patrick f. bassett, nais president [email protected] governance 201: exceptional boards the source:...

Patrick F. Bassett, NAIS [email protected]

Governance 201: Exceptional BoardsThe Source: 12 Principles of Governance that Power Exceptional Boards

Reprinted with permission from The Source: Twelve Principles of Governance that Power Exceptional Boards, a publication of BoardSource, formerly the National Center for Nonprofit Boards. For more information about BoardSource, call 800-883-6262 or visit www.boardsource.org. BoardSource © 2004. Text may not be reproduced without written permission from BoardSource.

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SIX PHASES OF A PROJECT by the Board

1. ENTHUSIASM

2. DISILLUSIONMENT

3. PANIC

4. SEARCH FOR THE GUILTY

5. PUNISHMENT OF THE INNOCENT

6. PRAISE AND HONORS FOR THE NON PARTICIPANTS.

"A school is a relatively small institution with a complexity out of all proportion to its size." Damon Bradley, former school head

Board Conundrums

What Are the Three Top Governance Challenges in Schools (Source: Nine contributors to the Trustee Handbook, International Edition)

1. ROLE CONFUSION LEADS TO “MICRO-MANAGEMENT” (a definitional problem)

2. HIGH TRUSTEE TURNOVER IMPEDES BOTH BOARDS AND HEADS (a structural process problem)

3. POOR UNDERSTANDING AND POOR SKILLS REDUCE EFFECTIVENESS (an education problem)

What Business Execs Don’t Know-But Should-About NonprofitsBy Les Silverman & Lynn Taliento, Stanford Social Innovation Review, Summer 2006

CEOs and other business leaders on non-profit boards too often… can’t identify with the 5 top challenges:

1. The non-profit leader wields less authority and control than his or her for-profit counterparts (Jim Collins’ legislative vs. executive leadership).

2. Yet the non-profit leader must answer to a wider range of stakeholders.

3. The enterprise lacks straightforward performance measures – there are no analogs to profit in social change.

4. Yet the non-profit is under greater scrutiny from politicians and the press (and in the case of schools, the customers).

5. Compared to the corporate world, the nonprofit sector is under-funded, under-staffed, under-resourced, and under-trained.

What’s the Antidote to the Malaise?

Board Development and Self-Improvement

1. Exceptional Boards ~ The Source: 12 Principles of Governance that Power Exceptional Boards (BoardSource.org)

2. The NAIS Trustee Handbook (www.nais.org): 9th Edition (US) or International Edition (abroad)

http://www.nais.org/

1. Constructive PartnershipExceptional boards govern in constructive partnership with the head, recognizing that the effectiveness of the board and head are interdependent

Responsible Boards x Source of Power = Exceptional Boards

Delegate operations to the head

Trust, candor, and respect

Face and resolve problems easily

Evaluate head annually Sharing good and bad news

Attract more qualified head

Ensure fair, competitive compensation

Communication in and between meetings

Retain talented head longer

Develop a job description with and for the head

Open and honest head Change executive leadership at the right time

PFB: Constantly clarify boundaries.

Insightful tools and information

PFB: Have a succession plan in place for school head

Typical Dilemma: Once a issue or crisis identified, the board wants quick decisions. Fails to co-define and prioritize the head’s role.

2. Mission DrivenExceptional boards shape and uphold the mission, articulate a compelling vision, and ensure the congruence between decisions and core values.


Articulate clear statement of mission

Use of mission, vision, and values in decision making

Sharply address community needs

Uphold organizational values

Congruence between mission, vision, values, and day-to-day work

Inspire staff to reframe strategies and elevate goals

PFB: Know that great schools are “built to last.” (J&J; Disney; GE)

Willingness to refocus mission

Improve advocacy, fundraising, and marketing

PFB: Create “pithy,” “sticky” mission statement/value promise.

Maximize the value of grants and contributions

PFB: mission map; mission/resource alignmentTypical Dilemma: Tendency to waffle on values and agreed-upon roles when the

heat is on, especially as the school attorney counsels withholding info or parents begin making “the complaint call.” (Cf. NAIS’s Debra Wilson & Jane Hulbert)

3. Strategic ThinkingExceptional boards allocate time to what matters most and continuously engage in strategic thinking to hone the organization’s direction.


Set direction Considerable time spent on consequential issues

Become a strategic asset and a source of leadership

Establish and review strategic plans

Constant strategic thinking

Sharpen direction, address difficult issues, identify opportunities

Monitor performance against plans

Joint board-staff efforts to frame and explore issues

Generate solutions that are understood and supported

PFB: “Strategic planning is an oxymoron.” ~Henry Mintzberg

Alignment of agendas and head’s goals with priorities

Typical Dilemma: Derailed from the strategic conversation to the mundane.

4. Culture of InquiryExceptional boards institutionalize a culture of inquiry, mutual respect, and constructive debate that leads to sound and shared decision-making


Have members who work well with each other

Mutual respect and trust

Engage and energize their members

Receive and review materials in advance

Actively-managed group dynamics

Expose full range of opinions

Convene well-organized meetings

Openness to questions, challenges, and differences of opinion

Make better decisions

Focus meetings on fiduciary duties (but only part of the time)

Multiple sources of information

Own and support their decisions (PFB: the “loyal opposition”)

PFB: Build board as a team. Recruit to balance the team.

Typical Dilemma: Board a “huddle of quarterbacks” instead of a team. Not all the voices heard so individuals trump “the crowd.” Meet too often.

5. Independent MindednessExceptional boards are independent-minded. When making decisions board members put the interests of the organization above all else.


Adopt conflict-of-interest policies

Unqualified loyalty Make decisions in the best interest of organization

Disclose and do not vote on matters of personal interest

Independent thinking drawn from multiple sources

Minimize risk of poor decisions and negative publicity

Decision making free of undue influence

PFB: Balance current parents with non-parents. Faculty on committees, not board.

Rigorous conflict-of-interest procedures

Typical Dilemma: Board members ignore or neglect policy and identify with self-interest of their own tribe

6. Ethos of TransparencyExceptional boards promote an ethos of transparency by ensuring that donors, stakeholders, and the interested members of the public have access to information regarding finances, operations, and results.


Comply with government filing requirements

Active exchange between board and staff

Alongside staff, feel connected to the organization

Report annually on accomplishments and use of funds

Openness with donors and the public

Cultivate relationships with donors and stakeholders

PFB: Make board business transparent, on the website as counter to “attack” websites.

Whistle-blower policies to protect staff (but NOT a board Grievance Committee)

Earn public trust and support

Typical Dilemma: Lack of “sunshine” on board operations, goals, and priorities; or the opposite, wandering into staff evaluations. (Walk in the woods case study.)

7. Compliance with IntegrityExceptional boards promote strong ethical values and disciplined compliance by establishing appropriate mechanisms for oversight.


Ensure compliance with the law. Revise bylaws. Due diligence on risk.

Financially attentive and astute board members

Judiciously allocate and oversee resources

Approve budget and review financial reports

Vigorous oversight Deeply understand their organizations

Obtain independent review or audit of financial statements

Proactive risk management

Minimize risk

Ensure appropriate insurance

Auditors and compensation consultants report to board

Display highest standards of ethical conduct

PFB: Articulate the “core values” of board.

Typical Dilemma: Unaccustomed to scrutinizing sensitive matters, like exec comp or allegations of misconduct (Penn State Case Study)

(Penn State case study): Dick Chait rule of thumb: avoid tendency of over-involvement in operational matters and under-involvement in reputational matters. Areas of high institutional exposure (athletics, safety, risk), err on the side of over-involvement.

8. Sustaining ResourcesExceptional boards link bold visions and ambitious plans to financial support, expertise, and networks of influence.


Approve balanced budget

Creative and diverse revenue sources

Generate increased revenue

Accept fundraising responsibilities and contribute personally

Enthusiasm for bold visions and ambitious plans

Extend programmatic capacity of organization

Develop and monitor investments

Active involvement in solicitations

Improve organization’s standing in the community

Promote the organization in community

Intellectual, social, political, and reputation capital

PFB: Establish up front giving expectations of board members.

Typical Dilemma: Terminal politeness & timidity throttle assertiveness & risk-taking. Some equivocation at times on fund-raising expectations for board.

9. Results OrientedExceptional boards are results-oriented, measuring the organization’s advancement towards mission and evaluate the performance of major programs & services.


Monitor financial performance

Incisive program evaluation

Maximize resource utilization without micromanaging

Receive programmatic updates

Meaningful performance metrics

Focus on outcomes, not inputs

Early issue identification

Drive programmatic activities to excellence

PFB: Establish “dashboard indicators” or “markers of success”

Benchmarking against peers

Typical Dilemma: Haven’t agreed upon markers of success for a school.

10. Intentional Board PracticesExceptional boards intentionally structure themselves to fulfill essential governance duties and to support organizational priorities.


Design board size, structures, and meetings to accomplish work of the board

Intentional and strategic approach to board operations

Engage in action-oriented, results-driven work

Document practices, policies, and decisions

Flexibility in response to changing environment

Use board member time wisely

Member assignments aligned with priorities

Reap full benefits of members’ talents

PFB: Create alternating fiduciary, strategic, and generative meeting pattern.

Executive sessions Connect to the work of the organization

Typical Dilemma: Too many routine meetings, not enough strategic and generative ones.

11. Continuous LearningExceptional boards embrace the qualities of a continuous learning organization, evaluating their own performance and assessing the value they add to the organization.


Orient new board members

Learning activities built into board work

Are well-informed about the external environment

Use board members’ skills

Knowledge drawn from outside the boardroom

Grow on the job, and contribute at increasing levels

PFB: Use new online NAIS Board Assessment survey.

Board evaluation of individual and collective performance

Regularly upgrade their governance practices

Typical Dilemma: Board evaluations are avoided or effete, mutual-admiration exercises.

12. RevitalizationExceptional boards energize themselves through planned turnover, thoughtful recruitment, and inclusiveness.


Recruit based on individual competencies and personal connections

Clarity around expectations of board members

Know their roles and function well as a group

Establish a committee to manage the recruitment process

Diversity of perspectives

Include important voices at the board table

Continuous recruitment Have a ready supply of new board members

PFB: Adopt a profiling process to match candidates with needs

Thoughtful use of term renewals and officer succession planning

Experience smooth leadership

Typical Dilemma: Haphazard recruitment and tryout system for board and leadership. A crisis makes the board revert to primitive behavior.

The End!(See Related Slides in Appendix)

The Most Generative Question for Schools:“How Shall We Define “Greatness” in a School?”

De-motivating Concepts(Dick Chait at LtP, 2004)

Paths to ruin for heads: alcohol the most painful; sexual indiscretion the most dangerous; strategic planning the most certain.

Return

Appendix of Related Slides

Myers-Briggs Z+2 Model I/E (introvert/extrovert); S/N (sensing/intuition); T/F (thinking/feeling); J/P (judging/perceiving)Adapted from The Zig-Zag ™ Process for Problem Solving, developed by Gordon D. Lawrence, Center for Applications of Psychological Type, Inc., 2004.

How do you make decisions?

How do you process info?S (Sensing): What problem are we trying to solve?What are the facts, details, frequency?

N (iNtuition): What are the patterns and theories for why this might be happening? How do we brainstorm solutions?

T (Thinking): What are the criteria by which we should make this decision? What is the logical way to address the problem? The ethical dimensions?

F (Feeling): What is the impact on people? How can we deliver this info in the best way to get results?

When in doubt, apply the Institute for Global Ethics 4-way test: gut test; legal test; front page of newspaper test; role model test

ReturnCf. Daniel Kahneman’s Thinking Fast, and Slow

What System Do We Employ To Make Effective Decisions?

For routine conundrums and issues:

1. Investigate and gather the facts. One person’s impassioned “report” does not necessarily constitute an emergency or crisis, especially if the “facts” are distorted by that person’s emotions or biases. Before taking any action, gather the data. Determine if any of the NAIS “Principles of Good Practice” come into play: i.e., are there ethical issues at stake? Are we possibly compromising any principles?

2. Pay attention to the instinctive “blink” reactions, since many others will have those same reactions. Assemble the administrative team to relay the facts and seek the “wisdom of the crowd.”

NAIS Case Study/Crisis Protocols

For routine conundrums and issues:

3. Rationally determine the options you have. Recognize that conundrums often present what the Institute for Global Ethics (www.globalethics.org) calls “right vs. right” decisions that are resolved only by having and articulating the ethical principles on which you make judgments (e.g., “universal principles,” vs. “greatest good” vs. “caring” ethic). Apply the IGE “four-way test”: gut test; legal test; front-page test; role model test.

4. Consider the “downstream” impact of the possible decision, and how it will read and play out in the community. Test the water, if possible, with some key constituents.

NAIS Case Study/Crisis Protocols

Benchmarking and Setting Goals as “Markers of Success”: What percentile are you? Where do you want to be Return

Developing the Board & Admin Team(Board Member, May 2004, Chait et al.)

The SAT Analogy:

Our board is to our school

as is to .

Analogies revealing some level of dysfunction:

“Our board is to our school as…

•Loose steering wheel is to auto •Fingernail is to blackboard•Hamster is to wheel

Problem Solving via Strategic Governance

Needed: Three Levels of Trusteeship

Level One: Fiduciary (oversight and assessment of mission & finance)

Level Two: Strategic (“less management/more governance” via scanning and planning)

Level Three: Generative (shared leadership, R&D orientation for imagining and experimenting).

PFB’s 3 lenses: oversight, foresight, and insight

Three Levels of Board Governance(Adapted from Board Member, May 2004, Chait et al.)

Board as Control Mechanism

Board as Direction Setter

Board as Meaning Maker

Dam : River

Curbstone: Road

Border Collie : Herd

Traffic Tower: Pilot

Governor: Engine

Landlord: Tenant

Anchor: Ship

Compass : Navigation

Headlights : Auto

Guidance System : Satellite

Periscope : Submarine

Flight Planner : Pilot

Rudder : Ship

Inspiration : Poet

Values : Choices

Designer : Work of Art

Spirit : Higher Purpose

Lighthouse: Ship

Fiduciary Oversight: “Doing things right”

Strategic Foresight: “Doing the right things”

Generative, Visionary Insight: “Leave a legacy”

“The antidote to micromanagement is macroengagement.” ~Dick Chait Applied to problem-solving: Rising benefit costs? Adding Chinese? Rightsizing?

Return

Five High Impact Trends

1. Shifting School-Age Demographics: Demography is destiny, especially if market share does not increase (although it may with advocacy initiatives).

2. Skyrocketing Tuitions: Affordability issues and pushback. Related to the …

Disappearing Middle Class: Barbell effect.

3. Public School Disarray: Demoralizing impact of NCLB. Dismal track record of educating kids to graduate from college.


4. Graying Work Force: How will we recruit, retrain, and reward faculty talent? Cultivate and train the next leadership generation?

5. The Accountability Clue Train Has Left the Depot

Dubious Results by Schools & Colleges: International testing results poor; lack of basic skills in literacy and numeracy from college grads (Spellings Commission report). Schools not preparing kids for the VUCA-U future. (Tough Choices or Tough Times: Report of the New Commission on The Skills of the American Workforce, 2007: Nation@Risk2)


5. The Accountability Clue Train Has Left the Depot (cont.)

Data Aggregators Forcing Accountability: USN&WR rankings, S&P Financial Reports; Charity Navigator scores and rankings for donors.

Parental Expectations: Rob Evans’s paradox, that parents want “the path for the child,” which is impossible to guarantee much less deliver in a “VUCA- U” reality.

Return

NAIS Governance Study: 2006-07

Importance of School Board Roles

PFB: NOT good—majority sees their role as “representative” Return

NAIS Governance Study – 2006-07Role of School Head Trustees Heads

Instilling climate/values consistent with the school mission Rank 1 Rank 1

Recruiting and hiring quality staff and faculty members Rank 2 Rank 2

Developing and managing effective school policies Rank 3 Rank 6

Long-range and strategic planning Rank 4 Rank 4

Ensuring the school's financial well-being Rank 5 Rank 3

Fund raising Rank 6 Rank 7

Working effectively with trustees Rank 7 Rank 5

Developing and implementing curriculum Rank 8 Rank 10

Establishing positive public relations Rank 9 Rank 8

Managing conflict Rank 10 Rank 9

Counseling personnel Rank 11 Rank 11

Negotiating salaries and benefits Rank 12 Rank 12

Enacting appropriate disciplinary measures Rank 13 Rank 13

Teaching classes Rank 14 Rank 14

What do you think should be the attributes and strengths of the head of school? • Analytical intelligence (IQ)• Emotional intelligence (EQ)• Financial management acumen• Fund-raising experience• Good communication skills (speaking and writing)• Good sense of humor• Marketing and public relations experience• School experience in teaching and leading• Systems knowledge of how schools work While everyone expects a school head to have all the following leadership style attributes, how would you number them, 1 – 4, in order of importance?

• Capacity to make strong and decisive calls, even without complete agreement by all parties (executive skills)• Change-adept leadership (change management skills)• Skill and patience in guiding groups to consensus (diplomacy skills)• Vision to see what the future holds and charisma to attract others to the vision (inspirational skills)

Return

NAIS Governance Study – 2006-07

Frequency of Board Meetings:

Less is More: 2/3rds of boards meet 6 or fewer times per yearReturn


Approved Written Board Policies

Return


Rated Issue as Being One of the Top 5 Issues Facing Their School TrusteesHeadsof Schools

Recruiting, retaining and compensating quality faculty 73% 74%

Renovating/enhancing school facilities 54% 45%

Developing a sound 5-year financial plan 52% 46%

Marketing/branding the school 52% 52%

Expanding parent and alumni giving/support 52% 44%

Creating a 21st Century program and curriculum 44% 45%

Increasing availability of financial aid 44% 41%

Identifying sources of non-tuition revenue 42% 36%

Creating a diverse/inclusive school community 43% 42%

Communicating with internal and external audiences 33% 42%

Managing and expanding use of technology 19% 17%

Improving parent/school relationships 19% 15%

ReturnFor your board, what two or three are on the top of the list?


School Board Performance


School Board Performance (cont.)

School Board Performance, Cont.

Return

NAIS Board Assessment Survey

NAIS Board Assessment Online Survey

Sample Report: Section 2-Planning

Comments…

> A broader discussion is needed around the evolution of the student body and the need for the school to adapt to the changing demographics.

.> Board should ensure unanimity of purpose for the building campaign given the continuing economic problems of the country.

.> We need to develop a vision for the school that moves beyond the physical facilities. The vision should be translated into areas of board focus that should be assigned to committees (reorganize the board committees) and translated into executable goals for the management team that can be tracked at a high level through appropriate reporting to the board.

> The board does meet annually to set its priorities, which is essential, but I so feel some of the priorities set are rather nebulous, without proper indicators for tracking progress. We should devote some time at a meeting mid-year to see where we are with regard to the priorities set at the beginning of the year.

Return

Executive Compensation

See Summary Report in SOL Page or Create Customized Version via Benchmarking

Return

Return

Bassett’s 25 Indicators of Great Schools1. Create and perpetuate an intentional culture shaped by the adults, rooted in universal values of honesty and caring, and relentlessly oriented toward achievement.

2. Eclectically capitalize on the best ideas about what works in schools, those gleaned from the past as well as those deemed best for the future.

3. Manifest a coherent philosophy of learning for students, be it constructivist, Reggio Emilia, Waldorf, Montessori, strengths-based, progressive, traditional, 1:1, or whatever — so long as it remains open to ongoing discussion, testing, and constant refinement.

4. Make a substantial commitment to professional development for faculty, expecting teachers to grow as learners themselves and to develop mastery in the art and science of teaching.

Bassett’s 25 Indicators of Great Schools

5. Develop collegial means to professionalize the profession, such as rounds, lesson study, digital faculty portfolios, and the like, adopting professional development strategies that are prevalent in high-performing schools and countries around the world.

6. Adopt a big vision, one that continually refreshes itself in order to sustain the enterprise along the five most strategic continua: demographic, environmental, global, financial, and programmatic.

7. Define the school’s “playground” in expansive ways, beyond the school’s borders into the local community, the region, and the world.

8. Demonstrate the public purpose of private education locally, nation- ally, and globally through a variety of means, including modeling experimentation to improve schooling and partnering with the public sector at the school and university levels.

Bassett’s 25 Indicators of Great Schools9. Embrace stewardship of the school and its resources, renewing and growing the school’s physical, financial, and human resources to achieve financial equilibrium.

10. Enable constituents to donate their time and treasure consistently by providing the metrics on school volunteerism, financing, and eleemosynary benchmarks, and by telling the school’s story in powerfully moving ways.

11. Pay it forward by building endowment and thereby sustaining intergenerational equity so that the next generation of families will be at least as well served by this generation as the current generation of families has been by its predecessors.

12. Commit to diversity of all kinds and at all levels to create the conditions and school culture so that students learn how to appreciate and map differences, then navigate and ride the waves of change.

Bassett’s 25 Indicators of Great Schools13. Redefine the ideal classroom setting as one of intimate environment, not small classes, since the former can occur in schools or classes of any size and even online, and the latter can miss the point of intimacy.

14. Create a financially sustainable future by means other than persistently large annual tuition increases, recognizing that being the best value, rather than the highest price in town, offers the strongest value proposition.

15. Achieve extraordinary parent and alumni participation in annual giving, reflecting superb volunteer organization and execution and a grateful constituent base.

16. Adopt and fund “3 Rs” talent strategies that position the school to recruit, retain, and reward the best and brightest teachers, school leaders, and board members.

Bassett’s 25 Indicators of Great Schools17. Compensate staff members fairly and competitively related to performance and contributions to the well-being of the school and in acknowledgment of the staff’s tremendous responsibility for and impact on students.

18. Provide leadership paths for teachers wishing to stay in teaching, rather than jump to administration, by creating a host of academic and task- force leadership roles.

19. Track student outcomes over time, beyond the years in one’s own school, seeking data on how well the school prepared its students for the next legs of their life journeys — be it the next levels of education or life beyond.

20. Seek data to make data-rich (not opinion-rich) decisions, embracing former Education Secretary Margaret Spellings’s observation, “In God we trust; all others, bring data.”


21. To avoid unnecessary distractions, educate the board and parents thoroughly about “how schools work,” and about what student and parent needs a school can and cannot meet.

22. Market their schools with “sticky messages” that tell a compelling story.

23. Know their priorities when making difficult decisions, ranking first “what’s best for the school,” then “what’s best for the student,” then “what’s best for all other interests.”

24. Know that one’s mission-match with a prospective student (on the intake) and matriculating students (on the outtake) is the controlling factor in admissions and secondary school or college placement.


25. Find the right balance for the drivers of financial aid to achieve school goals of diversifying the school, managing enrollment, and attracting a talented class of students.

All schools have the capacity to become great schools. All they need is the focus and leadership to create the proper conditions for the board, school leadership team, staff, and constituents to do so.

patrick f. bassett, nais president [email protected] governance 201: exceptional boards the source:...

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