Archive for the ‘General’ Category

Boards not accountable for anything?

Tuesday, January 15th, 2019

During a public meeting, some colleagues I really respect discussed a board’s lack of accountability. I think the words were “boards are accountable for nearly nothing.” The colleagues consulted with an attorney who supported this position. Well, I cannot concur. Think about Wells Fargo. Think about the Wounded Warrior Project. Ultimately, the boards were accused of not fulfilling fiduciary duties under the law. In 2015, a board of a home for the aged was found liable for not fulfilling its fiduciary duties. On appeal, the $2.25 million punitive damage award was vacated. But the board got itself in trouble because it wasn’t paying attention. Because it wasn’t paying attention, a private college foundation board came under scrutiny from the community served. Even very small nonprofit boards can be sued. For more on how a board determines its accountability, listen to a discussion from the Xylem Group.

If you want a scholarly review regarding what a board is accountable for, go here

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?

Corporate accountability – blah, blah, blah

Monday, May 13th, 2013

This morning, The Xylem Group had a very interesting teleconference. We discussed the debates and dialogs going on over corporate governance, the focus on profits, doing more with less, and accountability. Accountability to whom? That’s the big question.

Friday, The New York Times reported the average carbon dioxide reading surpassed 400 parts per million at Mauna Loa on Hawaii. Carbon dioxide is the heat-trapping gas that scientists believe is responsible for global climate change. The operative word is “average”. Readings have exceeded 400 PPM before, but now the readings of 400 PPM have reached an average daily level. Many countries (with the notable exceptions of the U.S. and China) have adopted a maximum target level of 450 PPM. At that point, we’re likely to experience some major changes that we humans may not be able to adapt to very well. If the scientists are right, without some major limiting efforts we will reach that level within 25 years.

Our children and our grandchildren will be living through the effects of global climate change. What will they see?

Rising temperatures mean significant climate change and implications for fundamentals like water and crop production. People can live without a lot of things, but not without food and water for very long. How will humans cope with long-term droughts in major crop-producing areas throughout the globe? The UN says that nearly 1 in 10 people don’t have clean water. Despite reduced birth rates in the developed nations, the population continues to grow. With over 7 billion people on the planet, the demand for fresh water continues to grow. Shortages of water mean shortfalls in crop production. In areas that are already suffering from dearth of water development projects and lack of food (where we already see major conflicts and human suffering connected with a winner-take-all mentality), how will the additional stress impact those people?

Rising sea levels will put billions of people in harm’s way. Where will they go?

How will all of this change global economics?

My colleague Robert Ballantyne has long been pointing to the unbridled power of our global corporations and lack of accountability. In a recent tweet, he said “Our systems of government, money, and corporations were developed when unlimited growth seemed possible. Those systems are obsolete.” Similarly, I have long lamented the “taking” mentality of financial institutions. John Bogle created my awareness of this issue. When you consider the amount of money that the financial sector takes out of our economy and never puts back (it is called asset management), what is the value of digital wealth? You can’t eat it and you certainly can’t drink it. With all of that power, the state that empowers creation of corporations requires some body of people (the board) to be accountable. What’s missing with many of our corporations is clarity about accountability, don’t you think? If (for example) a corporation board believes their only accountability is to the bottom line profits (shareholder ROI), what might be sacrificed in that pursuit? We see it happening all too frequently (JP Morgan Chase, Wal-Mart, Enron, garment industry and Bangaladesh).

Same is true for non-profits. In their non-ending quest for money (there is never enough), often the boards fail to recognize how resources could be better leveraged or possibilities for partnerships/collaborations. In other words, constantly focusing on the means does not ensure successful achievement of the Ends. In the larger scheme, how many more people could be served with better quality and at a reasonable cost to society (the commons) if boards took a holistic view of their existence/accountability?

Maybe a different dialog about accountability can start small with cities or municipalities, but it needs to start somewhere. Without incentive to change, nothing will change. A protest here, a shareholder reaction there, none of it is working.

Protests and government penalties? It’s like water off a duck’s butt.

I love the settlement the major banks made with our US government. The average homeowner who was wrongly or illegally evicted from their home will receive $300 on average. Oh, and by the way. The checks bounced. Great. Was that fair compensation for uprooting a family and forcing them to rely on relatives, friends, and the community to help?

As much as financial institutions want to blame the homeowners for poor financial judgment in taking out loans they couldn’t afford, it’s no wonder those same institutions believe it’s okay to shift the blame for their own lack of lending judgment to the rest of us. Oh, and yes, they made us responsible for the consequences, too. Notice how their fingers are pointing everywhere else? No accountability here! Dear banks: when you point at someone else, remember that three fingers are pointing back at you.

What is the board’s responsibility for a fair economic and environmental exchange? Is it fair for Wall Street to hoard billions and banking institutions to lend only to those who have demonstrated economic success? I’m not against people having money. I’m for the idea of creating institutional accountability for what is taken out of our resources (yours, mine, everyone’s). I’ll close with one of Robert’s tweets, “We, humans, have the power of change and transformation. We now need to create the organizational skills to be responsible stewards.”

Workforce planning – Do it now

Friday, March 29th, 2013

In the public sector, I found that leaders knew the perfect storm of a labor shortage was coming. What they didn’t understand was that the tomorrow they feared is today.

Are you neglecting workforce planning?

A workforce plan is more than a headcount. It encompasses recruiting, performance management, learning and development, succession planning, and compensation. Along with job descriptions, your organization needs to understand its human resources business drivers (e.g., roles, talent requirements). A strategic workforce plan is clearly aligned and integrated with the organization’s business plan and HR business drivers.

The workforce plan includes internal and external analysis along with a future workforce forecast. The internal analysis includes reviewing and understanding core capabilities, pivotal roles, and skill set changes needed in the emerging and future environment. The external analysis includes industry trends, demographics, and workforce supply and demand factors. Following internal and external analysis, the future workforce forecast is developed (i.e., by skill set, by job role, numbers, and timing of recruitment and hiring).

Professional associations can be a major force in helping educate your members about developing a workforce plan and a catalyst for industry-wide planning.

I work with my local community college to develop curricula to meet upcoming business needs. The college is responsive to requests, but is also dealing with funding cuts. College administrators need to have clarity on the knowledge, skills, abilities, and other vocational training your industry needs in order to plan for curricula development.

Here’s a link to a RAND process for workforce planning. Or you can copy and paste this into your browser

Classic NPO mistakes in hiring a CEO

Monday, March 25th, 2013

I recently got this question from one of my professors in I-O Psychology:

“Have you noticed that non-profit organizations tend to write vague job descriptions, even when looking for an executive director? Perhaps it is due to the fact that most non-profits operate with limited funds.

Recently I found out about an executive director position for a local non-profit. When I read the description, it was lacking detailed information especially important interpersonal characteristics. Although these characteristics are important to the executive director role, the job description lacked these characteristics and it was vague. As a result of this, the organization generated over twenty-five candidates. Before they started interviewing candidates, the search committee ended up sifting through all of the applications to narrow down the list. However, what would have happened if the interim director had decided to write a more detailed job description, including interpersonal characteristics. Do you think they would have generated fewer and more qualified applicants?”

NPOs are my area of expertise and I have several answers to this question. Let’s begin by understanding the context. Often board members’ tenure is shorter than the CEO (e.g., they don’t have the institutional history or understanding that the CEO does). The long-term CEO often could not begin to describe in detail what he/she does (e.g., growth and development over time led to professional or personal changes that she/he has not devoted conscious thought to). Priorities can shift with the economic conditions. Depending on the type of organization (e.g., charitable, trade association, foundation), culture often dictates desired characteristics. Also depending on the type of organization, board member volunteers vary in expertise, background, and skills. Even the most gifted human resources person or bank manager will not have the depth of understanding to write the job description that will lead to hiring an effective NPO CEO. Volunteer board members tend to want to adapt what they know about hiring and employment to hiring a NPO CEO. It is not the same situation.

One board I worked with was faced with the retirement of a long-term CEO. When I asked what attributes or characteristics they were looking for, the chairman said (in all seriousness), “We don’t know, but we’ll know what we’re looking for when we see it.” Good thing I kept listening. I had to suppress my astonishment because I almost laughed and asked if that was a joke. The next comments left no doubt that the board intended to go on a fishing expedition. That’s likely why the NPO my professor asked about got what they got. Classic mistakes by NPO boards in hiring a CEO:

1) Hiring on the rebound. Like a recent breakup, losing a long-term CEO is a gut-wrenching affair. Boards inevitably will try to hire someone as quickly as possible to avoid the pain of loss. Rather than think through strategically what type of leader is needed for the future, the board seeks to replace what was lost. Bad idea. I’ve seen these rebound hires time and again. They never last (usually not past six months). Just like dating on the rebound, the board can never replicate what they once had. Besides, organizations change. What the organization needed in a leader 20 years ago is likely not the same as what the organization needs today.

2) Hiring someone from the board ranks. Familiarity and cameraderie with a person is never a good reason to hire that person for the top job. Boards think it a great/smart idea because they don’t need to wrestle with messy stuff like job descriptions and interviews and background checks. Yuck! However, the relationship changes the minute the person goes from “peer leader” to “employee”. Intimacy and trust turn to fear (and sometimes loathing) when expectations are not made clear. Another problem is when new members come on the board, they may not be so enamored with the other board members’ good buddy…I’ve seen this happen at least a dozen times. None but one worked out.

3) Going on a fishing expedition. This is what the board client I already mentioned did. Boards end up writing a job description that in no way resembles what the board needs and/or only vaguely describes what it wants. This one is classic because it’s similar to writing an RFP for services without thinking through what outcomes one expects and articulating those into specific skills or experience needed. One small staff (3) organization board thought they wanted a great financial manager because of increasing revenues and organizational complexity (investments and such). They got one. Only one teensy problem: this is a community entity that also needs a charismatic leader who will interact with the public and members. The new CEO is an introvert. Not gonna happen. But the books and investments are in great shape! Which set of skills/characteristics would have been easier to outsource — charismatic leader or introverted financial guru?

What do I think about writing a detailed job description? Do it. But hire someone who can be objective and ask critical questions to help. My favorite saying is, “What will end up biting you in the butt are the things you don’t know you don’t know.” No one knows everything and not even the smartest collection of board members will know everything. A healthy dose of outside perspective can cause light bulbs to light all over the boardroom.

I need someone to organize my virtual social life

Friday, February 8th, 2013

Twitter, LinkedIn, Facebook, Pinterest, Google Plus, groups, followers, followings, likes/dislikes….AAAGGGGHHH! I can’t keep track. Oh yeah, and there’s YouTube and all the other media content sites like LiveStream. One needs a social network data assistant to stay on top of it all. Why, oh why, isn’t there one solution to make them all connect with each other? For example, I’d like to go to LinkedIn (my preferred site for fascinating dialog and connections with other professionals), enter one post, and have a pop-up box ask me to check all the other social networking sites I want to have that post referenced in. I’ve learned a few of them do work together, but it’s not a system.

Here’s what I mean:

Say I post something brilliant in the Boards and Advisors group on LinkedIn. I would like some of the other groups I’m in to see it too. Couldn’t there just be a way for an app to pop up with a message like this:

“Sherry just posted something you should see here: [insert appropriate link]”

Obviously, I would want to select (check all that apply?) which groups or sites (e.g., EIGA group on LinkedIn, FB, Twitter, Google Plus) are appropriate. The African Grey group on FB probably doesn’t care about the lastest trends in corporate governance. Also, I’d want to select which social networking site. I pretty much keep my personal and volunteer social networking (FB) and business networking (all others) separate.

And then, as long as I’m wishing, I would have a summary of all my activity tracked by this app solution. Maybe LinkedIn Premium does some of this but I’m pretty sure it doesn’t act as my personal virtual life organizer for everything I do online…

Thoughts? Solutions?

Policy Governance Drove Me to…

Tuesday, January 15th, 2013

Psychology. Why is it difficult for many?/most? boards to move to a comprehensive, logical system of governing? What’s that old joke: “Why did the man stop hitting himself with a hammer? Because it felt so good when he stopped.” See my blog post about 30-year-old technology. Why would good, smart board members subject themselves to something klunky, old-fashioned, cumbersome, time consuming, frustrating….when it can stop? See the LinkedIn discussion.

Would you buy 30-year-old technology?

Saturday, March 3rd, 2012

The ad reads: “Car ‘phones. They’re no longer the privilege of the chosen few.” In 1982, I actually had one of these Vodaphone babies. I was climbing the corporate ladder of a Fortune 500 company in Chicago and got one installed in my company car. Yes, the company provided me with a personal car (every 50,000 miles I got a new one) and all the gas and maintenance (those really were the good old days). My employer was on the cutting edge of management effectiveness and efficiency. I was part of testing the technology.

My “mobile” car phone was the size and weight of a very large brick. And it was truly a car phone because the base was mounted to (and used power from) the car. I didn’t need to go to the gym to lift weights because the handset provided a good deal of dead weight training. Those of us testing the Vodaphone used to joke that if it quit working, it would make a great boat anchor. I’m surprised I never got whiplash from lifting the handset to my ear while driving. Okay, so yeah. If using your cellphone with your bluetooth is a driving hazard, just imagine how dangerous I was on Lakeshore Drive!

Now here’s what I carry around today: a phone that is not tethered to anything (except maybe my hand or earbuds). It’s about the weight of a pair of scissors and about the size of three packs of dental floss laid side-by-side. And it doesn’t merely connect me by voice-to-voice over cellular. It’s my personal data assistant, office manager, and personal entertainment center. It also responds to my whims. (Siri is my new love, but don’t tell my husband!)

So why do boards of all types and sizes still run with 30-year-old technology? Yes, the basics are still sound. Compare today’s smart phones with my car phone 30 years ago. Why would you choose to carry around a big, old brick that doesn’t do much versus a small, sleek device that caters to your every whim? Is your board functioning with a mindset from 30 years ago? Before you say no, consider this.  Nonprofit organizations proliferated in the 1980’s (Board Source, 2003). Much nonprofit regulation did too. Not surprising that governance structure, culture, and practices emanated from that period. Businessmen populated boards and they brought their management expertise to the boardroom. Unfortunately, management expertise does not necessarily translate to governing expertise. In the management mindset, governing is typically viewed as “management one level up” and tethers a board to the past instead of creating the future.

Why does it seem like transformational governance is still the privilege of the chosen few? Board members and executives, please throw the 30-year-old+ mindset out the window. C’mon now. Don’t say that you don’t know what I’m talking about. At association and nonprofit organization conferences, I still hear the same complaints that I was hearing 20 years ago. Here’s the chronic complaint: why does my board micromanage (i.e., get caught up in administrivia)? Because they don’t have anything more important to do. Because they haven’t found a way to delegate effectively and know their wishes for the organization will be fulfilled. Or, the board recently had a crisis that involved a major financial risk (e.g., embezzlement, lawsuit, the ED who was the “rainmaker” just left). The list goes on and on. People tend to revert to old, dysfunctional behaviors when they feel unsure or threatened or are just plain bored. Governing from this mindset is like picking up the Vodaphone and expecting to have Siri grant your next wish. Remember the implication when you expect different results from doing the same thing over and over again.

The magic of smart phone technology did not happen because Steve Jobs said, “Let’s redesign the Vodaphone!” The magic happened because Steve Jobs had a vision of something sleek, powerful, and ready to go to work for you out of the box. Why would you buy 30-year-old technology when you could have an iPhone?

Unleash the power of your board and explore how you can best use the collective wisdom of all those smart minds in the room. Don’t make them sit through one more staff report or approve one more budget until you think about why you’re asking them to do it. What is the value added? What magic could they envison if given the time?


Geographically dispersed boards

Thursday, March 1st, 2012


Most of my client teams (board and staff leaders) are geographically dispersed. As an organizational and governance consultant, I give them the value of my expertise in organizational structure, policy development, and implementation. Usually I end up working as a leadership coach as well. When the client board and staff meet face-to-face only once or twice a year, communications and consistency is a challenge. In some cases, the entire board never gets together face-to-face.

I talked with Keith Ferrazzi who is an expert on relationship development. When I asked him if geographically dispersed teams can work together effectively, he asserted it was absolutely essential for the team to get together face-to-face at least once (personal communication, June 15, 2010). I believe he is correct. The ability to see someone’s facial expressions, gestures, and body language helps you interpret what you hear in that person’s voice and read in their emails. It’s also more difficult to get angry with someone you’ve met.

Working with a board is challenging in the best of circumstances, but working with a virtual, geographically dispersed, or technology-networked board creates unique group process problems leaders need to recognize. Forging a cohesive team from individuals in the same building is challenging. A dispersed board team faces multiple difficulties of time, distance, social, and cultural differences. Subgroups form and sometimes this leads to in-group versus out-group conflict and competition. Dispersed teams need to establish shared norms and agreement for common action toward overarching (i.e., superordinate) goals.

Shared norms start with setting ground rules about communication and how conflicts will be resolved. Conflict is normal. That’s why it’s so important to establish how your board will deal with conflict before it happens. One rule you should have is to avoid prejudging each other. Listen first (or read email first) as an advocate, as though you will need to defend your fellow board member’s position.

Everyone on the board brings a unique set of information, resources and knowledge. After setting the ground rules, the board needs to fully discuss the benefits of sharing mutually. The enhanced ability to generate knowledge, stimulate creativity, and increase efficiency through diversity is a major advantage. Diverse points-of-view make for better decision-making. A full discussion helps board members learn how to value diversity and share the wealth of knowledge and skills available. From this sharing, trust is built.

Setting ground rules, communicating and sharing mutual knowledge help create trust. But for everything to work, everyone on the team needs to take responsibility for the board’s success. If things aren’t going well, take the initiative to suggest an alternative communication tool — teleconference, data conferencing (Skype, NetMeeting, etc.) — that allows for simultaneous discussion. The more variety, the better.

No matter what’s going on, be sure that you stay upbeat. Nothing helps a board work together better than proactive, positive board members!

ROI on Social Media?

Tuesday, February 14th, 2012

Reading Scott Stratten’s book on Unmarketing. His take on ROI for social media (about it giving him ulcers!) resonates with me. As it did with many folks on the ASAE executive management section listserv. The thread was titled “Why is everyone making this so damned complicated?” As Stratten pointed out in his book, why is the right question. ROI is the wrong answer.

As a former trade association exec, my team constantly struggled with determining the ROI or value of various member relations tactics. Newsletters, websites, direct mail, workshops, speakers bureaus, social media are all tactics that are tied to strategic goals. All tactics are part of the overall strategy for an association to be visible and approachable, friendly and trustworthy. Selecting the right metrics to measure ROI stems from business objectives and strategies — not from the tactics. Resources should be organized around the strategic metrics — not around tactics. The challenge is determining the goal and coming up with an operational definition of how achieving the goal will look. If the goal is a birthday cake, then the operational definition is the recipe. But first you need to decide: what flavor and texture of cake do you want?

Susan Etlinger conducted qualitative research with 60 social media marketers and vendors. The purpose of her research was to tie social media performance to business goals. She identified six business goal categories: brand health, innovation, customer experience, marketing optimization, operational efficiency, and revenue generation. For some associations, brand health may be the goal (i.e., understanding how people talk about the services, products, and other selections available).

The social experience is an important component of any association. Revenue is not a transaction. It is a relationship. Associations need to know how their online actions are affecting those relationships. One interesting finding of Etlinger’s is improved brand health and increased revenues had a direct correlation with social media and customer experience. If you want to know what people are saying about your organization, google analytics probably won’t provide the data you need.

One benefit of social media is fulfillment of a need for members to have an online community of like-minded professionals. Which, in turn, can attract other birds of a feather. When people cannot come together face to face, social media provides a substitute for the proverbial water cooler. Social media forums provide proximity for people of similar attitudes to come together virtually. Attitude similarity is one of the most consistent factors of attraction in social psychology research.

Social media is a tactic to engage members and fulfill a need for affiliation and dialogue with like-minded others. If this is the only “outcome” of this tactic, it has value. Measurable? Perhaps not in traditional terms. However, we all know it is more costly to get a new member than to keep an existing member. If members are retained because they feel connected and engaged, social media may be a contributor. But an added benefit is dynamic social media forums may also attract some new lurkers, fans, and eventual members.

Social media is part of the entire recipe relative to an association’s business goals for membership retention and recruitment, product and service sales, or public relations. Start with what you want to measure before you choose a measurement tool.

It gets complicated when you’re trying to measure how good a chocolate cake tastes when carrot cake was what you wanted.