’re going beyond policy, you’re going beyond the numbers to make a morally consistent choice. Those are more difficult decisions because they are a bit more amorphous than a number. I think that’s where leadership lives. That’s not where managerialism lives. That’s where leadership lives, at the realm of values. It’s hard.

So what did we learn? Dave gave us some practical steps on how boards can put values into action.

First, recognize your limitations. Boards may not be best positioned to identify an organization’s values but rather should initiate these conversations and listen to their employees and those they serve to identify values.

Second, for new leaders or board members entering an organization, observe artifacts and rituals to help understand what an organization values.

Third, recruit board members who have the same values as the organization and include values education in board training. We all have a general sense of what values are, but some training can help us develop a vocabulary for discussing how we put values into action.

Finally, use values as a screen for decision making. When your board faces a dilemma, identify your options, then identify how each option fits with the organization’s values. Keep those values front and centre so that members of the organization and community can hold each other accountable for practicing those values.

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Reflection on Episode 9 with Chris Makuch: Don’t fall asleep at the wheel

The song “Don’t Fall Asleep at the Wheel” by Red Simpson tells the story of a veteran trucker offering advice to a beginner trucker. Red offers lots of great lessons to the young man including “try out your brakes… try to make time to read all the signs if you’re truckin where you ain’t been”. But, most of all, he offers his most important piece of advice – “don’t fall asleep at the wheel.”

It might be a bit of a stretch (and you’d really have to like old time country music), but Red’s song may offer something of value to Board members. I thought of it after reflecting on the conversation we had with Chris Makuch on episode 9. As we have noted before, the simple role description of the Board member as described by Jim Brown is to “direct and protect”. While this description is fairly straightforward, the execution of the role is a bit more complex. There are lots of factors for Board members to consider when they are discerning how to direct and protect their organization. Most of all, you don’t want to be perceived to be “asleep at the wheel” and neglect some aspect of the business that is preventing it from achieving its goals.

Our conversation with Chris reminded us of the importance of staying alert and having a clear understanding of who it is that “owns” your organization. Every organization has some set of “owners” or group that they are ultimately accountable to – be it shareholders, government, funders, the public, etc. The Board is ultimately acting on behalf of these owners and when the perception is that things aren’t going well, Board members are vulnerable to being removed. There are mechanisms in place to appoint, renew, replace, and remove Directors in any organization. It is critical to be aware of how those mechanisms operate as well as how your organization and its owners are measuring success. If the owners are uneasy with your performance or if they see large gaps in your business model, they may look to replace the Board and exert their influence so that they can “right the ship” according to the direction they plan to head. As a result, it is necessary to primarily focus on your organization’s health but to also keep a close eye on who owns the corporation and how they may push and pull levers to force decisions at the Board table.

In publicly owned corporations it is obvious that the owners are the shareholders. The challenge can be understanding who the shareholders actually are. Chris argues for the need to have transparency so that the Board knows who owns the corporation and can regularly engage with shareholders to build good relationships (hence the issues with proposed changes to form 13f). You may want to consider giving him a call if you find yourself in a situation on a Board without regular check-ins with shareholders. One of Red Simpson’s other pieces of advice is to “watch out for bears” – some sage wisdom for corporate Board members and a great reminder that professionals like Chris and MaisonBrison can help you keep an eye on an often overlooked but critically important piece of information.

In a not-for-profit corporation, the “ownership” is a little murkier. No one technically “owns” the corporation however there are overarching authorities that can significantly impact the work of the organization when their priorities differ. Government programs, new policies, or changing funder priorities, for instance, may force the Board to consider how they should react to the various policy levers at play that are outside of their control. If the Board is “asleep at the wheel” and not aware of these outside influences then it may be time for a serious rethink of who is around the table. It may also be time to give a directive to management to start bringing this critical information forward on a regular basis so that we can be aware of it, not be surprised by it, and ultimately stay focused on our purpose and mission.

So friends, stay focused on what matters and don’t fall asleep at the wheel.

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Reflection on Episode 8 with “Governance Doctor/Queen” Cathy Brothers

This week Cathy Brothers, CEO of Capacity Canada joined us. Cathy works to increase the impact of Canadian non-profits. We jokingly call her the governance doctor because she works with so many organizations, she has a pretty good idea of what makes boards healthy and what ails them. (Her other nickname, earned in her many years of assisting boards, is the “governance queen”. ) We were fortunate she was able and willing to sit down with us.

So, what did we learn?

Importance of Role Clarity
In previous podcasts, we’ve identified role clarity as a principle of good governance. Cathy says that some questions of governance and role clarity “may seem intellectual” but they have critical implications. Role clarity helps a board recruit good members because candidates can more clearly assess whether the role is right for them. Additionally, nomination committees have clear expectations against which to assess candidates.

Clear expectations help board directors understand and perform in their roles. What do board members need to be clear about? Their role is oversight and strategy. Cathy encourages boards to look at “what’s coming down the road” and develop a vision of how we can serve the community better. Our benevolent service sometimes isn’t enough. Clarity about who makes decisions and how those decisions are made helps focus efforts and prevent conflict.

Intentional Board Recruitment, Development and Evaluation
Andrew asked a damn good question. What should boards do when they have a problematic board member? Toxic board members damage organizations by driving away others and distracting from the board’s important work. Cathy urges us to prevent problematic board members through recruitment, development, and evaluation.

When recruiting board members, go beyond the standard skills matrix and also look at behaviours. Someone may be a successful CEO/lawyer/accountant/star volunteer, but they may also be a huge pain in the ass to work with. All things being equal, choose or find a candidate who is a delight. Recruitment should identify those who work well with others, understand the role of the board, think critically yet constructively contribute to strategy. Purposely recruit board members who have the potential to take on leadership roles. The only thing worse than not having anyone who wants to be Chair is only having one person who wants to be Chair who doesn’t have the confidence of their colleagues. Cathy suggests putting board succession planning on each agenda so that it stays an active item.

Board education can help improve performance of individual members and the overall Board. Maybe someone isn’t performing at a high level or they are being disruptive because they don’t understand their role. Education and frank conversations about board performance may be enough to improve board cohesiveness and performance.

Regular evaluation gives the board an opportunity for members to understand their own performance and to offer feedback on each other. Cathy says board members can either make improvements based on their evaluation or “weed themselves out” because “most of us won’t hang around where we’re not making a contribution”. Regular board evaluation is critical.

Why We Care About Governance
Finally, a story Cathy told brought me back to why I care about governance. Cathy said she got into governance because she volunteered for organizations to make a difference and eventually realized that there was a considerable amount of time and resources being squandered because there weren’t effective decision-making processes. Good governance should offer us the opportunity to maximize our impact as individuals and organizations. Check out our conversation with Cathy here.

andrewjjardine What we have learned

Reflection on Episode 7: Why Mission Matters

The book Start with Why by Simon Sinek is a convincing read for anyone wondering about the importance and power of a clear purpose and mission for an organization. One quote that summarizes Sinek’s findings is, “all organizations start with WHY, but only the great ones keep their WHY clear year after year.” This was a quote that I had in mind when we had a chance to sit down with Dr. Gillian Kernaghan, CEO and President of St. Joseph’s Health Care. I’ve met many people who worked at St. Joseph’s and one thing that is consistent is the strong sense of mission that each employee feels when they show up to work each day. It is remarkable that an organization as large as St. Joseph’s and with as diverse a workforce can still animate mission and purpose for everyone.

We got a chance to speak with Dr. Kernaghan and ask her about the role of the Board in keeping mission at the forefront of everything they do. She offered lots of great examples for how the organization does that and how the Board regularly talks about mission (you can check out the podcast for more of that). One of the tips that stuck with me was to include a question for reflection on the agenda for the end of each meeting – how did our meeting, our discussion, and our decisions serve our stakeholders and further our mission?

Once mission is firmly entrenched in Board discussions, it trickles down through the rest of the organization. Dr. Kernaghan described it as a cascade that starts at the top and works its way through senior management and then throughout the rest of the stakeholders. If mission, vision, and purpose are not firmly planted then you cannot expect to harvest any fruit from your work. Think of it like this tree:

Vision, mission, purpose is the root of what you are trying to do. It needs to inform the Board and must shape the conversations and decisions that the Board makes so that the organization can stay on task and meet its mandate. There needs to be alignment starting at the roots all the way through to the “fruit” – the outcome of your work. Feeding and nurturing the roots is the first step to making sure your organization has the potential to be healthy, productive, and purposeful. It is an awesome responsibility and we are grateful for leaders like Dr. Kernaghan who are showing us the way to keep governance grounded in what is most important.

andrewjjardine Boards, What we have learned

Reflections on Episode 6: Board work during a pandemic – what to do when there is no playbook

A Board’s role does not change in a crisis. The dual role of the Board to protect and direct (as Jim Brown writes in The Imperfect Board Member), remains in place whether your Board is on a summer break when times are great or when you are wrestling with the chaos of a global pandemic.

That being said, the intensity of the level of change in the external environment will require a Board to increase the level of attention they are paying to how the organization is faring. Plans for reopening for the year ahead not only need some consideration from the Board but those plans will benefit from the scrutiny of the people around the table. When businesses, schools, and offices were closed back in the spring, the next step was not to simply pop open the binder marked “What to do in a global pandemic when everyone is required to stay at home for several months and no one knows what is going to happen from day to day.” There is no step by step playbook that is guiding our organizations. There is, however, the Board and a dedicated staff who will put the best interests of the organization at the forefront of their decisions and who are armed with their set of questions to keep everything on track. Board members need to be mindful that their CEO will be likely dealing with frequent stressful situations while s/he is trying to make decisions “in the weeds”. As a result of the demand for the CEO to be looking inward right now, there is a heightened need for the Board to stay focused outward , with the mission and purpose of the whole organization as the primary lens.

In 2019, the Florida State University football team stopped using a conventional playbook for their season. Typically a team will have a thick binder of plays from which they will draw during a game so getting rid of a playbook was pretty radical. Here’s what one of the players said about the strategy:

Not having a playbook means that the players have to know exactly what they’re supposed to be doing at all times.

That means a lot of repetition. It also means a lot of time in the film room.

“We have to watch so much film and you have to stay around your coaches in learning so much because we don’t have a playbook,” Terry said. 

“You have to be around and we have to stay focused and embodying and what you have going on because with no playbook, I can’t say it’s harder but it’s so simple we have to just stay focused and buy in.” (https://www.tallahassee.com/story/sports/college/fsu/football/2019/07/19/florida-state-buying-kendal-briles-no-playbook-offense-willie-taggart-james-blackman/1728926001/)\

I think there are some lessons for Board members here. In this time of uncertainty and in the absence of a “playbook”, be clear about your role, spend extra time understanding the challenges facing the organization, be prepared to ask tough questions, be supportive of each other and your CEO, and stay focused on the horizon and the mission.

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Episode 5: The Imperfect Board Member

“Pobody’s Nerfect” says a popular bumper sticker; apply that wisdom to how we govern. The beauty of boards is that none of us has absolute knowledge, so we rely on each other to balance and complete our ideas. Recognizing our limitations is critical to building an effective board culture.

This week Jim Brown who wrote The Imperfect Board Member joined us for a conversation to build on our earlier episodes about the board’s role. The Imperfect board member follows David a corporate CEO who struggles in his interactions with his company’s board. Additionally, David recently joined a community organization’s board hoping to offer his skills to improve his neighbourhood. The book follows David’s governance challenges as a new friend Trevor offers insights on how David can be a better CEO and board member.

A key takeaway from the book is to avoid being a lone ranger. As a corporate executive, David has built his career on his ability to get things done. Frustration is his corporate role leads David to charge ahead with planning an initiative for his community organization. After hours of preparation, David presents his plans to his community organization only to find the reception is not what he expected. Trevor helps David understand that he got out ahead of the rest of the team. The community board had not prioritized the issue David was trying to address and did not expect his presentation. Plus, David started putting in place a concrete plan before the board had an opportunity to discuss options. Trevor quips “recommendations are decisions in disguise”. It is essential to ensure there is board buy-in and approval for major new initiatives.

Andrew and I have discussed whether David or Trevor are based on Jim. At first, we thought that Jim was David, a highly competent executive who had learned through trial and error how to govern. After speaking with Jim, based on his kindness, generosity with his time and clear way of explaining governance we think he may be Trevor. Perhaps like Soloveitchik’s (1965) Adam I and Adam II, all board members have a little bit of a struggle between David and Trevor within us that we need to manage.

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Episode 4: Role of the Individual Board Member

This episode gave us a chance to muse together about the importance of having a clear understanding of the role of the individual Board member. Here are some more thoughts we had “offline” that we wanted to share.

Let’s think of an organization as a ship.  A ship has a defined structure, a clear purpose (moving people/things from A to B), and a crew with a variety of roles and responsibilities. It has to use the external elements (ocean, weather) but also in some cases struggle against them to complete its mission. It’s easy to imagine the various crew members as staff members and the Captain and their team as the fearless leaders turning the ship and charting the course. Where, though, does the Board fit in?

In an organization, the Board is supposed to set direction and monitor progress. The Board should have a keen awareness of the external environment to measure how close the organization is to fulfilling its purpose and mission and to consider outside challenges and threats. The Board should be both a resource for the CEO and a team of critical questioners to constructively challenge decisions and keep things on track.

The individual Board member, therefore, finds themselves in an important position on our ship above. While the crew and Captain are undertaking their important tasks and maintaining the ship, the Board member keeps their eyes focused forward. Consider the sextant, an old tool used by sailors to locate the ship as they cut through the middle of the ocean. The sextant is effective because from your ship you could observe the location of the stars, sun, moon and then compare those to the horizon. As you carefully record your measurements, you can make sure you are still on track and ask for adjustments from the Captain accordingly.

Now consider what we said about the Board above. A Board member needs to contribute to setting direction, monitoring progress, and understanding the external environment and how it may impact the organization.  Each time you review a report, join a meeting, and reflect on your role as a Board member, consider yourself as the person on the ship using the sextant to look out ahead and monitor whether or not you are still headed to your destination and, ultimately, fulfilling your purpose.

sextant
Image credit: Bernie Bernard TDI-Brooks International, Inc.

(For more details on the sextant, check out: https://www.canadashistory.ca/explore/science-technology/navigator-s-sextant)

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Episode 3- The Role of the Board with Fred Galloway

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