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  Comparing 3 Different Approaches to Board/Staff Alignments Potpourri

Canadian FundRaiserA nonprofit organization recently asked me to help it figure out what “type” of board it should have. A colleague suggests that directors should first engage in an existential introspection of what it means to be a board member and what it means to be a board, as a starting point for improved governance.

Boards have scant time for such soul-searching. Indeed, they are often pressed for sufficient time to attend to the basic business of the organization. As boards are increasingly challenged to improve their governance, they often seek a prescriptive governance model or descriptive board type, to adopt or adapt so they can get on with the job of governing.

There has been a proliferation of such models or types in the past two decades. Among the many proffered by reputable authors are heroic, conjoint, traditional, policy governance, strategic, transformational, representational, corporate, advisory and contingency models. Some have introduced their own, sometimes complicated, jargon – some theoretical and others more practical. Each has some distinctive features. All have some characteristics that overlap with those of other models or board types.

The majority of nonprofit boards oversee small organizations with few resources. Some may subscribe to particular value sets, such as those that guide co-operatives and collectives. While all have governance responsibilities, many of these are necessarily more focussed on operational or management matters. In such cases, directors may wear three hats – governing, management and operational.

Dynamic hybrids

Most of the boards that I have studied in my research, and encountered in my consulting practice, develop a dynamic hybrid of several board types, adapting concepts and practices that best fit their particular circumstances.

In one case, the board and staff share operational responsibility for development of public policy positions, public education and policy promotion while otherwise respecting the Carver “board ends/executive means” division of responsibilities in the areas of finances, human resources and program administration.

In other cases, the board is active in collective bargaining and personnel selection, which in larger organizations is typically left to management. Active board engagement in the work (operation) of the organization is characteristic of fundraising boards and service clubs, among others.

One of the biggest causes of dysfunction in traditional boards is the failure to delineate clearly the respective governance and management roles. Such boards typically have a committee structure that parallels management and operational functions (eg, finance committee, human resources committee, programs committee, public relations committee, etc). This inevitably invites board intrusion into operational detail. Meeting agendas typically mimic this structure.

Focusing on management and operations instead of on results often impedes the ability of boards, wearing their governing hat, to add value to the organization and to account meaningfully to key stakeholders.

Results-based becoming common

The results-based approach to governance is a hybrid board type that is emerging in many leading-edge nonprofits. It addresses weaknesses identified in other approaches through a judicious use of committees structured around board, rather than management, responsibilities.

The executive committee (poorly used in many nonprofits) carries responsibility for leading strategic planning and evaluating CEO performance. A governance committee is responsible for regular review of bylaws, governance policies and practices as well as board (member) recruitment, development and evaluation. Risk management and quality audit committees ensure mitigation of risk, establish clear measures of organizational performance in key areas, monitor and audit performance, and report on results. The board-ends/management-means distinction is maintained for the general management of finances, human resources and program operations.

As noted earlier, not all board types have governance as their primary focus. Here we compare three that do, on a variety of dimensions.

Traditional:

General focus – operations/event driven; Leadership – CEO dominant, chair is link to board, executive committee comprises core group; Planning – CEO leads, committees vet, board reviews and approves; Committees – parallel management functions; Accountability – CEO dominant in reporting to key stakeholders; board nominally responsible.

Policy governance:

General focus – policies driven: ends and governance processes; Leadership – board ends/CEO means; Planning – board ends/CEO means; Committees – ad hoc task forces;

Accountability – CEO reports to full board, which monitors policy compliance and reports to stakeholders.

Results-based:

General focus – Vision/results driven; Leadership – full board/CEO partnership to set direction and expected results; Planning – CEO leads, actively engaged board links organization to community; Committees – based on board responsibilities; Accountability – board dominant, sets direction, monitors, audits and reports on results, CEO reports to full board, Executive committee members act as core advisers

The results-based board (sometimes referred to as an audit/oversight board) is distinct from the policy governance board in four key ways:

1. The CEO is a non-voting member of the board with full entitlement to attend and participate in all meetings and discussions.

2. The CEO is a full partner with the board in direction and policy-making.

3. The board’s general focus is on auditing results rather than on policy compliance.

4. The board uses standing committees to guide, monitor and audit board, CEO and organizational performance.

Board members are selected for community representation and commitment to the organization’s purpose, and may be used for selected tasks in their area of expertise. The board’s focus is on values, mission, strategic planning, objectives, effectiveness in achieving goals and efficient use of resources. Board members are usually community members who have a significant personal interest in the public benefits of the organization.

Not involved day-to-day

Although the results-based board monitors performance, it is not involved in day-to-day operations. It is similar to a policy governance board in this sense, and in its focus on organizational goals and objectives.

Committees used for monitoring and auditing the performance of the board, CEO and organization typically include an executive committee, a governance committee, an audit or risk management committee and a quality assurance or program audit committee.

The results-based board differs from the traditional board in four key ways:

1. It uses committees to do the board’s work rather than to review management activities.

2. The general focus of the board is on governance responsibilities rather than on operational matters.

3. The general focus of the board is on results (ie, input efficiency, outputs and outcomes).

4. There is a full partnership between the board and CEO; neither the board nor the CEO dominates the relationship.

No single approach to governance has proven suitable for every organization. General insights can be derived from an analysis of the strengths and weaknesses of specific models or typologies. But no matter which approach is used by an organization, if it is to be effective, actual practices must be adapted to the specific circumstances of the organization.

Suit their circumstances

There is a growing convergence of expert opinion that the most effective boards, regardless of the size, complexity or mandate of their organizations, concentrate their attention on those matters that are crucial to success or survival; that they focus on measurable results within defined timetables; that they engage in regular monitoring of the manner in which business is conducted, the efficient use of resources and the achievement of objectives; that their decision-making is transparent; and that they provide proper accounting to key stakeholders.

In the metaphor of Juran’s assumption, they focus their attention on "the critical few, rather than the trivial many", regardless of whether these are operational, management, or governance (strategic or fiduciary) issues.

The most successful boards, within this framework, develop a collaborative partnership with senior management; seek agreement between key stakeholders on vision, values, goals and expectations (tempered by the reality of available resources); ensure clarity with respect to roles and responsibilities; establish constructive processes for resolution of conflicts and conflict of interest; and cultivate an organizational culture characterized by trust, teamwork, mutual respect, flexibility, adaptability, and responsiveness in the face of the ever-changing realities, resources and needs of consumers.

For further information: Mel Gill, President, Synergy Associates, consultants in governance and organizational development, 57 Westpark Dr., Ottawa ON K1B 3G4, 613/837-8757, fax 613/837-1431,mel.gill@synergyassociates.ca, www.synergyassociates.ca; Gill is the author of Governing for Results: A Director’s Guide to Good Governance.

 
Canadian FundRaiser
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