Author: Linda J. Dawson and Dr. Randy Quinn

FM Issue: Leadership and Operations 2014

The money is pretty good. I like the travel and the interaction with other professionals. The work is always a kick—a challenge. New people, bigger than life personalities and egos, always logistical problems I enjoy solving. It’s a high. And generally, the work in our city is fun. I like the interaction with the movers and shakers. I try to inject an edginess of ‘we can do it’—let’s think big and be on the map!

“But the board and I struggle with each other. First there’s turnover. Even one new member can really change the dynamics of board meetings and relationships. These can be very strong willed people used to getting their way. I work the background and try to make sure the people I would like to come on the board get on.

“Secondly, there are the directors who want all the information they can get, and end up consuming my time and my staff’s time. Endless phone calls, committees formed to help us with operational tasks, second-guessing my decisions, wanting a spotlight. I seem to spend as much time dealing with the board as I do trying to get my real work done.

“And then board meetings. Let me put it this way: I try to control the agenda and keep it as non-controversial as I can. We get all the standard reports and button them down, like financials, building safety reports, new positions and hires. I like to have one or two discussion items figured out ahead of time that board insight could be helpful with. If I have a political storm brewing in the city, I might bring in the executive committee to give them a head’s up. I might need their cover.

“But I’ve had over-the-top tension-filled drama, leading up to the meeting, during it and continuing after it’s over. Members try to take over, members ill prepared, members questioning why they spent the time or money to attend and talk about operational items. Glad handing and backstabbing. It can feel like a cat and mouse game. I always have to be on my toes, or it’s out of control. Mainly, I wish I could just do my job.”

For as long as there have been boards and CEOs, the two have struggled mightily with the challenge to define and successfully execute their respective roles.

A few organizations manage to make things work despite the confusion. But for the most part, boards and CEOs stumble over themselves trying to “lead” their organizations. The result? Organizational paralysis, confused and demoralized professional staff, and frustrated board members trying to add value in their own way. It is a recipe for power struggles.

The underlying reasons for this dysfunctionality can be numerous. This article focuses on one of the more prevalent reasons: agendas that drive boards and their CEOs to try to do the same job.

How is this manifested? Most boards have no defined governance “operating system.” Rather, their job tends to be defined, either by tradition or by default, by meeting agenda content. Boards do whatever their meeting agendas ask them to do with little regard for the relevancy of those items to a board’s legitimate work.

“An operating system is designed to keep the board focused on the 30k foot level, on strategy and potential. It should keep us out of the weeds and allow the competent paid staff team to do their jobs without undue interference.” — Kim Bedier, CFE, 2014-2015 IAVM Chair

First problem? The CEO creates most agendas. This means that the operational leader is defining the governing board’s work. The fact that the board is hearing about or deliberating on the operational organization—which the CEO was hired to deal with—means that the board is spending its time focused internally and issue by issue, not on its own higher-level policy work and organizational outcomes.

Items on these boards’ agendas? Sometimes a varied laundry list of individual members’ concerns—relevant to the unified board or not. But most often, numerous staff reports about operational concerns (whether the board has indicated any interest in the topics or not). And typically, a number of “important” operational decisions that someone considers so significant that the board must sign off on them as a means for creating an operational comfort zone. Dilemma:

If the board is being asked to approve an operational recommendation, the stakes are high. The CEO and the board are participating in making the very same decision.

If this defines the way your board operates, (CEO recommendations for board approval), let us ask you to consider: who is accountable for a decision made by the board based on the CEO’s recommendation? Both parties had a hand in the decision. The unavoidable result of making organizational decisions this way is role confusion and diminished accountability.

We believe the role of the board and the role of the CEO are distinctly and fundamentally different. Roles are not based on the importance of a decision, but rather on the nature of the decision and whether it is one reserved by policy to the board or one delegated to the CEO.

This means that the board should have in policy a very carefully crafted job description and policies clarifying its unique responsibilities. Other board policies clearly define the CEOs role and authority in achieving the board’s standards for operations and in achieving outcomes.

Agendas must change. The unified, board-driven agenda addresses governing level discussions and decisions about outcomes and advocacy. CEO items provide the board full information about operations and outcome achievement. They assure the board its standards are being met. But, these agenda items stop short of asking for board blessing or approval within areas of delegated authority.

Teamwork?

Sometimes boards and their CEOs consider joint decision-making to be the epitome of effective teamwork. Their meetings consist of discussions about programs, personnel and general operations and are intended to result in decisions all agree to be the best way for how the organization is to proceed.

In our minds, however, teamwork has nothing to do with joint decision-making. It has nothing to do with board approvals of CEO recommendations. The two parties (board and CEO) getting together and jointly deciding how to achieve board-defined organizational outcomes is not teamwork.

Both parties doing the same work is not teamwork. It is duplicative and overlapping work. Rather, effective teamwork means clearly defining the unique roles and responsibilities of the board and CEO, with each performing that role well.

Doing separate, clearly defined, and complimentary work is teamwork.

Think for a minute about your favorite college or professional football team. Consider the skills necessary for the quarterback to do his job, the skills necessary for the wide receiver, and the skills required of the left tackle. Very different skills are required, and very different assignments are given to each player position. They don’t all do the same jobs. But when each does his assigned job, good things usually result. So it should be with boards and their CEOs.

Changing the Culture

So how does a board and its CEO get from here to there?

The IAVM Board of Directors took very deliberate steps over the past several months to move into a completely new governance operating system. Its goals? To better define the board’s and CEO’s roles; to remove itself from operational micromanagement; to assign clear CEO accountability for decision-making; to achieve organizational sustainability; and, most importantly, to define greater outcomes for all members.

We are privileged to support the board as it makes its transition into its new governing model, Coherent Governance®. CG is our own governance design, created specifically to help both boards and their CEOs eliminate role confusion and replace it with clear delegation of authority and corresponding accountability for decisions.

A CG board governs very complex organizations using a handful of very meaningful, targeted and inclusive policies, logically divided into four quadrants:

1. Governance Culture. GC policies define the board’s job and purpose, how members will interact with each other, and a number of other values related to the board itself as the governing entity for the organization. One GC policy is the board’s own self-determined annual work plan, which drives agendas for all board meetings during the year.

2. Board-CEO Relationship. BCR policies clearly specify the degree of delegated authority the board assigns to its CEO. They also define the CEO’s job description, specify the accountability of the CEO and how the CEO’s performance will be evaluated. Carefully developed BCR policies can and usually do eliminate any confusion of roles between the board and the CEO.

3. Operational Expectations. OE policies are the board’s means for controlling the operational organization without “helping” the CEO run the organization via the traditional approval process. OE policies state the board’s level of concern about all fundamental operational areas, offering the CEO the advantage of advance knowledge of the board’s values about such things as the budget, financial administration, personnel administration, and other critical areas of operation. The CEO and staff are required to operate the organization within the board’s policy values, but otherwise are freed to exercise their own professional judgment about how to do their jobs.

4. Results. Results policies define the board’s expected organizational outcomes. After all, every organization exists to provide some value for someone. This is where those ultimate outcome expectations are stated, providing the CEO and staff clear direction about what the board considers to be successful organizational performance.

These last two categories of policies, Operational Expectations and Results, are the sum of the CEO’s (and therefore the entire staff’s) job description: be sure the organization operates according to these defined operational standards, and be sure the organization produces these expected outcomes. What more should any board expect of its CEO than these two fundamental performance objectives?

Coherent Governance is elegant in its simplicity.

Most boards using the model effectively govern their organizations with fewer than 30 policies. The sum of the policies is a set of performance standards for every part of the organization, including the board itself (GC policies), the board’s relationship with the CEO and the CEO’s own performance evaluation (BCR policies), the operational side of the organization (OE policies), and the standards for organizational accomplishment (R policies). Each one of the policies is monitored at least once each year, which provides a continuous means for assessment and improvement.

In fact, a board and organization using all the tools afforded them via the CG operating system, will have in one inclusive package, the following components:

• a set of board performance standards and a means to self-assess the board’s actual performance;
• an annual work plan for the board, which will control and drive every board meeting agenda;
• a CEO job description and CEO evaluation tool – no surprises;
• clearly-stated standards for operational performance and a means to assess whether they are being met;
• unambiguous statements of expected organizational outcomes and a means for measuring whether they are being achieved (the board’s part of a typical organizational strategic plan).

Board: Consider the power of governing policies that define your own work and agendas to focus with unified discipline on outcomes and advocacy.

CEO: Consider the freedom to work professionally with dignity, creativity, and authentic accountability for organizational achievement. Eliminate the shadowy and dangerous role of creating work for the board through agendas.

Consider Leadership Clarity via a VERY Different Route. Undertake true collaborative teamwork eliminating the shell games that create ambiguity, frustration and fail to build a legacy of sustainable professional, board, and organizational success. FM