A guest post from Rebekah Burch Basinger
"Noses in, fingers out." I've come to despise this time-tattered bit of advice to boards. The smug certainty with which the four-word adage is usually delivered sets my teeth on edge. And I'm heart-sick over the damage done to organizational governance when board members take as gospel the truncated job description.
I get the sentiment behind the old chestnut. Meddling in operations is bad form for boards. But I object to the notion of a clear, impenetrable line between the board's work and administration -- that governance is governance, management is management, and never the twain should mingle.
There may have been a time when so tight a demarcation made sense. However, the "now" of board work is marked by ambiguity, nuance, and fluidity of roles and responsibilities. As a result (praise be), a different understanding of the board's place and potential is taking hold.
I expect it will be years before mention of "noses in, fingers out" disappears from the governance lexicon. Old concepts die hard and change comes slowly in nonprofit circles. But thanks to the work of governance theorists such as Ram Charan, Richard Chait, William Ryan, and Barbara Taylor, boards are coming to be recognized as contributors to, not merely monitors of, organizational effectiveness.
Perception of boards is shifting from that of mere add-ons to value-adding, with real and necessary work of their own. Or back to the adage with which I began, exemplary board work relies on hands and noses.
DUSTING FOR GOVERNANCE PRINTS
These days, boards are expected to lead, to make a difference, to deliver. And that almost always requires board members to dig deeper into issues than the "noses in, fingers out" crowd has deemed advisable. At the least, the board's fingerprints should be all over the following four areas of organizational functioning:
CEO selection, nurture, evaluation, and succession. "Job one" of a board is to select the right CEO for the organization. "Job two" is to nurture the chosen one toward his or her full potential, including with thoughtful annual evaluations. "Job three" is to plan for how the organization will find its next leader. Once in a while, the board’s job includes letting a CEO go. As Ram Charan reminds, “Repeated missteps in this area are huge value destroyers.”
Mission protection. It's a close call whether the board’s care of organizational mission comes before or after CEO selection. The two are intertwined -- one of those "chicken/egg" situations. So don't assume that because I've listed mission protection second, I consider it to be of lesser importance. Board members must be hypervigilant in safeguarding the mission, lest the organization drift from the grand purpose and guiding values upon which it was founded.
Direction setting. Except in the smallest organizations where board members fill staff functions, boards don't develop strategy or write plans for the organization in isolation from the CEO. But, as Chait, Holland, and Taylor explain, boards "help executives see things better, improving their perception and perspective so that they are in a better position to invent new goals, discard old goals, to better see problems." This level of engagement demands more than nosing over the CEO's shoulder.
Attention to organizational health, performance, and risk. Finally we get back to the monitoring role, but much more proactively, hands-on, and future-oriented than most boards manage. Quoting again from Ram Charan, "The board must be forward-looking and anticipatory in making sure the [organization] stays financially viable at all time. . . . Helping management identify risks and develop contingency plans if conditions don't go as expected is a tremendous contribution a board can make."
To be sure, there’s more to the board's role than these four functions, but get these right and you’re off to a great start. And don’t get hung up on the noses and fingers thing. There's a place for both in exemplary board governance.
Boards that Deliver: Advancing Corporate Governance from Compliance to Competitive Advantage by Ram Charan
Governance as Leadership: Reframing Nonprofit Boards by Richard Chait, William Ryan, and Barbara Taylor
Reprinted from Rebekah Burch Basinger's excellent blog on stewardship, fundraising, and governance, Generous Matters. Read the original post here.
Photograph credit: Jessica Spengler