Board of Directors’ Duties: Tip 8 – Role of Committees

Board of Directors Duties Team with SilhouttesBoard of Directors’ Duties:  Tip 8 – Role of Committees

Boards often use committees to get work done that would seem rather onerous to be doing at board meetings. Committees can be very helpful to the board. A small group, 2 to 5 people, can research information on major issues with which the board has to deal. They can take the time to explore what’s happening with the competition, to see what leading edge techniques are being used in the industry, to look at the financial impact of a change, to consider pros and cons of alternative approaches, or to identify multiple options for moving forward on an issue. Often what happens next is the committee spends a lot of time deliberating about which option is best. They may consider four alternatives quickly narrow the field to A and B, and then spend hours trying to whether to recommend A or B to the board. When they finally decide B is the best choice, the committee reports at the next board meeting and gets bombarded with questions. “Well, why did you pick this, and have you considered that, and what about this?” And then maybe the majority of the board says “No, we’re not going to go with B”.

What the majority of committee members have told me when that happens is they get deflated. “Why did the board ask them to do a job if they didn’t want them to? I wasted my time. Here we are in a board meeting spending even more time on the issue. Our valuable hard work isn’t even valued.”

Another option is that the committee does the work and the rest of the board says “Yeah! The work’s been done!” “This is an issue that I really don’t want to get into, I don’t understand it so let’s ratify the committee recommendation”, and in 30 seconds the board has officially voted to accept the committee’s recommendation, making a binding decision for which all the board members are liable, and moved on.

I suggest that neither of those results are ideal. The reason the matter has to be brought back to the board is it’s considered of critical strategic importance and, therefore, the whole board needs to think about it. All the board members need to understand this topic. However, it’s very frustrating for committee members that may have spent days trying to decide between option A and option B to have a slap in the face, it seems, by their recommendation not being accepted.

We suggest an alternative. Assign the committee the job of researching, fleshing out options, considering the pros and cons of each option, and summarizing background information. Then, several days before the board meeting the committee sends the analysis they have done, and the research and thoughts that they’ve gathered, to the board members for review. There is no recommendation in the committee’s report. The board members now have to review the research that the committee has put together and, before the board meeting, consider which option serves the organization best.” Then at the meeting there can be a whole board dialogue regarding which option is best.

The committee has added great value to the governance process by doing due diligence and gathering background information, and all the board members fulfill their role of actively participating with diverse perspectives in decision making.

Consider giving your committee the job of gathering information that will equip the whole board to make an informed decision and you will be travelling your pathway to governance excellence.

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Board of Directors Duties: Tip 6 – Role of CEO

Board of Directors Duties Team GlobalBoard of Directors Duties:  Tip 6 – Role of CEO

The Chief Staff Officer, be he called CEO or Executive Director or General Manager, is responsible for leading the work of the organization. He’s responsible for being clear on the goals and implementing the directions he gets from the board.

We often suggest that the job description of that Chief Staff Officer can simply be to fulfill the strategic plan while following board policies. The senior staff person must communicate to the people that report directly to him and then in turn ensure that communication happens down the line, so that everyone in the organization realizes what the goals are and how they are expected to achieve them.

The Chief Staff Officer is also responsible for monitoring, for following up with all the departments in the organization and helping them pull back on track if the goals don’t look like they’re going to get achieved. And the key responsibility of the Chief Staff Officer is to help everything go well.

The Chief Staff Officer is a role model. He is the head of the operational side of the organization; lots of people are watching them. When there’s a conscientious, ethical Chief Staff Officer, there is frequently a trickle-down effect resulting in ethical operations. The CEO has a very important role ensuring that the direction he receives from the board is carried out for a successful organization. When a Chief Staff Officer fulfills his role well, the board sees great results from its governance excellence.

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Board of Directors’ Duties: Tip 2 – Role in Strategic Planning

Board of Directors Duties Strategic PlanBoard of Directors’ Duties:

Tip 2 – Role in Strategic Planning

Since the primary role of the board is to direct the organization for a successful future, the board is responsible for guiding the strategic planning process. Some of you may be saying that board members are only part time with the organization and the staff are full time so they are the best people to develop the strategic plan.  As board members we’ll approve the staff’s plan afterwards. I encourage you to consider the concept of generative board leadership as discussed in Board Source’s book “Governance as Leadership” written by Richard Chait et al.

If the board is really going to lead the organization, it has to be setting strategic direction. The way that a part-time board can do that is by bringing to the organization all of the wisdom, insight, knowledge, and experience they have about the world around them, the world around the organization, and the world that the organization serves.

The excellent board also consults senior management and various staff of the organization to so they are informed about the current reality within the organization. Ideally, the board also consults some customers and other stakeholders, and gets research on the organization’s competitive position and industry trends.
When all of that information is gathered, a retreat can be held with the board and senior management, and perhaps a few other staff and stakeholders.  This is an ideal place for everyone to dig into the gathered information, consider the multiple perspectives that have been suggested in surveys or focus groups, and think hard about how to improve the future of the organization.  Consider what is not being done now, that if done would take the organization to a higher level of mission fulfillment.

Board leadership is critical in strategic planning, as board members can focus on making sure the organization is working in the right forest. Those involved in daily operations are more likely to be focused on how they water or harvest one particular tree. It’s hard for full-timers to step back and focus on the big picture; it’s so easy for even an excellent senior management team to get swayed by their operational reality. Yet, strategic planning requires looking from 10,000 feet.  Therefore, when the board guides the strategic planning process you are moving forward on the pathway to governance excellence.

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Board of Directors’ Duties: Tip 1 – Purpose of Board

Board of Directors’ Duties: Board of Directors Duites Board Room Empty

Tip 1 – Purpose of Board

There are two main purposes of boards of directors, first to direct the organization, and second to protect the owners’ and members’ interests. Directing the organization includes things like developing a strategic plan, selecting a senior staff person, and being heavily involved in setting and confirming the goals for the organization. It’s the board’s job to direct the organization towards a successful future.

Secondly, it’s important for the board to protect the owners’ or members’ interests. This means risk management, it means having governing policies in place that provide parameters for everything the organization does. It also means reviewing progress that the organization has made towards the goals in the strategic plan and redirecting operations when things are off track.

Almost everything the board does can be summarized in these two purposes. The board of directors directs the organization’s future; the board of trustees protects the interests of the owners or members of the organization and all boards have responsibility to fulfill both purposes.

I wish your board the best as it directs and protects along your pathway to organizational excellence.

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