When the members of the board are outstanding managers

This discussion is about the situation that can arise when members who are recruited to the board of an organization have more skill and experience in management than the CEO. [Note: the board is using Policy Governance ®.]

If the nominating committee is doing its job, it is recruiting the best candidates it can find to serve on the board. If the organization has a high profile and is doing worthy work, the committee is often able to attract some of the community’s highest achievers.

Some of these people may be drawn from the most senior management of huge corporations. Certainly in the corporate sector, the prime candidates for service on a board are often considered to be the CEOs of other companies. If these board-recruits are also prepared to be fiduciaries for the ownership, the nominating committee will be very pleased with its job of recruiting.

But what will life be like for the CEO of this relatively small non-profit who now reports to a board that includes these managerial giants?

If the nominating committee, or the board’s internal process, ensures that the new members are not just welcomed to the assembly but also well-trained in Policy Governance, then there may be no problem. The new board members know their role, and there is a clear division of responsibilities.

The truth is that this can be difficult, even with training. The managers-on-the-board are likely to see (or think they see) practices in the organization that they find inappropriate, ineffective, or inefficient. Because of their power and influence in the community, when these people articulate their concerns, even the other board members may not be willing to challenge this seemingly authoritative observation.

Isn’t having access to this kind of expertise a bonus for the organization? Sometimes, but often not. The issue is often expressed in terms of what is the best way to accomplish something. In fact, there are usually many ways to accomplish the necessary results. The issue really is: what works best for the person who is accountable for producing the results — the CEO and the staff?

So, here are the dynamics of the situation. When the very-knowledgeable board member makes an observation about how the organization should be managed (were s/he running it), and this person has a compelling influence on the other members of the board, this opinion can attain the authority of a board command — even if it is not a legal motion by the board.

Under these circumstances, unless the CEO can produce a counter argument with even greater authority than the opinion of the august board member (and what CEO would dare to do that?), likely the CEO will feel that s/he must take that advice. Well, isn’t this good advice, and shouldn’t it be followed? Actually, the damage has been done, and the authority of the CEO has been jeopardized. The situation should not have arisen, and if the board is doing its job this line of conversation should be discussed openly, understood, and discontinued.

Why? The great manager on the board is not on the board to provide managerial advice. Since managing is this person’s expertise, managerial advice is the contribution this person would generally like to make. Because of his/her personal power, many boards will allow that conversation to happen. At that point, the board is not acting as an owner-representative, but as a manager. This is not the job of the board.

But what if it is good advice? It may be good advice for someone with the skill of the great manager, but it may not mesh with the specific skills of the current CEO. It may also imply a need for an interpretation of the board’s policies which is different than the one the CEO would choose — and that choice has been delegated by the board to the CEO. When the CEO makes a managerial decision, that decision probably reflects his/her particular strengths. When the board members attempt to influence that decision (by comments and observations but not by policy) they undermine the authority and ability of the CEO to do the job.

The real issue is not what is the best managerial practice, but who is accountable for what? In this case, the board (and its members) is accountable to the ownership for ensuring that the organization achieves what it must and avoids inappropriate behaviours. The board (and its members) is not accountable for managerial practices. The CEO is accountable to the board for realizing the board’s ends; the CEO is not accountable specifically for managerial practices as long as the board’s executive limitations are not violated. These are the roles that each has chosen, and for which each is accountable.

But, what if the advice is good and the CEO would like to hear it? This advice can be provided, but it must be done in a manner that does not jeopardize the CEO’s authority. It must be provided as wisdom from one person to another, and not carry the authority of the board. In this case, the very-knowledgeable board member should offer to meet privately with the CEO (or whomever on the staff could benefit from the expertise).

When private advice or counsel is offered in this way, the person providing the advice is acting as a volunteer and not as a board member. As a volunteer, the advisor is accountable to the person receiving the advice. Therefore, when a board member decides to offer advice, that person must be prepared to set aside all of the authority of the board, and make it clear that the advice is freely given and may truly be refused. If there is even the slightest suggestion that the advice must be followed, it would be better not to offer it. By listening to the advice, the member of the staff must be under no obligation to take it. Since the very-knowledgeable board member is so influential, it must be his/her responsibility to explicitly state that there is no expectation that the advice should be followed — and mean it.

This is a frequent issue with boards beginning to use Policy Governance. People who arrive on the board are often skilled managers, and people feel they perform best when they use their strengths. So, board members often think that they know best how to manage the organization. As a board, they technically have the authority to manage, and managing often feels right, comfortable and safe. These same people are often not expert at governing, and that role feels awkward and difficult. Both the roles of managing and governing are important to the organization. Board members are accountable for governing, and should learn to do that well. If they want to manage, the board is not the place. The only way to be appropriately accountable for managing is to apply for the job of managing.

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