PART 1: Does Your Board Need to Downsize Before it Implements Policy Governance®?
- Posted by Rose Mercier
- On May 27, 2020
- Board Structure
From time to time I like to Google the topic of board size – prompted either by a question I’ve been asked by a board – usually wanting to know the relationship between board size and effectiveness. Sometimes I go down the Google rabbit hole simply out of curiosity. Okay, I know board size is a strange thing to be curious about, but it has allowed me to reflect on how this topic is evolving.
At this moment, I think there is a general tendency to favour smaller over larger boards. But then, I stop myself from adopting ‘small is beautiful, or effective in this case’ as my automatic response. I have also read lots of articles that favour one board best practice over another – and wonder – is a smaller board just another best practice that bears closer scrutiny.
Following is some of what I have l read:
- There is no universal agreement about the ideal board size or the relationship between board size and effectiveness.
- Board size seems to be of particular interest to corporate boards – thus the seemingly growing number of research articles into the link between size and profitability. I have even seen regression analysis of the impact of the board size on profitability. (And, knowing you might ask: as a varied simplified explanation regression analysis would try to mathematically sort out whether board size has an impact on profitability and how important that impact might be. It’s really important to remember “correlation does not equal causation” – meaning that even if there were a relationship between board size and profitability, it doesn’t mean small board size causes profitability.1 Apologies for going down that rabbit hole…
- There is less research related to board size and organizational effectiveness in nonprofit or public sectors because, well…the whole definition of ‘effectiveness’ in those sectors means is a subject about which there is much debate.
So far, I am not really helping you answer your question, do you need to downsize before adopting Policy Governance? Assuming that there is no single “right” or “magic” size of board, there are three ideas that might help answer this question:
- First, the size of your board may be dictated by legislation or an external authority – so thinking about downsizing might not even be an option. Make sure you know if there are legal or regulatory constraints on size.
- Second, there is no principle in Policy Governance that dictates the size of the board, although that is a myth that you may have heard.
- Third, making a change such as adopting Policy Governance is a good time to consider board structure, including size.
So, if your board is thinking about implementing Policy Governance and wants some support in considering whether or not to downsize before, let us know. Our consultants have worked with boards of every size, and helped boards through changes in their size other elements of board structure.
1 Amy Gallo, “A Refresher on Regression Analysis”, Harvard Business Review, November 4, 2015.