Who Makes A Good Board Member?
- Posted by David Gray
- On June 10, 2020
- Board Recruitment, Board Role
I’m often asked what qualities distinguish a good board member from a not-so-good member, so that boards can try to recruit the former. In my opinion, there are three qualities.
The first is a comprehensive understanding of the Policy Governance® system. Yes, I’m completely biased in this respect, but I regard the system as the gold standard for boards and I wish every board member on the planet understood it. As a consultant and coach to boards, I’m happy to discuss with them their needs for governance development, but I’ll only choose to work with a board if it practises Policy Governance. Life is too short to mess with second-best.
The second quality I recommend looking for is common sense, and the third is courage. Board members who can apply common sense to a range of matters in an even-handed way, and have the courage to tackle tough issues head on, are invaluable. There’s nothing worse than a board that tolerates the intolerable simply because it can’t summon the courage to face the problem.
Having described the qualities of an ideal board member, it’s worth commenting on what to avoid. In my experience, there is one kind of individual who almost invariably has an adverse impact on a board’s ability to govern well. This is the person who is appointed for his or her technical expertise in the organisation’s business; for example, a medical doctor who is appointed to the board of a health services organisation, or an expert in investment management who is appointed to the board of an investment entity. Individuals in this category seem irresistibly drawn towards the role of mega-CEO. They consider it their right and duty to second-guess the decisions of management. It’s a recipe for problems, and most boards struggle to rein in this kind of behaviour.
Some time ago, a well-known corporation in New Zealand appointed a high-profile marketing ‘guru’ to its board. The publicity accompanying the appointment referred to the appointee’s skills in marketing and branding and foreshadowed the positive impact he would have on the company’s marketing effort. The problem this creates is obvious: who is now responsible for the company’s marketing strategy? The new board appointee? The CEO? The marketing manager? More to the point, who will be held accountable if the marketing strategy fails? Appointments of this nature almost always compromise the proper flow of authority and accountability within the organisation. The correct position is that the CEO is accountable for the marketing strategy. If the CEO needs help with the marketing strategy, then he or she should obtain help—perhaps even by engaging the marketing guru as an advisor to management—but without compromising the separation of governance and management.
This problem is particularly acute here in New Zealand with certain kinds of Māori entities, notably those land-owning entities which, by law, are governed by a Committee of Management (that’s the term used in the legislation). These committees almost invariably comprise people with hands-on knowledge of managing the land and the operations it sustains. They make all the key management decisions — how much fertiliser to apply this year, whether to milk Jersey or Friesian cows, how many kilometres of fencing to repair, and so on. These are truly management committees. Yet they are also governing bodies with governance responsibilities, especially in relation to their owners. Governing bodies that grapple with this particular tension are well advised to split their work into two domains, clearly separating out their governance responsibilities from their managerial role and following the principles of Policy Governance in making delegations of authority from governance to management.
(I’ve heard it suggested that the members of such governing bodies should come to meetings with two hats, one red and the other blue. When the group is operating in governance mode, the red hat is worn; when in management mode, the blue hat is worn. I’ve never seen this done, but it might be a useful last resort if the group is really struggling to make an appropriate separation.)
Recruiting suitable board members can be a challenge, especially if there’s a dearth of candidates, but careful attention to these few simple points can save a great deal of heartache further down the line.