In previous posts, I have discussed the role of a chair, why policy matters, and other types of questions. Today I want to specifically tackle two things because they are burning in my heart and I need a constructive outlet.
Why Good Governance is Essential
Good governance is essential because it is the way in which we manage organizations at a high level, staying out of the day to day operations. Boards hire experts who can manage though on board-specified outcomes.
By all board members, a lack of understanding of governance, especially for a governance board, can lead to all kind all kinds of problems:
- Dominant board member(s) who run off as mavericks doing non-board business and making decisions.
- Directors’ energy being focussed on and drained by non-governance conversations.
- The CEO can lack clarity on what’s expected of him or her when boards are not following a systematic approach in their style of governing. This, in turn, affects the entire organization. Clarity matters. Good governing helps us get that much-needed clarity and helps us to easily identify when we are off track and need a course correction.
- A poor reputation among stakeholders. I love this quote: “Reputation — good governance delivers good products which in turn lead to good business performance. The reputation of a company can make or break it in the market.”1
Why Who You Choose as a Chair Matters
It’s often too late when boards realize they put the wrong person in the role of chair. Boards find themselves with a poor reputation, with unhappy stakeholders, repeatedly cleaning up messes from a maverick, or feeling like they have spent one, two, or perhaps several years serving, only to look back wondering what was actually accomplished. Policies serve as roadmaps.
Before I had studied board governance, I actually didn’t understand the value of a good chair. I am better studied now and I can easily see when a chair is acting as an effective chair or when he or she is acting without the knowledge of governance. Please hear me: nice, smart, likable people can be in that position, but it doesn’t mean that it was a good choice and that a board should not make a course correction as quickly as possible if they feel the board chair is not representing the board well or helping the board govern well. Or better yet, make sure that whoever is chosen as chair undergoes ongoing training in the area of good governance. They are, after all, leading the board, and should be doing so with best practices.
Chairs model the way, I’ve said that before. And a huge part of the role of chair is to ensure the board is following its own policies – that’s why they are also often referred to as the Chief Governing Officer. The chair, too, is expected to be accountable for and accountable to the board for doing just that. Directors, use your voice, ask good questions of your chair, and never be afraid to challenge policy violations!
I just cannot stress this enough, choose wisely who the chair is because if left unchecked, disaster can happen. If we want enduring governance, then board development in this area is of critical concern. Recommendation: As a collective board, either develop someone who is willing to be trained in this area or actively seeks someone who has experience in this area – the organization you are entrusted with governing needs the best from its board.
Most boards have a budget, make sure you allocate some of it to invest in growing the capacity of the board in its responsibility to govern.
Questions about board governance, please post them in the comment section. Got any good articles about good board governance, please link them in the comments section.
Have an amazing day!
Reverend Carmen Kampman
Carmen & Ashley invest in others so they can lead and live better. They are the co-founders of LEAD Women.