GovernanceasLeadership:ReframingtheWorkofNonprofitBoards

Tradi<onalExpressionsofthe“Du<es”ofaBoardfromquickinternetsearch:

“Dutyofcare:Boardmembersareexpectedtoac0velypar0cipateinorganiza0onalplanninganddecision‐makingandtomakesoundandinformedjudgments.

Dutyofloyalty:Whenac0ngonbehalfoftheorganiza0on,boardmembersmustputtheinterestsofthenonprofitbeforeanypersonalorprofessionalconcernsandavoidpoten0alconflictsofinterest.

Dutyofobedience:Boardmembersmustensurethattheorganiza0oncomplieswithallapplicablefederal,state,andlocallawsandregula0ons,andthatitremainscommiDedtoitsestablishedmission.

Inaddi0ontoitslegalresponsibili0es,theboardactsinafiduciaryrolebymaintainingoversightofthenonprofit'sfinances.Boardmembersmustevaluatefinancialpolicies,approveannualbudgets,andreviewperiodicfinancialreportstoensurethattheorganiza0onhasthenecessaryresourcestocarryoutitsmissionandremainsaccountabletoitsdonorsandthegeneralpublic.”

Governanceas

Leadership

TypeIIIGenera0ve

ThreemodesofGovernance:AllCreatedEqual;AllAreNecessary

  Theboard’s“du0esofloyaltyandcare”

  FinancialDiscipline:PreventtheM,wasteormisuseofresources

  InformedOversight:Ensureresourcesaredeployedeffec0velyandefficientlytoadvancethemission

  MissionFidelity:Safeguardthemissionagainstuninten0onaldriM&unauthorizedshiMsinpurpose

  PrimacyofOrganiza<onalInterests:Requiretrusteestooperateinthebestinterestsoftheorganiza0on

  Oversight:   ofaudits,budgets,investments,compensa0on,facili0es,fundraising   enactpolicies&prac0cestodiscouragewaste,preventabuse,

promoteefficiency

  PerformanceMeasurement:   Askwhether&howeffec*velyprogramsadvancethemission   Evaluateexecu0veperformance

  Promotelawful&ethicalbehavior:   Ensurecompliancewithstandardsofsafety,legality,honesty

  Avoideventheappearanceofconflictsofinterest   Directorindirectfinancialbenefits   Rela0onshipswithcompe0ngorganiza0ons

FiduciaryOversight  Canweaffordit?  Didwegetacleanaudit?

  Isthebudgetbalanced?

  Shoulddepartmentalbudgetsincreaseby2%or3%?

 WilltheproposedprogramaDractenoughclients?

  Isitlegal?

FiduciaryInquiry  What’stheopportunitycost?  Whatcanwelearnfromtheaudit?

  Doesthebudgetreflectourpriori0es?

  Shouldwemoveresourcesfromoneprogramtoanother?

  Howwilltheprogramadvanceourmission?

  Isitethical?

Reflec<onsonFiduciaryIssues:

  Whatdoweholdintrust,andforwhom?

  Whatarethefiduciary,butnonfinancial,rolesofourboardandcommiDees?

  Howdoweknowtheorganiza0onisfulfillingitsmission?

  Whatistheevidencethatweareatrustworthyorganiza0on?Whataresomeexamplesof0meswhenweearnedthe0tleof“trustworthy”?

  Whatareourmajorfinancialvulnerabili0es?Whatarewedoingasanorganiza0onandaboardtoaddressthem?

  Oversight:   ofaudits,budgets,investments,compensa0on,facili0es,

fundraising   enactpolicies&prac0cestodiscouragewaste,preventabuse,

promoteefficiency

  PerformanceMeasurement:   Askwhether&howeffec*velyprogramsadvancethemission   Evaluateexecu0veperformance

  Promotelawful&ethicalbehavior:   Ensurecompliancewithstandardsofsafety,legality,honesty

  Avoideventheappearanceofconflictsofinterest   Directorindirectfinancialbenefits   Rela0onshipswithcompe0ngorganiza0ons

Discussion:  Ques0onsforclarifica0onordeeperunderstanding?

 Aretherebasicfiduciarytasksmissingorincompleteinyourboard?

InthefaceofwidespreaddisillusionmentwithstrategicplansthathavetoooMenproducedliDleornovisiblebenefitstoorganiza0ons:

Whatdoesstrategicgovernancelooklike?

strategicthinking(notstrategicplanning)

  Setpriori0es   Reviewandmodifystrategicplans   Monitorperformanceagainstplans.

  Theboardaimstoconstructconsensusaboutwhattheorganiza0on'sstrategyshouldbe.

  Todothis“newwork”trusteesandmanagementneedtoworkdifferently:   Theboard’s

  commiDeestructures,  mee0ngs,  channelsofcommunica0onmustfosterstrategicthinkingandcul0vateatruestrategicpartnershipwithmanagement

“…therealmandroleoftheboardononehand,andmanagementontheotherhand,cannotbeen*relydisentangled.Likepartnersondoublestennis,neitherpartyinTypeIIgovernancecanaffordtobepar*cularlyterritorialorbothwilllose.ThisshiCfromboardasmonitortoboardaspartnerspawnsthree major changes in prac0ce.”

  Flexible

  Adaptedtostrategicpriori0es,notadministra0veopera0ons

  FiduciarycommiDeesremain   E.g.,finance,investments

  Moretaskforces/adhocworkgroups  E.g.,staffdevelopment,technology,marke0ng,communityimage

  Avoidtoomanyproformareportsmakeroomformoreconversa0onstosetandtacklestrategicpriori0es  Usetechniquesforrobustdiscussions:e.g.,“suspendtherules”,silent

starts,roleplays/simula0ons,etc.

“…boardsshouldfindandfocusonthestrategicbull’seyewhilemanagementlaysplanstogatherthebowsandarrowsandtoshootstraight.”

“Tothinkstrategically,trusteesmustunderstandwhatinfluen*alinternalandexternalstakeholdersthink.”(p.73)

  Conversa0onswithcons0tuents,experts,linestaff,communitymembers,etc.  “Accesstounfilteredinforma*onandunfeLeredopportuni*esto

askques*ons…precipitategreaterinsightandbeLerques*ons.”(p.74)

  Datalinkedtostrategicpriori0espermitaboardtoassessprogress,spotdownturns,andul0matelyrethinkstrategy.

TYPEIGovernance  Managementdefinesproblems

andopportuni0es;developsformalplans.Boardlistensandlearns;approvesandmonitors.

  Boardstructureparallelsadministra0vefunc0ons.Premiumonpermanency.

  Boardmee0ngsprocessdriven.Func0onfollowsform.Protocolrarelyvaries.

  Stafftransmitstoboardlargequan00esoftechnicaldatafromfewsources.

TypeIIGovernance   Boardandmanagementthink

togethertodiscoverstrategicpriori0esanddrivers.

  Boardstructuremirrorsorganiza0on’sstrategicpriori0es.Premiumonflexibility.

  Boardmee0ngscontent‐driven.Formfollowsfunc0on.ProtocoloMenvaries.

  Boardandstaffdiscussstrategicdatafrommul0plesources.

Discussion:

 Ques0onsforclarifica0onordeeperunderstanding?

 Wheredoesthisunderstandingofstrategicgovernanceaffirmyourpresentprac0ce?

 Wheredoesitchallengeyourpresentprac0ce?

Genera<veThinking:   istheessen0alfounda0onforgenera0vegovernance

  ishowtrustees“makesense”oftheworldofinforma0on/data/knowledgetheybringtotheboardroom

  isacogni0veprocessfordeciding   whattopayaDen0onto   whatitmeans   whattodoaboutit

Whatdoesitlooklike?‐‐Howdoesitwork?   No<cingcues&clues

  Selec0vepercep0on:weseewhatwefocuson/lookfor   Learningtolookfortheunexpected/workingattheboundaries

  Choosing&usingframes   Frames=the“filters”weuse,theperspec0vesweadopt   E.g.,Structural,HumanResource,Poli0cal,Symbolic

  Thinkingretrospec<vely   Emergentstrategyinvolvesdiscovery   ReviewthepasttospotpaDerns/themesthat“makesense”   Thepowerofthosewhoshapethe“dominantnarra0ve”

When/wheredoesithappenmostoXen?

Organiza<onencounterschallenge

ProblemisFramed

StrategicResponseIden<fied

Plans/tac<csformulated

Execu<on

When/wheredoesithappenmostoXen?

Organiza<onencounterschallenge

ProblemisFramed

StrategicResponseIden<fied

Plans/tac<csformulated

Execu<on

Genera<veThinking

Whereareboardsmostfrequentlyinvolved?

Organiza<onencounterschallenge

ProblemisFramed

StrategicResponseIden<fied

Plans/tac<csformulated

Execu<on

Whereareboardsmostfrequentlyinvolved?

Organiza<onencounterschallenge

ProblemisFramed

StrategicResponseIden<fied

Plans/tac<csformulated

Execu<on

OpportunityforGenera<vework

Time

Cues,clues,framing,retrospec0ve

PlansStrategies

Amount

Time

TheGenera<veCurve

TypicalBoard’sInvolvementCurve

OpportunityforGenera<vework

Time

1.  LookforGenera<veLandmarks•  Ambiguity•  HighStakes•  Strife•  Irreversibility

2.  Searchouttheembeddedissues•  e.g.,reasonsforhighstaffturnover

3.  Spot“TripleHelix”situa<ons•  All3modesinvolvedinasingleissue

PlansStrategies

1

GovernancebyFiat

Trusteesdisplaceexec.

2

TypeIIIGovernance

Trustees&exec.collaborate

3

GovernancebyDefault

Trustees&exec.disengage

4

LeadershipbyGovernance

Exec.DisplacesTrustees

EXECUTIVEENGAGEMENT

TRUSTEEEN

GAG

EMEN

Thigh

low

Discussion:  Ques0onsforclarifica0onordeeperunderstanding?

 Whereareyoufeelingaffirmedinyourpresentprac0ce?

 Whereareyoufeelingchallengedinyourpresentprac0ce?

TypeI‐Fiduciary TypeII–Strategic TypeIII‐Genera<veNatureofOrganiza<ons Bureaucra0c OpenSystem Non‐ra0onal

NatureofLeadership Hierarchical Analy0cal/visionary Reflec0velearners

Board’scentralpurpose Stewardshipoftangibleassets Strategicpartnershipwithmanagement

Sourceofleadershipfororganiza0on

Board’scorework Technical:overseeopera0ons,ensureaccountability

Analy0cal:shapestrategy,reviewperformance

Crea0ve:discernproblems,engageinsense‐making

Board’sprincipalrole Sen0nel Strategist Sense‐maker

Keyques<on What’swrong? What'stheplan? What’stheques0on?

Problemsaretobe SpoDed Solved Framed

Delibera<veprocess Parliamentary&orderly Empiricalandlogical Robustandsome0mesplayful

Wayofdeciding Reachingresolu0on Reachingconsensus Grapplingandgrasping

Wayofknowing Itstandstoreason Thepiecesallfit Itmakessense

Communica<onwithcons<tuents

Limited,ritualizedtolegi0mate Bilateral,episodictoadvocate Mul0lateral,ongoingtolearn

Performancemetrics Facts,figures,finances,reports Strategicindicators,compe00veanalysis

Signsoflearninganddiscerning