Canadian FundRaiser eNEWS August 31, 2005
Article 7 of 11
 

GOVERNANCE     -    Mel Gill

Governing for results - essentials of an added-value approach

Most directors of boards don’t simply want to fill a chair at the board table or a line in their resume. They want to add value to the organization they serve and add benefit for its members and clients. And they want to be helpful to the CEO, rather than an extra burden or thorn in the side ... although any long-serving CEO will have had some share of the latter.

Boards can act as a drag on an organization if they don’t know their role and how it relates to management or by overloading management and staff with unmanageable expectations and often redundant committee work.

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Discussions about governance often occur without common agreement on what it is and what accountability means.

Governance can be defined as the exercise of authority, direction and control of an organization in order to ensure that its purpose is achieved and proper accounting is given for results.

Accountahility is the capacity of key stakeholders to call decision-makers to account for their actions. Effective accountability has two components: answerability and consequences. The first is the requirement to respond periodically to questions concerning one’s official actions. The second is the need for the application of sanctions for breach of rules.

Systematic planning adds value

Many boards do well with an informal approach that is grounded in the adage start where you are, use what resources you have and do what you can. However, any organization, regardless of its stage of development, structure or size, can derive added value from a board that cultivates a culture of systematic planning, monitoring and evaluation that is focussed on the results it seeks to achieve. And it can do so without investing in the rigorous application of a prescriptive governance model.

A board that is governing for results ensures that the organization has a clear vision and goals,

with objectives that are as concrete and measurable as possible for the particular organizational context. It concentrates its efforts on areas of board, rather than management, responsibilities 

unless, of course, it is an operational, collective or management board. Regardless of board type or organizational form, a more rigorous approach to strategic planning and performance monitoring can enhance board effectiveness.

A board that is committed to governing for results relies heavily on its CEO as a full partner in developing direction and policies, but maintains sufficient independence from management to ensure that it can objectively evaluate CEO performance. It clearly delegates to the CEO the responsibility and authority for achieving approved objectives. The three basic organizational functions – governance, management and work – are highly integrated, regardless of the size and complexity of the organization.

Mix of skills contributes to success

Successful governance relies as much on attitude as on action, though both are essential. Success depends on the right mix of board skills, chemistry and personal motivation. It depends on common commitment to the cause’s vision and mission. And it depends on a high degree of trust and teamwork within the board, and between board and management.

A focus on results requires the board and management to adopt a logical framework for establishing performance benchmarks for the organization, its programs, the CEO and the board. It ensures that adequate systems are in place to measure performance, and that the board monitors or audits that performance regularly. It measures and monitors the indicators of goal attainment that matter most to the organization’s overall success.

The board and management must be clear on the problems that they wish the organization to address (or needs they wish it to fill); develop a clear vision of the ideal world they’d like to see; articulate a mission that defines what role they see their organization playing in progressing toward that vision; enunciate realistic goals and SMART (specific, measurable, achievable, relevant to the mission, time-delineated) objectives; measure performance against established targets; anticipate and mitigate perverse secondary impacts; and respond to changing circumstances with flexibility and adaptive strategies.

Manage risks, audit compliance

A board that is focussed on results must ensure that adequate systems are in place to identify and manage real or potential risks to clients, staff and volunteers, and to conduct audits to assess compliance with legislative requirements, bylaws, governance policies and established standards of practice.

It engages stakeholders in planning, ensures that its mission and objectives are clearly communicated and its decision-making processes are transparent, and it accounts to stakeholders for the results of organizational investments and efforts.

A board that is governing for results must be introspective. It regularly reviews its practices to ensure that it preoccupies itself with the most important issues facing the organization, ensures that it has good information for working on those key issues, maintains good communications with key stakeholders, sets clear expectations and standards for the performance of the board and the organization, and reflects on its own performance to ensure that it is open to innovations in its own practices and that it adds value to the efforts of management and staff.

A recent article in the Harvard Business Review identified four basic characteristics of board work which fit well with the governing for results approach. "First, the board concerns itself with do-or-die issues central to the institution’s success. Second, it is driven by results that are linked to defined timetables. Third, it has clear measures of success. Finally, it requires the engagement of the organization’s internal and external constituencies."

Feel at home

A board is more likely to add value to staff and management efforts, according to recent studies, if its members experience a sense of belonging and collegiality, have fun, enjoy personal recognition, have opportunities for learning and development, and are committed to quality work.

The basic premise of governing for results is grounded in the following paraphrases of Zen paradoxes:

  • If you don't know where you’re starting from and you don’t know where you’re going, any road will get you there. 
  • But how will you know if, or when, you’ve arrived? 
  • Or whether you've made any progress at all?

For further information: Mel Gill, President, Synergy Associates, consultants in governance and organizational development, 57 Westpark Dr., Ottawa ON K1B 3G4, 613/837-8757, fax 613/837-1431, mel.gill@synergyassociates.ca, www.synergyassociates.ca; Gill is the author of' Governing for Results: A Director’s Guide to Good Governance, from which portions of this article have been drawn. He will lead a Canadian FundRaiser Key_To_The_Sector workshop on Best Practices in Nonprofit Governance November 16; further details to follow.



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