We’ve Always Done it This Way…
- Posted by Jannice Moore
- On April 8, 2021
- Board Agendas, Board Meetings, Board Role
As I cleared away the remainder of our Easter ham this week, I was reminded of an old story. “Mom, why do you always cut the end off the ham before cooking it?” asked the youngster.
“Well, that’s the way my mother always did it.”
“But why did she do it that way?
“I don’t know. Why don’t you ask her?”
“Grandma, why did you always cut the end off the ham before cooking it?”
“Because my roaster was too small!”
I was reminded of many boards I have seen. Boards continue with practices that add no value – and in fact may detract from the real business of governing – because it’s always been done that way.
“We’ve always approved the financial statements every meeting. It’s what previous boards have done, so there must be a reason (but we don’t really know what it is).”
“Of course, we must approve the budget. We’ve always done it that way.”
“The strategic plan? Yes, we’ve always approved that, too.”
However, none of these “we’ve always done it that way” approvals are based on clearly-articulated criteria, so if a few board members got up on the wrong side of the bed that day, CEO beware. The hard work you’ve just done in creating that budget or strategic plan may have to be redone, because some board members have been expecting you to read their minds about what should have been in that plan.
There is a better way. You can have the whole ham! If the board as a group sets criteria in advance about what conditions would cause it to reject a budget, or a strategic plan, the CEO knows the ground rules up front, and is not subject to the ideas of any individual board member about what should be in the document. Budgets and strategic plans are really management tools to achieve the results the board expects. (Those results should also be set clearly up front, as well as who the results are for and what it’s worth to achieve them.)
The board’s role, after setting the criteria, is not to approve, but to monitor. Does the budget contain elements the board said would be cause for rejection? If so, the board sends it back for retooling. If not, the board’s assessment is that it meets requirements. The board need not approve it. (If legislation or regulation require formal approval, it can then be given on a special “Required Approvals” portion of the agenda, but with the recognition that the real governance work is not approval, but monitoring – assessing compliance with pre-stated criteria.)
Before continuing a practice because you’ve always done it that way, stop and ask, is there a better way? The approach described above is part of a complete system that allows a board to focus on the core elements of governing: setting direction, protecting the organization, and being accountable to those on whose behalf it governs. If you’d like to learn more about this system, contact us at The Governance Coach.