BOARD LEADERSHIP A B I M O N T H L Y W O R K S H O P W I T H

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How Bonrds Can Enable the CEO to Handle Even the Most Sensitive Matters

IfYou W m t It Done Right, Delegate It!

E HAVE all heard, “If you want it w done right, do it yourself.” However, managers everywhere have had to learn that “doing it yourself” is not an option when there is an overwhelming amount of work to do. Management as a field of study and practice exists to address the difficulties caused by being accountable for more than you yourself can possibly do. Let me describe and then discuss a rather specific delegation difficulty that many professional and trade associations encounter.

devastating impact on the livelihood of individual members. Nowhere is this more evident than in the disciplinary functions of a self-governing profession. It is commonly felt that professional peers are the only persons qualified to administer discipline to association

Associations can have a potentially

IN THIS WORKSHOP

ON A PERSONAL NOTE.......... .......... 2

CASE IN POINT ............................. 3 What If the Committee Chair Just Wants to Know?

CEOS! GUIDING YOUR BOARD TOWARD BETTER GoVER”CE ..... 6

members charged with misconduct. Consequently, as an association’s ruling body, the board is likely to have a direct hand in adjudicating misconduct or malpractice actions.

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Everyone is best served when the board does not get involved in the administration of discipline.

In many ways the arrangement makes sense. You can make a case that physi- cians are the most competent judges of physicians and that accountants are the best judges of other accountants. But what I question is why the board must be directly involved. I believe (and will argue, shortly) that everyone involved is best served when the board does not get involved in the administra- tion of discipline but rather governs disciplinary action in the same way it governs other aspects of the organiza- tion, that is, by proper delegation.

sional associations’ disciplinary Although I am here discussing profes-

processes, there are many situations in which, even though there is a CEO accountable to the full board for opera- tional matters, board committees become involved in overseeing staff and even performing staff work. The reason always given for this intrusion of board members into sub-board activity is that, as professionals, they understand what is required and must therefore have a direct hand in this or that process.

But allow me to expand on the disci- plinary matter with a real example from a real board. The association in my exarr- ple has authority to discipline its mem- bership and, like most, had formed a disciplinary Committee. The board’s dis- cipline committee would review the com- plaints against members, decide which should be heard, conduct the hearings, and render a disciplinary decision.

After some investigation, I found that the staff did almost all the process- ing. Staff arranged forms and methods for the public to register charges. Staff made sure members knew how to behave if a charge of misconduct were raised against them. Staff processed charges, dismissing those that were not within the jurisdiction of the associa- tion and forwarding for further work those that qualified. Staff studied and wrote briefs on the circumstances and took statements from the “litigants.” Staff set times and venues for committee meetings, seeing to it that committee members had sufficient preparatory materials. Staff put all the paperwork into place after a verdict was reached by the committee.

(continued on page 4)

Delegate It! (continued porn front page)

As you might guess, the committee members were busy people. To schedule them for meetings was a horrendous affair and, of course, the staff had no control over whether the members came prepared. Regardless of how poorly board members performed, staff members could not pressure or require them to do anything. Meanwhile, board members often inappropriately exercised board authoritywith respect to staff actions. In other words, staff members could not restrict board members’ access to administrative activity, even though they were ostensibly present for only a specific and circumscribed task.

Board members often inappropriately exercised board authority with respect to staff actions.

When a CEO is held accountable for an outcome and given the authority to pursue it, he or she can and will aggressively set out to do so. When a CEO must share that authority with another entity whose portion of that authority and accountability is ever changing, the stage is set for role confusion and the accompanying loss of dynamic single-mindedness. An old management maxim states, “If two persons are responsible for a job, nobody is.”

Holding a CEO’s feet to the fire to perform is relatively easy for all but the most ineffective of boards. His or her job is on the line. Holding a board com- mittee responsible is considerably harder. It is socially difficult for board members to deal with their peers with the rigor appropriate to the delegator- delegatee relationship. Moreover, even getting good monitoring data on a committee’s performance is harder. Who is to gather the data? The commit- tee? Staff? There are simply many more

sources of slippage when delegating to a committee than to the CEO.

At this point, let me remind you that in Policy Governance, instead of owning a whole function-like discipline, bud- get, or planning-the board “owns” the values underlying all functions. While the board is accountable for how all orga- nizational topics in their entirety turn out, its hands-on responsibility is merely

surprise that, due to confounded delega- tion, the disciplinary process was the least well operated one in the organiza- tion. So how can a board facing this sen- sitive task be sure that it is done well? It should follow the rules of good gover- nance even more fastidiously than ever. Here is the line of reasoning I have rec- ommended to quite a few organizations:

(1) to determine what the higher con- cerns of various endeavors shall be, that is, what values or criteria must be State the way you want

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adhered to by delegatees, then (2) to

these criteria have been met. In other words, accountability for the countless

gather monitoring data to assure that situations of alleged misconduct to come

functions the board can never personally touch is achieved through (1) stating expectations, (2) assigning their achieve- ment to someone, and (3) checking to see if expectations were met. To be accountable for something in no way means the board must do it itself.

In the case under discussion, the board felt that membership discipline, being a board accountability, should also be hands-on, and it conveyed that way of seeing the job to the committee. Consequently, the committee felt it had dominion over all aspects of discipline, including those carried out by staff. Worse, individual committee members would intrude into what the staff was perfectly able to do without help. The effect of such intrusion, quite the reverse of what is intended, is that such “help” makes it harder for staff to get the job done (like when your child “helps” you clean the kitchen).

out rather than how that will be achieved.

Go to the basics of the result you want. Stop thinking of the disciplinary process and think instead of the disciplinary results you want. In most cases, the result is that “members accused of mis- conduct receive strict but fair judgment by peers.” In other words, state the way you want situations of alleged miscon- duct to come out rather than how that will be achieved.

Describe what you want in ends policy. Notice, of course, that the foregoing statement is an ends policy. It fits within the framework of ends decisions the board is making about any number of issues. An alternative ends policy might be that “the public is served by an ethical, competent profession, with any grievances against it settled fairly and in a timely way.” This policy is formulated in terms of the public, not The committee felt it had the professional. dominion over all aspects Expand your ends policy as needed. Obviously, like all words, the words of this policy are open to interpretation. Let’s say that the board is not willing to let the CEO interpret the meaning of “fair judgment by peers.” In this case, the board could go further to say that fair judgment means “judgment rendered by a panel of persons aware of the nuances of the case and exposed to all relevant

of discipline, including those carried out by staff,

A self-destructive tendency in non- profit and governmental governance seems to ensure that the more important an issue is, the more we seem deter- mined to do it poorly. It should be no

4 B O A R D L E A D E R S H I P

sides of the issue,” and that peers means “at least five persons, the majority of whom are professionals in the subspe- cialty involved in the dispute.”

Prohibit any unacceptable situations or actions. For example, it may be unac- ceptable if parties to a conflict are kept in the dark as to progress of the process, or if peer judgment is contaminated by staff lobbying, or if complainants receive no response within sixty days, or if charged members are even subtly treated as guilty prior to adjudication. Any new prohibi- tions would be added to an existing exec- utive limitations policy if possible; if not, a new policy could be created.

The CEO is accountable for ensuring the integrity and timeliness of the process which leads to the judgment.

Allow the CEO to get to work (get out of the way!). The CEO will then set out to create the conditions necessary for achieving the ends and avoiding unac- ceptable means. Because the board will have required the outcome to be “fair judgment by peers,” or an expanded definition of this, it behooves the CEO to create a process by which association members are tapped for service on a dis- ciplinary panel from time to time. Peers who demonstrate that they cannot be counted on to be prepared, to show up on time, or to complete necessary paper- work will be dropped off the list. The CEO couldn’t do that with a board committee and the board itself is unlikely to do it to colleagues. The CEO will make sure such a process is in place and operating, for his or her performance is at stake.

Expect and monitor CEO success. Notice that the CEO is successful only if the board gets what it wanted in the first place, that is, judgment rendered by properly prepared but impartial peers.

The CEO is not the source of the judg- ment itself but is accountable for ensur- ing the integrity and timeliness of the process which leads to the judgment.

Thus the board gets what it wants with no board members involved at all. In fact, the board gets what it wants bet- ter than if board members were involved. Moreover, the board is likely to have described what it wants with far greater clarity than boards usually do when they are delegating to themselves. In theory, board members could be among the panelists selected for discipline panel duty, but it would have to be clear to all concerned that the board member pan- elist is not “more equal” than the other panel members. The staffwould have to be certain of this in order to carry out their responsibilities firmly. However, while in theory board member involve- ment is acceptable, pragmatically speak- ing, it is better avoided.

Now let’s look at a real estate board example. Real estate boards, even ones with large staffs, often have a board com- mittee to oversee the format, prepara- tion, and distribution of comprehensive listings of property for sale. This board committee becomes a de facto mini- board over the applicable staff functions, often interfering in staffwork and frac- turing the board.

Under Policy Governance, the board would clearly describe the data it wants real estate agents to have. In fact, it might even stipulate that the desired ends should incorporate user judgment, thus: “complete, timely, and accurate listings of property for sale, easily useful to agents, for a cost not materially greater than other similar organizations in the region.” As in all ends policy develop- ment, the board might choose to define what is meant by “complete, timely, use- ful,” and each of the other terms, rather than leaving them open to interpretation by the CEO. For example, “useful” might be defined as “found easy to interpret and convenient to carry by at least 75 percent of the agents.” The CEO is then held accountable for carrying out the charge and will thus be driven to periodically assemble a representative group of real estate agents (not board members) to cri-

tique the listing book and advise about it. So ifa corntnittee is created, it is the CEO’s committee, not the board’s.

Intuitively, most of us think we can more reliably get a job done if we do it ourselves than ifwe trust someone else to do it. We delegate as a necessary evil- a second-best alternative to doing things the way we’d really like. To the contrary, however, many (perhaps most) things are done better through delegation than through self-action. That is, delegation is not the alternate route, but the preferred one. Much of Policy Governance deals with the issue of delegation as it is encountered by a governing board.

My examples in this article have drawn on experience with real estate boards and pi-ofessional societies in the United States, as well as law societies and regulatory colleges in Canada. But there are many other types of organiza- tions that exercise some degree of disci- pline over members either because law has given them that authority or because members have voluntarily submitted to it. I n any event, even in this sensitive domain, board leadership is not a func- tion of doing more, but of demanding more and delegating effectively. 0

TRAINING OPPORTUNITIES

SpringlSummer 1997

New Board Member Orientation/ Introductory Workshop. A two-day seminar for board members, CEOs, and others. Held in Atlanta on dates to be arranged.

Consultant Training. A five-day intense course in Policy Governance theory and implementation for con- sultants and other leaders. Held in Atlanta, March 17-21.

For information, contact Ivan Benson: phone (404) 728-9444, fax (404) 728-0060, or e-mail polgov@aol.com

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