Wednesday, April 28, 2010

A Hybrid Board Governance Model that Supports Strategic Planning

In previous posts, I’ve emphasized the close link between strategic planning and governing board development. Strategic thinking and planning is at the heart of what it means to serve on a nonprofit board. We therefore need a governance framework that fosters and supports a strategic planning mindset among board directors.

But there is a problem: What’s the right approach to board governance? There are a dizzying number of governance models that have emerged over the last several years and an equally dizzying number of valiant efforts to categorize and sort out the main models. (For one summary of major governance models complied by a former school superintendent, see the article “From Stewardship To Leadership”) At the same time there is broad emerging agreement about the core qualities of effective boards. These core qualities are summarized in a quote from Mel Gill, president of Synergy Associates:

There is a growing convergence of expert opinion that the most effective boards, regardless of the size, complexity or mandate of their organizations, concentrate their attention on those matters that are crucial to success or survival; that they focus on measurable results within defined timetables; that they engage in regular monitoring of the manner in which business is conducted, the efficient use of resources and the achievement of objectives; that their decision-making is transparent, and that they provide proper accounting to key stakeholders.

Effective boards focus their attention on "the critical few, rather than the trivial many", regardless of whether these are operational, management, or governance (strategic or fiduciary) issues.

The most successful boards, within this framework, develop a collaborative partnership with senior management; seek agreement between key stakeholders on vision, values, goals and expectations (tempered by the reality of available resources); ensure clarity with respect to roles and responsibilities; establish constructive processes for resolution of conflicts and conflict of interest; and cultivate an organizational culture characterized by trust, teamwork, mutual respect, flexibility, adaptability, and responsiveness in the face of the ever-changing realities, resources and needs of consumers.

Gill also talks about "dynamic hybrids” -- increasingly boards are developing dynamic hybrids of several board types, adapting concepts and practices that best fit their particular circumstances.

In response to this "dizzying array" of models and approaches, I propose that we draw on the following three resources as we think about the governance model, systems and practices that can serve as the foundation and the framework for board development work:

• Dynamic Board Model from McKinsey & Company
• 12 Governance Principles That Power Exceptional Boards from BoardSource
• Governance as Leadership Framework from the book by the same name -- Governance as Leadership by Richard Chait, William Ryan, and Barbara Taylor

Taken together, they provide a solid framework that supports the strategic mindset I spoke of earlier. For more information about these three excellent resources, go to the article “A Hybrid Board Governance Model”.