Governance, does it have to be boring?
GOVERNANCE IS SO BORING. Urgh! Why would anybody choose to sit in a stuffy room for hours on end scrutinizing every penny spent on postage? Spend time examining every facet of the staff’s travel expenditure? No thanks! And why on earth would I want to talk about conference sandwiches? Yes, people have dietary requirements, we don’t need to discuss at Board level, do we?
Well, as I’m sure is the case for many of us, I have sat in Board meetings where these and other routine operational details have been standing agenda items! As a Chief Executive I would sometimes sit in awe and wonder as to how these busy professionals (all of whom worked at a senior level in their own organisations) had time to focus on these items. Whenever we (inevitably) slipped into these humdrum discussions, I’d wipe away my silent tears and reflect on why my directors were remotely interested in these and other detailed operational issues? These were matters for which I was ostensibly responsible as head of operations, but which even I had little understanding (or dare I say, concern) because I delegated operational responsibility to staff whose knowledge and expertise in these areas was far superior to my own and had in place the correct operational decision-making and reporting protocol.
No wonder some people think governance is dull and it’s hardly surprising that we have such headaches recruiting new talent to our Boards when there’s a perception (and for many a reality) that being a director of a membership body is a major operational burden.
It was only once I started working independently with Boards across the association sector that I realised mine were common headaches and that many Chief Executives and their Boards were grappling with exactly the same tensions between strategic focus, operational oversight and governance priorities.
Having worked with many boards over the years, I’ve realised the one major problem for people who serve as directors is understanding the term ‘governance’, and without adequate induction and an appreciation of the various governance codes (Policy Governance, Governance as Leadership, UK Corporate Governance Code, NETpositive Governance, BS13500, Charity Governance Code, Wates Principles, etc), the challenge is to ensure boards govern rather than manage their organisations. Most boards find it easier to undertake fiduciary responsibilities rather than their strategic or generative roles, and whilst ensuring legal and regulatory compliance is critical, boards that spend all of their time focusing on compliance and not also on strategic development, are not performing adequately.
Research shows however, that adopting and adhering to a clear basis for how a board operates (a model of governance) can lead to improved governance practice. There are many different models available and it is important that a board adopts a model that enhances the values and performance of the organisation by using one of these established codes, or by choosing some principles from each and implementing a bespoke approach. This not only promotes effective governance, but also ensures less confusion between the role of the board and that of its executive.
Crucially, understanding and adhering to its governance model offers a board not only clarity around its legal responsibilities, but acknowledges its pivotal function in leading the organisation’s development by permitting the board time to be reflective and space to be innovative.
But how do we identify and agree a board’s governance model? Well, we need to provide the board with training. Not just in terms of governance models but more broadly on the principles of governance mechanics (policy, process and practice) and dynamics (relationships, behaviours and competencies). We need to invest in our directors’ professional development in much the same way that we invest in our staff. Governance is a complex ecosystem of relationships, structures, processes, strategies, behaviours and accountabilities. As frustrating as it can be to work with what we perceive as ill-informed directors, it hardly seems fair that we complain when we often fail to properly invest in our boards’ development. We expect our staff to be competent, capable and confident in their roles for the benefit of the organisation and its members. Why then would we not expect the same of our boards?
Many associations are fully aware of the issue and have grasped the opportunity to develop their boards and utilise their knowledge, expertise and contributions to maximum effect: The British Dietetics Association (Future Leaders Programme), the British Pest Control Association (Board Competency Framework) and the Association of Chief Executives of Voluntary Organisations (Digi-Board) are just three examples of effective internal investment programmes; and I’ve no doubt that chief executives Andy Burman (BDA), Ian Andrew (BPCA) and Vicky Browning (ACEVO) would be happy to share their insights into developing, implementing and evaluating their board development programmes.
I know however that before creating these innovative approaches to board development, each of these organisations undertook a thorough review of their governance structures, examining impact and effectiveness, conducting a SWOT analysis, reviewing board dynamics, exploring what worked well and identifying what needed improving. Without understanding internal challenges and opportunities it would be impossible to create a meaningful development programme for their boards. A governance review can take time and investment: they are deep dives into the machinations of an association’s inner workings; and whilst not everybody likes having a mirror held up to them, they are absolutely worth it because not only are our directors individuals who are legally accountable for an association’s performance and compliance, they are critical (or they should be) in articulating the strategic vision and participating in generative governance.
Whilst most boards are financially literate and actively engaged in the core business of the association, too often board meetings are structured as venues for staff to deliver and the board to receive information about events that were past, money that was spent (or generated), and the status of a strategic plan. In other words, boards’ orientation can be backward looking rather than forward thinking, reactive rather than proactive. Whilst covering these types of items are necessary board activities, the Governance as Leadership model describes them as type one (fiduciary) and type two (strategic) governance. In type-three governance (generative) the board engages in deeper inquiry, exploring root causes, values, options, and new ideas for the long-term prosperity of the association. This is where the unique value of the board is found: Generative thinking occurs upstream from strategy and much farther upstream from operational planning and execution. Generative board leaders seek constantly to gain insight into and influence on association identity and purpose. Generative thinking provides directors with the opportunity to lead as well as govern.
Now that is why, to me, governance is not boring. Indeed, to my mind it makes governance an immeasurable opportunity to have genuine, long-lasting impact and to add real value to the success of an association, its members and its wider communities. Why would you not want to be involved in this heady mix of strategy, creativity, inquisitive enquiry, stimulating debate, constructive conflict and thought leadership? I’m pretty sure I’m the only person I know who would describe governance as “intoxicating” (I actually have a favourite governance model!) but at this level, it absolutely is!
So, what type of governing body do you want to have? What type of director do you want to be? What value and impact do you want to realise? If it’s rolling your sleeves up and managing events, budgets or membership services, then go for it! Just recognise that you probably work within the parameters of either the Cooperative or Management Board models and understand all that that entails. If generative governance excites you, then focus on understanding and implementing the Governance as Leadership model; and if your focus is on realising social value and societal impact through good governance, then seek to fully appreciate the NETpositive Governance model.
Irrespective of your preferred model, I always advocate a routine governance review, I always recommend investment in directors’ professional development, and I always suggest defining a governance model that enhances the performance and value of the association. These three actions not only promote effective governance but also ensure less confusion between the role of the board and that of its executive. Crucially, creating and embedding a cohesive and constructive governance culture offers a board not only clarity around its legal responsibilities but acknowledges its pivotal function in leading the association’s development by permitting the board time to be reflective and space to be innovative.
Governance and innovation are not mutually exclusive. Effective governance is innovative, which is a central theme of the 2nd annual Cambridge Governance Symposium (March 4th at Emmanuel College), where we have challenged speakers to reflect on their experiences of modern organisation governance and to share their pioneering views of progressive governance models. To register your attendance visit https://governance-symposium.eventbrite.co.uk.
Andrew Chamberlain, Managing Director, Consort Strategy
If your association would like advice from Andrew on identifying, understanding or reviewing your governance model, then please contact the Institute of Association Leadership to arrange your free governance health check.