Effective governance is achieved by taking a long term view – this can be quite challenging in the face of uncertainty about the future. The temptation can be to make choices based on limited perspectives rather than on the larger picture that would emerge if you seek more information and evidence.
There are four important steps you can take to achieve good governance:
- Ask the right questions. Be curious, inquisitive and hungry for all pieces of the puzzle.
- Strive to find the answers to those questions. Shift through what you are seeing and hearing. Is a clearer picture emerging? Your picture should harmonise with (a) your participation in the governance (b) The purpose, vision and mission of the organisation
- Act when the time is right – in the knowledge that you are acting on the best and most comprehensive information available. Do everything possible to make wise decisions.
- Stay alert to the environment in which you are operating. Situational awareness is key in a changing environment. This includes paying attention to emotions. Listening out for the emotional climate can help a governing board and the executive team get to the core of what can strengthen or weaken the organisation. Emotions are a very revealing indicator of the condition of the organisation.
If you take the these 4 steps you give yourselves a great chance to succeed and sustain a high level of performance. Even if some decisions do not work out you can gain from the wisdom gleaned from failure. Clarify what you need, have a clear view of what success will look like and seek the relevant guidance that sheds light on your situation. With an appropriate assessment, an understanding of underlying principles and practical application, anything is possible.
Governance is not just about regulation, policies and procedures: it has a human face too. Board agendas are often cramped, meaning that more personal, sometimes difficult and uncomfortable matters do not get discussed. Sometimes there is a sense of uneasy compromise. But creating an environment where trustees can discuss matters of real personal concern can add significantly to the effectiveness of an organisation.
Last year, a successful service-delivering charity appointed a new chair. The first thing she did was to initiate a board assessment, which recognised that the board needed to clarify its goals in relation to new key performance indicators for the organisation. The next few months uncovered some uncomfortable undercurrents within the board, with some members feeling there was an inner circle that made all the decisions. The chair encouraged the trustees to voice their concerns, particularly about the challenges thrown up by the rapid growth of the charity since taking on more public service contracts.
A few trustees would not play, and left. But the majority gradually became more engaged. They were given specific responsibilities as part of the plan to meet the new strategic agenda, and time was allocated to developing fresh ideas. Trustees and senior management began having the difficult conversations that two years before would have been unthinkable, and this candour led to better decision-making and an end to the previous blame culture and power struggles.
The board now has the confidence to focus on what really matters, to say what it means, to encourage different points of view and to work as a team.
“This has really changed the way we do business and the way we treat each other,” says the chair. “More importantly, it has enhanced our effectiveness as a board to lead this organisation.”
Surely there is a lesson in this for every charity.
Process without the right culture will fail
Headlining at Trustee Exchange, Peter Moore the only UK banking employee to speak out publicly about irregularities he witnessed from inside of a bank, stressed that the crisis at HBOS was caused because there was a completely inadequate separation of powers and balance of powers between the executive and all those accountable for overseeing their actions. He warned that an organisation can have the best processes in the world, but if there is unethical behaviour and an indisposition to challenge, they will fail.
Key governance lessons learned are the need for:
- A sound culture,
- The capability of control functions (audit, compliance, internal audit)
- Corroboration in oversight work
- Up to date company laws
Good governance is about sound compliance and structures, clear and consistent policies, processes and procedures and a healthy culture supported by appropriate behaviours. Often governance reviews look at fiduciary matters, at systems and do not seem to acknowledge that culture, values and behaviours underpin strong governance.
Without appropriate behaviour or conduct, governance will fail irrespective of structures that are fit for purpose or clear processes.
“Climb mountains not so the world can see you, but so you can see the world ” Unknown
With social media connecting more people, networks and causes, there is a viable avenue to addressing the deficit in trustee placements. Delivering Effective Governance: Insights from the boards of larger charities (by Mike Hudson and Jacinta Ashworth) found that the most effective methods of recruiting candidates for board membership were reported to be board member, staff contacts and public advertisements. 68% used external methods and 10% used only external methods.
Admittedly, more than one approach is needed to counter the board recruitment challenge. LinkedIn, the professional networking site, offers a free new service called Board Connect to help charities recruit board members who have much-needed skills. LinkedIn prides itself in matching talents to the right people and engendering strategic partnerships online by professional online connections and sharing. . Continue reading
I love the line in Pirates of the Caribbean where one of the actors alluded to policies that needed to be adhered to by the Pirates. The other Pirate retorted, ‘they are not so much policies; they are more like guidelines’. With this in mind, I usually find it helpful to reflect on rules of the road that can build and sustain effective governance. Six of these listed have been of immense worth as I walk the journey with boards.
Rule1: Address Board/Staff relationships
Lack of clarity about what is governance and management can plague even the best of boards. Effective governance emerges by board members, the Chief Executive and the Senior Executive Board members agree the nature of the contact between trustees and senior staff. This level of clarity helps them to recognise appropriate boundaries and how they can work better together. More boards are introducing confidential sessions attended by board members only. These sessions are useful where the board members need to discuss their performance and matters that keep them awake at night with a view to working better as a strategic team. Continue reading
I had the brilliant opportunity of attending the 2014 Charity Awards. It is a great place to meet old friends and to make new ones. This year was no exceptions. I have enough hugs to take me into 2015! The ice on the cake was meeting 19 year old Jermain Jackman, Winner of TheVoiceUK 2014. I was a massive supporter of Jermain and relented after 10 years to cast as many votes as I could for him to win. I told him this and got rewarded with a warm hug. What a surprise! In addition to having a great voice, he comes across as such a warm and inspiring person with an amazing presence.
So what do we do when we come across these unexpected happenings? I found myself tongue tied, happy and excited all at the same time. And I am aware I am not a teenager. Happily, I was able to string some words together sensibly and got a lovely photograph to mark the occasion.
Back to those opportunities in our environment, in our organisations, in our boards, when we work with staff and volunteers. Do we recognise them? Do we grasp them or sometimes do we just let them slip by?
Great leadership and strategy design is not just to look out for the threats and challenges, but to seize opportunities when and as they arise – in an informed way of course, because we can’t take on everything. The challenge then becomes one of knowing which ones to take on and which to leave behind without any regrets. Good luck on your journey!
Never Too Young
I have been really inspired by this young boy who led the service in our church. He was confident, committed and charismatic. What has helped? The vision of the pastor to get the young engaged as early as possible. Coaching and mentoring makes a difference and it can provide support at any age. More than anything it is a win-win all the way round.