Here's a very succinct look at both corporate and non-profit boards and what aspects are the same and what are different
Don't be put off by the start of this article which is very US based, but head to the last set of questions - there's some very valuable advice with respect to audits
For many Directors, micromanaging is often thought of as inconsequential; a little bit of fine tuning here and an extended discussion there. It has all the hallmarks of a thorough and prudent Board member securing down the fact and details.
Here is the result of a recent LinkedIn survey:
Over the past week I have followed the discussion started by Rebecca Sutherns on the topic “Top 5 Skills for a Board Chair” (thanks Rebecca!). I thought I would take a stab at bringing some clarity to the discussion by summarizing the qualities listed.
After tallying the list of qualities, I separated them into six categories. As a not for profit leader, this is the list to which I aspire:
Personal Character: a passionate charismatic people-person who is honest, ethical and acts with integrity. This person is wise, discreet and diplomatic in dealing with organizational politics.
Business Skills: a strong communicator with attuned listening skills adept at facilitating discussion to achieve consensus among differing points of view. An understanding of basic financial and human relations principles.
Awareness Mindset: Strive toward continuous improvement, able to grasp the strategic direction of the organization and strive to achieve collaborative relationships with internal and external stakeholders. Ability to rationally make tough fact-based decisions absent of personal agenda.
Organizational Management: with a focus on good governance, maintain a positive organizational culture and cultivate professional and positive relationships with the Chief Executive and the Board of Directors. Ensuring a smooth flow of information, make effective use of the Chair’s authority to run effective and efficient meetings. Use personal influence and network to further the aims and objectives of the organization.
Organizational Awareness: knowledge of the strategic direction of the organization, the fiduciary responsibilities of the Board, and the overall roles/responsibilities of the Board. General knowledge of operations, and provide guidance to the Board in supporting staff in achieving the operational goals.
Are you the next or the new board chair? Thinking about it in your future? Routinely, a new board chair begins to receive advice – and warnings – from others such as “but we have always done it that way,” or “don’t rock the boat” and, on the flip side, “breathe new life into our board” or “board members aren’t engaged – no one shows up for board meetings.” What do all these comments have in common? They all refer to board culture.
We no longer compete in a resource economy, but a semantic economy where firms that can build, manage and widen connections win out.
In 1985, a relatively unknown professor at Harvard Business School named Michael Porter published a book called Competitive Advantage, which explained that by optimizing every facet of the value chain, a firm could consistently outperform its competitors. The book was an immediate success and made Porter a management superstar.Yet more recently Porter’s thinking has been called into question, most notably by Rita Gunther McGrath in her book The End of Competitive Advantage, which argued that sustainable competitive advantage is no longer possible and advised firms to seek out transient advantage.
In truth, neither view fully represents today’s business environment. Certainly, companies like Apple and Southwest are still able to dominate their industries, but the source of advantage has changed. We no longer compete in a resource economy, but a semantic economy where firms that can build, manage and widen connections win out.
Shifting from Assertiveness to EmpathyThe old economy was relatively simple. Every business had various cost centers and revenue streams that were largely separate and distinct. So Porter’s strategy of breaking down the value chain to its component parts made a lot of sense. By optimizing each business driver, you could minimize costs, maximize profits and increase margins.
What’s more, this optimization process had a cumulative effect. By creating the right incentives, such as pay for performance and letting each business unit “eat what they kill,” firms could invest back into the business, increasing resources that would lead to further competitive advantages. Even a small edge, compounded over time, could be decisive.
Yet today, success is not driven by the resources you control, but those you can access. Increasingly, rather than owning resources and capabilities outright, we use platforms to access ecosystems of technology, talent and information. The path to success no longer lies in clawing your way to the top of the heap, but in nudging your way to the center of the network.
That’s why Geoff Colvin argues in Humans Are Underrated that the most critical 21st century skill is empathy and calls for a shift in emphasis from “knowledge workers” to “relationship workers.” In a world of exponentially increasing complexity, no one person or firm can do it all, so those that can work well with others have a distinct advantage.
A Radical Shift Toward DesignAnother major 21st century transformation has been the shift from atoms to bits. In the old industrial economy, value was mostly created through massive capital spending on plants and equipment. This was a huge barrier to entry that reinforced and propagated competitive advantage through economies of scale.
Yet today we’re seeing a radical shift toward design as a driver of value. After all, Google’s algorithms don’t cost any more to run then anybody else’s and Apple’s products don’t have significant capabilities that rival products lack. Rather,it is their products’ design—how they interface with both users and other products and services—that makes them valuable.
What’s more, with advanced manufacturing techniques such as 3D printing and robotics, the same trends are beginning to drive the economics of even wholly physical products. When production becomes automated, every product is an informational object with design at its core. This development is so important that many are calling it a new industrial revolution.
Finally, as Jon Kolko points out in Harvard Business Review, the emphasis on design is just as important in how we run our organizations as it is in how we develop products. Everywhere you look, design has become a central driver of value rather than an afterthought.
Breaking Down Silos and Networking the OrganizationWe’ve come to take it for granted that we live in a connected age, yet the truth is that much remains separate and disparate. As Gillian Tett explains in The Silo Effect, all too often we work in highly specialized areas that are unable to integrate with each other. When dealing with highly complex environments, these silos create distinct disadvantages.
For example, she cites Sony’s inability to integrate its far-flung divisions as the reason that, despite its various efforts to create a digital music player, it lost out to the more holistically designed Apple iPod. She also points out that silos contributed to the recent financial crisis, because important risks were tucked away in little noticed parts of the economy.
Yet Tett also argues that silos aren’t inevitable and points to Facebook’s policy of having every new employee go through a six week “boot camp” as a way to create connections across the organization. (We had a similar policy at my former company and had similar results.) Every enterprise today needs to think seriously about how to network their organization.
Notice again the stark contrast to Porter’s vision of value chain components. In his view, by optimizing disparate parts, you make the whole stronger. Yet today, agility trumps strategy and we need to think in terms of networks rather than nodes.
The New Economy is a Social EconomyClearly, the world has become more complex. Economic development, technology and globalization have all helped blur the lines of old boundaries to such an extent that we desperately need to reexamine old rules, processes and practices. We can no longer take anything for granted.
That means we need to break free of the reductionist approaches of the past. The basic premise of Porter’s competitive advantage—that you can increase the whole by optimizing each of the the parts in isolation—has become untenable. Rather, we need to use platforms to access ecosystems of technology, talent and information.
At the same time, machine intelligence is quickly replacing human cognitive power much like machines began to replace muscle power over a century ago. More and more, what drives value is the ability to collaborate with both humans and machines. That is where advantage lies today.
That’s why today’s economy is a social economy with collaboration at its center. In the past, we could dominate by accumulating resources and driving efficiency, but now agility and interoperability that rule the day. We need to shift our focus from assets and capabilities to empathy, design and networked organizations.
This is a topic which doesn't get much air but could be as valuable as a board review so this article from Boardsource provides some stimulating reading.
Many organizations conduct exit interviews with departing staff members.
Whether an employee leaves suddenly or gives ample notice, it makes sense to find out what prompted the person to resign. The reason may be personal or work related. A conversation with a departing employee often provides a wealth of information about the
organization, office practices, morale, or other personnel issues. Similarly, when board members leave — whether at the end of a term or prematurely — the board can gain valuable insight about its own affairs from the departing members, if they are willing to share their views.
BENEFITS OF EXIT INTERVIEWS
By chatting with a departing board member, you (as board chair or other designated interviewer) can learn about
• his or her personal experience of board service on your board. If the experience was positive, you may want to try to keep the person involved in some other way; if the experience was negative, you will want to find out why and determine if the board should consider changing the way it operates
• his or her opinion about how the board works, whether its practices are sound, and whether the board functions as a team
• the prevailing reputation of the organization and how the community sees it
• whether the chair is perceived as efficient and motivating
• ideas for changes that would make the board experience more valuable for future board members and improve the effectiveness of the entire board
AREAS FOR CAUTION
If you have a disgruntled board member who is unable to be objective, the interview may turn negative. Board members, in general, do not need to abide by the advice about not “burning bridges.” But serious and constructive critique should always be welcome — even if it relates to the actions and decisions of peers. Personal attacks, of course, are not appropriate. Board members resign for a variety of reasons, including feeling that they are not heard or utilized in a meaningful way; occasionally, they may question the ethical practices of the board. Any comments they make about these areas are worthy of the board’s attention.
WHO SHOULD DO THE EXIT INTERVIEW?
In general, exit interviews should be conducted by the board chair, the executive committee (if you have one), or the governance committee; even the past board chair could perform this role. Trust is an issue when board members candidly share their impressions of their board experiences. The interviewer should be sensitive to the situation and prepared to hear candid thoughts, even the critical ones.
SAMPLE QUESTIONS FOR AN EXIT INTERVIEW
Here are some issues to tackle during the interview. Choose the questions that seem most appropriate for your board. Remember that the interview is not an interrogation but a chat with a person who (hopefully) contributed a great deal to your board and who has valuable observations that may improve board service for current and future board members. Make the exit interview a positive experience so the departing board member will continue to be a
“ freelance” ambassador for the organization.
• Why did you agree to serve on this board?
• Did you receive adequate orientation? Was your role well explained?
• Were there any major surprises? Did things happen as you expected?
• What was most rewarding about your service?
• What did you like least?
• Did you feel you were needed, appreciated, and able to use your skills?
• Was it easy to integrate into the board?
• Did you feel everyone’s voice was heard?
• How would you describe the chair’s leadership skills?
• What was your relationship with the chief executive?
• What advice would you offer new board members?
• What would you do differently now that you have experience serving on the board?
• How would you improve the way the board functions?
• What should be the board’s priority right now?
• Would you be interested in remaining active with the organization or the board? In what way?
When it comes to good board meetings, the little things mean a lot. From temperature to timing, the small stuff can have a tremendous effect on engagement and attention spans. Over at the blog, BoardSource's Natalie Hanlon gives us an on-the-ground look at board meeting logistics and how to manage the details so your board can focus on the big picture.
Tony Hassed - founder and director of BoardSense Limited - the place where we talk about and promote Good Governance and Healthy Boards.