Archive for the ‘Accountability’ Category

What’s the Right Size for a Board?

Thursday, March 17th, 2016

A few governance consultant colleagues and I are experimenting with Blab. Blab is a terrific forum for group video broadcasting and live chat combined. On our last Blab, we had some discussion about board size. I made a comment about “doing the math” regarding board size and length of meetings. Most boards do not have enough time for everyone to participate fully. One of my colleagues challenged this comment because not all people want to talk on every topic. My simplistic example was not meant as a prescriptive way to determine board size. What I wanted to illustrate was the issue of being intentional about providing opportunities for gathering collective wisdom among a diverse group.

Larger representative boards can be effective. During the Blab, we discussed the problem of coordination and getting everyone together. A smaller group cuts down on the severity of the problem. Also, collective and diverse wisdom is a board member selection issue. What boards need to seek is diversity of thought and heterogeneity in board composition. However, diversity can yield to adverse affects if the group is too large, e.g., stalemate or lack of mutual trust among members.

“Rich information content must be balanced against the capacity to pool members’ varying types of expertise in an effective manner,” (Krause & Douglas, 2013, p. 147). Krause and Douglas also noted that smaller boards tend to cultivate rich information content by exploiting diverse sources of information. A larger board can be effective if there are ways to ameliorate the social uncertainty of large, diverse boards. That, too, was something we explored — using technology as a way to keep a larger group engaged and involved. We talked a bit how technology can also be a barrier to good dialogue and engagement. If you want to hear the whole thing, it’s here.

Reference

Krause, G. A., & Douglas, J. W. (2013). Organizational structure and the optimal design of policymaking panels: Evidence from consensus group commissions’ revenue forecasts in the American states. American Journal of Political Science, 57(1), 135-149. doi:10.1111/j.1540-5907.2012.00614.x

What is a worthy organization?

Friday, March 4th, 2016

“…ethical values are a
foundation for achieving integrity, defined herein not only as incorruptibility but as
a total commitment to the highest standards of behavior” (Strickland & Vaughn, 2008, p. 233).

Strickland and Vaughn assert that integrity in an organization is built on foundational values, such as accountability.

In a series of essays, Robert J. Ballantyne explored how an organization achieves worthiness or fulfillment of potential as described by Strickland and Vaughn. To capture in one place the wisdom generated through working with and leading a number of nonprofit organizations, Robert and I collaborated on a book, The Worthy Organization. You can also see Robert and I in a series of videocasts on Blab discussing the contents and purpose of the book.

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Strickland, R. A., & Vaughan, S. K. (2008). The hierarchy of ethical values in nonprofit organizations. Public Integrity, 10(3), 233-251. doi:10.2753/PIN1099-9922100303

Accountability and nonprofit boards

Friday, March 4th, 2016

Expectations of nonprofit boards – and of those who serve on them – are established by tradition and maintained by the status quo (Carver, 2002).

An expectation of nonprofit boards is they are accountable to achieve something on behalf of the community that created them. How do boards establish what is expected of them?

Last night, I was struck by the ethical issues at the Wounded Warriors nonprofit. In the CBS News report, a long-time supporter and major fundraiser was asked if the board of directors should be held to account for the scandal that is now emerging. Without hesitation, the supporter said “Yes.” (You need to note that a CBS executive serves on the Wounded Warrior board.)

But what is accountability? How does a board know to whom it is accountable? How does the board know for what it is accountable? How do people in the community know that they are accountable to ensure the board is truly representing them? How does the board know what their community really thinks?

Over a period of several months, the Xylem Group has explored these questions with academics, nonprofit leaders, and elected government leaders. What we’ve been hearing and learning are being brought to a broader audience on Blab.

Look for more on Blab and join us when you can!

Carver, J. (2002). John Carver on board leadership. San Francisco: Jossey Bass.

Policy Governance and Tone at the Top – When Nonprofits Fail

Friday, May 23rd, 2014

Nonprofits are failing at a high rate (e.g., Flanagan, 2012; Nonprofit Trends, 2014). Despite strategic planning and fund development, supporting resources are not available to many nonprofit organizations. You and I may be familiar with the relentless begging of most nonprofits. Yet, if the organization’s mission is compelling and the business model is sound, why do nonprofits have problems attracting resources? If organizational leadership (i.e, the board of directors) cannot determine the underlying cause of business failure, then the problem may be the process of decision-making or making judgment. Are decisions based on intuition or reasoning? Can Policy Governance provide boundaries for rational or reasoned decision-making that underlie better business outcomes for nonprofits?

Yes, IF the board is committed to using their policies and following PG principles. John Carver provided a framework of governance that can help a board define its job and the job of management. PG is built on what are comfortable and known – organizational values. Organizational values are expressed in policy and policies are organized around the work that needs to be done. However, PG is far more than creating a new set of policies. The PG model goes beyond the boardroom and applies it to everyone in the organization that touches the population or consumers served. PG means that everyone in the organization has a commitment to achieving the desired future state or Ends. Everyone in the organization is aligned with organizational values and constantly seeking better ways of attaining the Ends. That alignment and commitment is what attracts resources to an organization.

In my 23-year career of either working for boards or counseling them, I’ve never seen Policy Governance® (PG) fail. Conversely, what fails is the board process. Board process refers to the culture of interactions in the boardroom. Policy Governance creates a framework for sound decision-making and robust assessment for making judgments. What it doesn’t do is dictate culture or how a board should interact. Think about it. Ground rules in any social interaction make a difference but they don’t work if people don’t commit to them or follow them. PG also takes practice, practice, practice. PG is powerful. But a board needs the skill that comes through practice to use it to its fullest effect.

PG works. But only if the board has the will to make it so.

See Flanagan (2012)
See also Nonprofit Trends (2014)
See Carver & Charney (2004) The Board Member’s Playbook

Boards that add value are accountable for a healthy organizational future

Monday, March 3rd, 2014

When a board spends most of its time reviewing what happened in the past (e.g., monthly reports or budget reports), it is merely responding or reacting to something it cannot influence or change. It takes little skill or wisdom to review a report and pronounce judgment as acceptable or unacceptable. What does take skill and wisdom is the act of looking at disparate factors in the environment, seeing patterns, and determining how those trends in the changing environment affect the future health of the organization.

Boards demonstrate accountability for looking out for the investments of owners — not when they are merely pronouncing judgment on past performance. Yes, past performance can be an indication of whether or not organizational initiatives are working. But where the real value lies is in interpreting performance in the context of a rapidly changing world. Are boards willing to be accountable for envisioning a future for an organization? Or do boards believe that shareholders and stakeholders only want immediate return-on-investment and short-term, incremental gains? It is, perhaps, a chicken-and-egg discussion.

Consider this McKinsey report on building forward-thinking boards. What do you think?