- Posted by Richard Stringham
- On August 29, 2017
- Board Structure, Owners and Ownership
Does your Board seem excessively overpopulated? Are you thinking a weight loss strategy is in order, but can’t find the right diet? Perhaps it’s time to rethink your governance processes.
To illustrate, federations (organizations owned by several organizations) are often victim of this syndrome. Federations can include inordinately disproportionately sized organizations in which the dues and/or usage of the Federation is tied to each member organization’s size.
Accordingly, it is not unusual to see larger organizations given more seats at the table. And, if the belief is that the smallest of the member organizations should have at least one seat at the table, then the numbers of Board members can easily swell to well above 20.
Simple math shows that the ability of Board members to participate is severely diminished when the numbers are so high. For example, a Board of 28 directors meeting for a solid seven hours (not including breaks) averages 15 minutes of speaking time per person. And one would expect that certain people (e.g., committee chairs and the CEO) would have a bit more airtime which would further reduce the 15 minutes for each of the others!
Of course, diversity is also important at the Board table.
Although the jury is still out on the optimal number of board members, the number appears to be somewhere in the 5 to 12 range. Certainly, outside of that range, the balance between diversity and meaningful participation erodes noticeably.
More to the heart of the matter is the concern of representation associated with Board members. Smaller organizations or regions of organizations want a “voice” at the table. Larger organizations or regions will want more representatives to champion their viewpoints. Some may even go so far as to seek to direct their representatives regarding how to vote (which is not a healthy practice if lawsuits are to be avoided)!
I believe that the answer lies in rethinking the Board’s connection with its ownership. To begin with, Board member Jones does not stand in for or “represent” organization X. Instead, the whole of the Board stands in for the whole of the member organizations.
This means that each of the Board members should be seeking to better understand the perspectives of all of the organizational members so that Board decisions better represent the values of the whole of the ownership. To do so, the Board as a whole should determine what it will ask of the owners (as ownership questions, not customer questions) and reach out to proactively engage with the whole of its ownership over time. It can add to that process by transparently sharing what it learned and how that has impacted the direction the Board is taking.
If the Board can master such linkage, there is less anxiety about various voices not being heard and the structure can be built on a healthy Board process. In other words, form follows function, so first conceptualize a linkage implemented by the whole of the Board with the whole of the ownership. With that in place, then determine the Board structure!
It may never be a utopian world for the Board of such a federation. But then again, I’ve never seen a utopian Board of 24!
For more about governance structure, see Richard’s article: Avoid these Pitfalls when Developing Your Governance Structure.