What should a Board NOT do?

Thanks to my colleagues at the Association of Consultants to Nonprofits for the following review of a little-examined topic: how to keep your Board from meddling where it’s not wanted or helpful.  Betsy Harman raised the question on ACN’s members-only listserv but was kind enough to permit me to share the answers here.  Intriguing that the most useful source turned out not to be from the nonprofit sector at all.

I have found some excellent resources from Board Source about the role of
the board but they focus on what board members should do.  I am seeking a
couple of resources that spell out what things are not part of the board’s
role.  For a project I am working on, I need some quotes from a well
established, trusted source that discusses why board members should not
micro-manage and second guess staff.  If you know of a good book or article
on the things board members do that hurt rather than help organizations, it
would be most appreciated.

A few days later, she checked in with the results:

Michael Leonard pointed me to a source with just the authoritative quote I
needed. . . .

The Board Book:  Making Your Corporate Board a Strategic Force in Your
Company’s Success, by Susan F. Schultz (AMACOM 2001), pp. 8-10, 20-22 – This
book is geared to for profit sector but has a great deal of material that is
relevant. Chapter 9 on the value-add role of directors lists 23
characteristics, duties and responsiblities of good directors.  One is:
"Don’t Micromanage:  Distinguish between policy and operations and respect
that difference.  Don’t second guess management, even if it is an area in
which you have specific expertise.  The temptation is to solve problems.
Instead, assess management decisions against the strategic plan."   The
Board Book, page 158

Ten Critical Mistakes to Avoid

Failure to recruit strategically
Too many insiders
Too many consultants
Too much family
Too many cronies
Getting the money wrong
Fear of diversity
Information block
Passive directors
Failed leadership

What is Stopping CEOs (from having strategic boards)?

Perceived threat to independence
Focus on tactics
Makes extra work
Resistance to change
Ego
Insecurity

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6 Responses to “What should a Board NOT do?”

  1. Anita Bernstein Says:

    With all due appreciation for the experience that I lack, I am surprised you call this checklist “the most useful source” of guidance for boards that seek to become “strategic.” I read it as the usual gobbledygook that new board members are expected to take seriously.
    * Manage, but don’t micromanage.
    * Don’t second-guess management (even if you have expertise in the area [!]). But do assess it. Does that mean that board members should either fire the ED and other employees or leave them alone, but never do anything in between?
    * Distinguish between policy and operations. How, exactly?
    * Avoid the Scylla of too many insiders (Critical Mistake 2) and the Charybdis of too many outsiders (Critical Mistake 3, on consultants).
    I’m not gettin’ it.

  2. Nonprofiteer Says:

    I’d never advise a Board to “manage but not micromanage”–Boards shouldn’t manage at all. A nonprofit Board’s job is to set the agency’s direction–which means adopting a strategic plan–and then get out of the way while the staff drives. I guess (to beat the analogy to death) if the Executive Director is speeding the Board can say “Slow down” a couple of times before pulling the emergency brake–but that’s about the range of options because yes, in fact, Boards should either fire the Executive Director or leave her alone. The Board’s real job is to make sure the agency has sufficient resources–that there’s gas in the car–and that means its attention should be turned outward into the community rather than inward onto the agency’s management.

    I suspect, though I don’t know, that the original question arose from a Board’s effort to intervene in agency personnel decisions–that’s when Executive Directors are most desperate for pithy ways of saying “hands off”. To me, “Don’t second-guess management even if you have expertise” means, “You, v.p. for human resources at some local company; I don’t care what you know about labor-management relations, you don’t get to tell the ED of this nonprofit how to handle her staff. If they’re complaining to you, they’re out of line; and if you’re listening, you’re out of line.”

    I will admit that “Distinguish between policy and operations” sounds almost deliberately content-free, but in most agencies it will be clear that, e.g., our policy is to provide shelter for victims of domestic abuse, so if we’re failing to do that in any circumstances the Board is entitled to ask why, but our operations involve putting some victims in group shelters and others in individual housing and the Board shouldn’t be second-guessing those individual decisions.

    Finally, of course, it’s hard to strike the proper balance between insiders and outsiders but I think the caution against consultants is actually a reminder not to bring in “volunteers” who have something to sell you, while no amount of reminders about the importance of diversity could possibly be too many.

  3. Gene Finley Says:

    Governance should be assigned based on time and magnitude of decision risk. In general, a board should focus on the greater than one year time frame. An example of this is approving the budget. Management works in the less than one year window executing the budget. Similarly, the board has responsibility for the strategic plan but their role is to monitor management’s execution for the plan they’ve approved.

    I like to keep a good fence between management and the board. The most effective tool I have is written policy stating the responsibilities of each.

    One place you might find helpful quotes is the 168 page document Red Cross just produced about their proposed governance changes. There’s a section that analyzes the board’s day to day involvement and makes recommendations for getting the board less involved, well less involved in operations.

  4. Anita Bernstein Says:

    Okay, I understand the division of labor between boards and
    management better now, and so I withdraw much of my criticism. I do
    stand by my claim that Schultz’s “checklist” is pointless, however. Your simple automobile-driving metaphor distinguishes sharply between board business (“strategic,” policy) and day-to-day operations. The conscientious board member needs no more, I think: she certainly wouldn’t learn more from the Schultz items. In addition to being devoid of content in its particulars, the checklist as a whole implicitly encourages board members to keep a meddlesome eye on what is going on in the nonprofit day to day.

    When Schultz mentioned “expertise” as an insufficient basis for a board member to intervene, I was thinking of something like real knowledge of accounting, regulatory compliance, risk management, zoning laws etc. rather than the invocation of alleged “expertise” in HR, a bogus category, to interfere with personnel decisions.

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