Is your board continuously improving its capacity and ability to govern well?
Your organization exists to make a real difference in the lives of those it serves. More to the point, a well-governed organization ensures 1) those benefits intended to be received by those intended to receive them are actually received, 2) the benefits received are worth the resources used, and 3) the means used to provide them do not violate the ethics and prudence limitations the board has established in written policy.
Board development is critical to ensuring those objectives are accomplished. Board development activities involve 1) recruiting and selecting the proper board members, and 2) ensuring they are equipped with the knowledge and skills to govern effectively. In my blog, Ten Traits of Effective Board Members, I explored the issue of recruiting and selecting board members with the right traits that will enable them to govern well. Here I will explore the importance of engaging in consistent, proper, and effective board education and training.
Board education has one purpose and three primary areas of focus. The purpose of board education is to ensure that your board members have the knowledge and skills to govern effectively. Governing involves directing and protecting the organization; it involves “steering” the organization versus helping management “row.” So board education should be designed and implemented for the purpose of equipping the board to govern well, not to manage.
Specifically, the three areas of focus for board education coincide with the following three primary contributions the board makes toward ensuring the organization’s success:
- Connect with those who are “invested” in the organization’s mission (owners, for shorthand), on whose behalf the board governs.
- Ensure written policies are developed and maintained that delineate a) the board’s expectations regarding what benefits will be provided to whom and at what worth (Ends, for shorthand), b) the board’s ethics and prudence limitations on the means used to achieve those Ends, c) the board’s own work and processes, and d) the board’s process of delegating to and monitoring the person that reports to it (CEO, for shorthand).
- Ensure the board-established Ends are achieved within the Board-defined ethics and prudence limitations through a structured monitoring process of the CEO.
Consequently, the board’s education plan should involve gaining knowledge and skills in accomplishing those three job contributions. Accordingly, a board’s education plan might include, but not be limited to, the following:
- more effectively connecting with your organization’s owners in order to gain insight into their values about the Ends
- exploring the risks faced by the organization that may impact accomplishment of the Ends
- gaining foundational knowledge regarding financial, investment, insurance, and/or legal risks and concepts that may impact your board’s ethics and prudence policy limitations, so all board members have sufficient understanding of those concepts in order to evaluate board policy in light of their values regarding those types of risks
- discussing your Ends with a board of a similarly focused organization or a community foundation to gain that board’s perspective on your Ends, such as possible priorities within your Ends or how they would interpret key elements of your Ends along with their rationale for doing so
- becoming more future-focused as a board
- engaging in strategic thinking related to your Ends
- effectively and properly monitoring the CEO to ensure compliance with the board-established Ends and CEO limitations policies
- practicing how to handle different situations in light of your policies
- implementing a comprehensive orientation program for board members, including a review of their legal duties as board members, your governance approach, and your written board policies
Of course, these are just a few of the many types of meaningful board education ideas that a board may choose to use. In any case, board education should be focused on the three areas of board responsibility and designed with one purpose in mind: to equip the board for effective governance. If your board is not engaged in systematic and purposeful education, it will not govern well over the long-term. Do it for the good of those the organization serves.