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March 4, 2021

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Richard Stringham

Is it Time to Do Away with Board Values Lists?

I’m not a big fan of boards creating lists of values.

There. I’ve finally come out and said it and I’m glad I did!

Of course, now I need to explain myself.

A few decades ago, I ran a youth leadership development program. Toward the end of my tenure as the program manager I convinced the group of sponsoring organizations that we needed a set of values for the program. Ironically, the board of my organization had a set of values, but they were just a list of words: integrity, transparency, honesty, etc. 

The list we created for the youth program was much superior, not just because I was the key architect (excuse me while I pull my tongue out of my cheek), but because each item on the list had an explanation of its meaning.

A few years later, I was promoted and, among my other responsibilities, I became the supervisor of the new manager of the youth program.

Although our office was in the city, the program was run in a beautiful camp setting near the Rocky Mountains. Consequently, when the program was taking place, the youth program manager was on site at the camp. At one point, I made the three and a half-hour drive to the program site to observe the program firsthand.

I was horrified.

One of our program’s values had been completely disregarded, while behaviour was borderline regarding a couple of the other values. Perhaps I shouldn’t characterize it as “disregarded.” In fairness to the program manager, I had reviewed the values statements with her when she first started the job several months earlier, along with a myriad of other information one gives to new hires. We hadn’t talked about them since.

I don’t believe she was being defiant. The values simply weren’t a part of her operational mindset. Who remembers all the information dropped on them at their new job orientations?

That’s why I have issues with board value statement lists. It’s not because the values listed are unworthy. I believe boards are sincere when they create these lists. It has more to do with the follow-through.

Too often the board will create a values list and perhaps post it on the wall of the boardroom; but what keeps the board on track with those values?

Some will refer to the relevant policy when the board is deliberating a decision. But are those values being applied consistently at both the board level and in operations or only when convenient? “Yes, transparency is on our list; but we don’t want the public to know what the board policies are because that might create expectations among stakeholders.”

You must be wondering if I’m advocating that the board operate in some sort of disorderly approach, absent a consistent set of values. Actually, it’s quite the opposite.

In my opinion, the better approach for the board to embed values into the organization is to create policies beginning with the broadest of values (e.g., “CEO, don’t do anything imprudent or unethical”) and then further interpret those broad values into specific expressions of values via more specific policy statements.

In this way, the board can express values for what the organization is to achieve, for whom, and what that achievement is worth. It can also state its values for what would be unacceptable in operations by being more specific about what it means when it says “don’t do anything imprudent or unethical.” The board’s values regarding its own behaviours and how it delegates to others should also be captured in policies using this concept of broad to specific. 

With all the board’s values captured using this special policy architecture, there is still the potential for the values to be ignored. The remedy for that is rigorous monitoring. As Louis Gerstner, Jr. the former CEO of IBM, put it so well: “People do what you inspect, not what you expect.” 

So, it’s not values that I dislike; instead, it’s values lists that aren’t applied. If you’re wondering how to create values-based policies and a rigorous monitoring system as I’ve described above, have we got a governance system for you!

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