This client engagement involved a Board of Trustees for the Board of Social Ministry, the largest non-profit provider of nursing homes and independent living for seniors in Minnesota. They and their new Executive Director, Kathryn Roberts, were interested in dramatically improving the outcome orientation of their Board and its governance effectiveness.
We relied heavily on the book, Boards that Make a Difference, by John Carver. Carver states that for non-profit and public organizations without a direct bottom line, Boards must determine whether the organization contributes maximal value compared to their expense. "The problem is," he writes, "that intelligent caring individuals regularly exhibit procedures of governance that are deeply flawed." I love how he puts that. Like you, I am very aware of well intentioned, but flawed, operating Boards that sap incredible amounts of energy from an organization. Energy that could be better used serving customers or transforming the organization!
Carver says boards regularly exhibit six flaws. I'm going to highlight four. See if they ring true as flaws you recognize
Spending time on the trivial
Exhibiting a short-term bias
Those three "re" words - reviewing, rehashing, and redoing
Leaky accountability
Here's how our client has addressed each of the four.
Focusing on the Non-Trivial
Peter used this word for an expectation of Boards to attend to the strategic non-trivial - mission integrity.
Integrity means that our client Board must act as a truing device - helping the entity stay on course and true to its purpose. To do so, the Board must clearly define results, purpose, and direction. Interestingly, as part of our entry interviews with them, they each stated they were VERY clear about the mission of the organization. However, several of the 11 held different, clear ideas about the organization's purpose. Thus, we spent significant time with the Board crafting a statement of purpose that all understood and signed up for. It is - we create 'home' for older adults wherever they choose to live.
They have agreed that agenda items not essential to this purpose can be called into question as being "too trivial" for Board deliberation.
Looking long, or in our words, assuring futurity.
Futurity clarifies another Board expectation - to assure the sustainability of the organization. Any organization - public, private, or non-profit - must know whether it is accruing enough resources or returning enough profit to assure that it will be around to carry out its mission. Futurity also includes non-economic aspects, such as Board member and chief executive officer recruitment and development. Not least, governing boards must determine whether current decisions and actions are taking them toward the long-term direction they set, and at what rate.
In this case, we helped the Board of Trustees build a dashboard of seven indicators they will use to assess progress. Clarifying their purpose clarified their choices. They chose seven 'gauges' - three gauges directly measure customer benefit (integrity) and four measure business results (futurity). Customer results include: mission reach (numbers of customers who come to them) and customer ratings on degree of choice available and 'sense of home' experienced within their choice. Business results gauge profitability, innovativeness, business mix, and employee engagement. For each result area, we helped the Board set one and five year expectations. Organizational leaders must now put plans in place to accomplish them.
Working, not re-working (reviewing, rehashing, and redoing)
When we served as superintendent of the Minneapolis Public Schools, we helped prepare for, and attended, 67 school board meetings in a year's time. A magic number for board meetings we don't have, but we know 67 it is not! Sometimes we even had to think up agenda items! Often members wanted to review the same item over and over again.
Carver lists 3 things that should be front and center on a Board's agenda - things that comprise the Board's real work.
The Ends. Who are we? Where are we going? Consistent with mission integrity, the goal of this agenda item is clarity and focus.
Limits of Authority. To free up creativity and innovation, the outer edges of delegated authority need to be defined. What authority does the executive have? Name areas such as hiring, firing, spending the budget, incurring debt. Then take each in turn. Assume the broadest authority and "work down" in order to draw the boundary.
For example: "Does the chief executive have the authority to hire and fire?" Yes.
"Are there situations where she doesn't?" Yes.
"What are they?" No cronyism or salary offers over $100,000.
These conversations are most important to have when a problem about it is NOT on the agenda!
Board - Executive Relations. The single most important work for a governing board is the selection of the Chief Executive. It starts with clearly stating expectations during hiring, but doesn't end there. Performance feedback and review needs to occur - not once a year, but throughout the year.
Ideally, we'd like to see a significant part of every Board agenda set aside for discussion of Ends, Authorities, and feedback on the Board - Executive Relationship.
Plugging leaky accountability
While Board members know they are expected to operate as stewards on behalf of others, as a non-elected board, direct accountability to outside customers and /or citizens does not exist.
Given that, our client has decided to establish internal accountability methods to assure it is well functioning. At a minimum, it will:
Ask for feedback on performance. Collectively, and for each individual, our client plans to gather and give each other direct feedback on how to improve contributions. They wish to clarify mutual expectations around items such as fund development, business or entrepreneurial acumen, or boardroom-to-boardroom outreach. To us, there is no substitute for this kind of meaningful feedback against expectations. We have said there is not 'right answer' for each of these, but the wrong answer is ambiguity.
Plan for board chair succession. The chair and the executive must work well together. The relationship must have an ease about it yet encourage supportive and challenging mutual conversation. Other board members need to be interested in how that relationship is going. Because the chair of any board has a special burden, special preparation of the next chair must occur. They'd like to see the next chair known and 'in training' for a period before assuming the full chair role.
In the future, our client may examine methods of direct accountability to customers or external 'investors'. Once they have some more information on the results they are producing, they will be in great position to do so!
I am very proud of the work that this Board has done to improve its governance. I also thought it relevant to others. When this work began, one of the Trustees stated her desire to go on a journey of purpose, and asked the group the question, "What on earth are we here for?" As a result of our work together, this Board is answering that question.
Has yours?
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