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High performing boards - are they worth the effort?

07 February 2013

So what are the considerations in pursuit of high performance?

HIGH PERFORMING BOARDS are they worth the effort?

The pursuit of a high performing board has become something of a mantra, sometimes with little commitment or real understanding as to the reason why it might be such an attractive goal.  We pose the question as to whether the pursuit is worth the effort, not least because the answer is not immediately obvious.

Some real considerations

There is an immediate problem of definition.  High performing does not mean the same thing for every board.  While there may be some shared characteristics, there will be aspects that differ.  If it is to mean anything, high performance in governance has to be tailored to the specific reality of the charity and its board.

Secondly, many trustees are not inherently interested in the practice of governance because their motivation for being on the board is a commitment to cause of the charity.  This leaves the responsibility for ensuring effective governance in the hands of a few trustees who are relied on to champion this goal - often with little buy in from their fellow trustees. In some cases, there is even hostility or an un-interrogated  reluctance to spend charitable money on trustees.  

There are further serious arguments made against aiming for governance excellence.  One is the danger that the pursuit of a high performing board will divert resources away from meeting the immediate needs of beneficiary.  And finally there is the question of whether the pursuit of a high performing board represents a sound return on investment. These are all legitimate matters of concern, underpinned by a recognition that it may be difficult to identify tangible benefits. 

For those interested in demonstrating impact and outcomes of good governance terms of charitable benefit, the difficult task is to assess what can realistically be directly attributed to the governance development work as opposed to other factors.  A different but related task for boards that have achieved competence in their governance functioning is that of sustaining it.

At its best, attention to governance demonstrates a commitment to continuous improvement with service to the end beneficiaries in mind. At its worst, achieving high performance can be likened to collecting badges or certificates - something to be ticked off a list. 

But just enough wont work

All or any of the points above could be used as an argument for doing ‘just enough’ so that the board meets the minimum requirements for compliance. This is a view we sometimes hear expressed by chief executives who feel the charity is doing fine under their leadership and see no purpose in investing in improving governance.  We understand the source of such a position, but think this exposes the organisation to risks.

Doing ‘just enough’ leaves little margin for error and results in a lack of preparedness to meet the genuinely unexpected.  The corporate sector provides several high profile examples where a static ‘just enough’ compliance based view has been found seriously wanting!

By contrast, an effective board over time builds organisational resilience, enabling the charity to cope better with high degrees of uncertainty over protracted periods.  This is particularly helpful when as now there is so much volatility in the sector (people moving, policy changes and financial strains) and all within a context of increasing competitiveness.  In such circumstances the effective board is one that is sufficiently well-informed and robust to support its executive, but resist the drift to depleting its energies by attending only to operational matters.

Conformance and performance

However, doing more than ‘just enough’ should be driven by more than the argument about managing risk.  It is also about leveraging the potential of trustees. We have seen examples of highly effective boards where the trustees and the executive are working together at optimum, demonstrate clear collective ownership of the strategic direction and have a strong sense of organisational confidence. 

It is also worth asking whether there is a need to reframe what high performance might mean.  Focusing on the corporate sector, Professor Bob Garratt makes a useful governance distinction between ‘conformance’ - external accountability, compliance with regulation and supervision of management – and ‘performance’ – driving forward to achieve the mission and goals.[i]  

Conformance helps the board avoid performance problems arising from poor management or inappropriate use of management discretion.  Performance focuses the board on the formulation of key policies and the strategic thinking needed to take the organisation forward.

Translating this to the third sector, high performance should mean boards doing more than the fiduciary[ii]; it is about the board’s engagement with the strategic and the generative[iii] spheres of governance.   Working alongside the executive, the energy of the highly effective board is concentrated on the crucial issues central to the success of the organisation which in turn inform its scrutiny of results, milestones and measures of success, incorporating the needs of its primary internal and external stakeholders.

A framework to adapt

Below is a framework for exploring this concept with your board. Your trustees will no doubt need and wish to insert additional criteria that reflect the current needs and context of the organisation.

 

High performing boards- moving beyond conformance

CONFORMANCE CRITERIA

Met/Not met?

Board action planned

Charity Commission Regulatory requirements in place

 

 

Consistent process for board recruitment, and rotation

 

 

Oversight of  finance and risk 

 

 

Board meets regularly; consistent attendance by trustees

 

 

Board papers available;  Minutes provided; decisions and actions accurately  recorded

 

 

 

 

 

PERFORMANCE CRITERIA

 

 

Chair plans content and foci of Board meetings with Chief Executive

 

 

Emphasis in meetings is on strategic oversight

 

 

Trustees interrogation of  strategic areas is robust and productive

 

 

Detailed governance monitoring delegated to sub-committees

 

 

Trustees resolve minor queries in advance of meeting

 

 

Trustees arrive well prepared

 

 

 

Changing Board practice

The change of gear required will only happen with deliberate attention.  It may well require a shift in the composition, skills and working methods of the trustees, as well as the nature of the “social relations”[iv] between trustees and between trustees and senior executives.  This latter relationship we believe is critical to achieving high performance.  The board must acquire a sense of community and bond in its commitment to delivering benefit to the organisation over the long term.[v]

The best boards we have seen work at it consistently, often using an external facilitator as a companion to their governance improvement journey. They say such support provides them with insight and encouragement, while acting as both a catalyst for continuous improvement.

This version of high performance need not take enormous amounts of time and resources. The art of it is to find and use short cuts for the spade work, so that you can focus mainly on supporting the growth of capacity and fluency with which the board and the executive work.



[i] Garratt (1996) – The Fish Rots From The Head - The Crisis in Our Boardrooms

[ii] Chait, Ryan and Taylor (1996) – Improving the Performance of Governing Bodies

[iii] Ibid

[iv] Nadler (2004 ) – Building Better Boards

[v] Fulop (2011) – Developing A High Performing Non Profit Board

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Ruth Lesirge

Ruth Lesirge is a management consultant and former tutor on the Cass CCE degree programme and has a special interest in chair, chief executive, board and trustee development.

www.ruthlesirge.co.uk/

 

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Hilary Barnard
'Hilary Barnard is a management consultant, specialising in strategy and change consultancy services and is a Senior Visiting Fellow at Cass. Business School. He is a former charity chief executive.'

.

www.hilarybarnard.com

 


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