Do you ever see a social media post, listen to a news report or even read a newspaper article about a board of directors that has reportedly gone off the rails? Admittedly, I am drawn to such stories because of my consulting work. I have sadly accumulated quite a file of “governance failures IRL”.
A relatively recent article[1] really grabbed my attention.
The board’s chair approved an increase in the CEO’s salary to nearly 7 figures without the board’s involvement. The decision was made just prior to the chair’s departure from the board to assume a position which made the chair ineligible to continue on the board.
The board was unaware of this change in compensation. After hearing about the situation, the board, now with a new chair, hired an expert to find out how it happened.
Among its findings the report identified “glaring governance failures”. (That part of the article really caught my attention, as you might imagine.)
Upon receiving the report, the board terminated the CEO and issued a press release announcing that the CEO was no longer employed by the organization. The unexpected departure of the CEO – absent any explanation – grabbed the attention of the organization’s members. Some members began to lobby for release of the report. [As the article pointed out: there was a growing call for the board to exercise its accountability to those on whose behalf it was governing. Not just the 60,000 members of the regulated profession, but the public that the organization was mandated to protect.]
Details of the report leaked to the media. Some board members joined the organization’s members in calling for the report’s release. The (50+ member) board changed its mind and released the report which made public the litany of the board’s poor governance practices.
Most boards – even those whose practices and processes are ineffective – do not end up as front page news. But lack of role clarity – uncertainty about who has the authority and responsibility for which decisions and actions – can lead to miscommunication, misunderstanding, and confusion which, in turn, can result in conflict.
A board embroiled in conflict will be significantly constrained in its ability to fulfill its accountability to its members, the public or community or other constituency on whose behalf it is governing the organization.
Are there any warning signs? Check if any of the following describe your board?
- We frequently revisit decisions because the board and CEO have different ideas about the appropriate course of action.
- We have a board committee that helps the CEO prepare staff evaluations
- We spend a lot of time involved in developing and managing the strategic plan
- The board members sometimes disagree with the chair’s decisions
- The majority of our board’s policies are about programs, services and administration
- Our approach to CEO performance review and compensation depends on who is on the board in any given years
Any of these might indicate it is time to clarify the role of your board. Role clarity is a function of clearly documented policies about how it will govern itself and how it delegates authority. A partial list of those policies define:
- The authority, responsibility and accountability of the board, the board chair and board committees
- Expected conduct and performance of board members and officers
- Processes for board education, onboarding of new members, and self-evaluation
- Rules of order
- How the board assesses the performance of the CEO and how it makes decisions about CEO compensation
Why is role clarity important? It is one of the three essential outcomes necessary to effective governance. (The other two are risk management and future focus.) Ineffective boards cannot shape meaningful futures for their organization. Ineffective boards – not necessarily intentionally – betray the trust of those who have entrusted them with the governance of the organization. To quote John Carver: “A board which cannot govern itself cannot expect to govern an organization.”
Postscript: Although the board in the story above was not using Policy Governance®, it had investigated the implementation of Policy Governance® in the mid-1990’s, going so far as to invite Miriam Carver to make a presentation and to have their then-Chair attend the Policy Governance Academy. I have been reflecting lately how this story might have turned out very differently had they adopted Policy Governance, or how it might not ever have occurred.
If you would like to start a journey to role clarity and accountability, why not register for our online course: Introduction to Policy Governance
Or if you are wondering how to ensure continuity… register for our next free webinar: Onboarding New Board Members on September 24th at 3:00pm
If your board would like to further explore this subject or others, consider booking a discovery call with us. This is a free no-obligation conversation to learn how working with us could support your board in achieving role clarity, proactive risk management, and future focus. Book your call today!
[1] “Inside the CEO compensation scandal that rocked Ontario’s legal regulator” Robyn Doolittle. The Globe and Mail. March 31, 2025.