The line between the Governance functions and the Management functions of an organisation, and the associated separation of duties between the Board and the Chief Executive Officer (CEO), can often be an area that causes tensions within an organisation’s leadership.
On a number of occasions, I have worked with not-for-profit (NFP) organisations only to find that the Board is not really fulfilling its governance responsibilities properly, and that in fact the CEO is effectively leading the Board.
Willingly or otherwise, CEOs can sometimes find themselves filling the governance vacuum created by an ineffective or inactive Board, in order for the organisation to be able to continue functioning – and I do appreciate that sometimes NFPs just wouldn’t meet their governance accountabilities, were it not for the CEO steering the ship.
But it shouldn’t be this way! The Board should be leading the way – setting the direction for the organisation, and then keeping hold of the wheel to steer the organisation on course towards a future that reflects its Vision and its Purposes.
So who’s the gatekeeper within your organisation? And how do you prevent your NFP being one of these unfortunate statistics that are getting things the wrong way around?
Good governance systems are essential in supporting an active and well-functioning Board.
We need good policies, good procedures, and good guidelines, all thoroughly documented (and followed!), that spell out how we operate as a Board, and how we separate responsibilities between the governance level of our organisation and the management level within our organisation.
We also need to make sure we have good Board recruitment and succession processes in place, so that we bring in skilled, enthusiastic, and quality Board members, who are committed to actively governing the organisation. And succession planning is equally important for the CEO role too.
We need thorough orientation and induction processes – both for Board members and for CEOs. People need to be given all the relevant information to set them up to succeed in their role. This includes a really clear (and documented) Role Description, that outlines all areas of responsibility, accountability and performance expectations.
(And then people need to ‘stay in their lane’ and not cross over into the realm of another party’s responsibilities).
A good Chair-CEO relationship is also critical to the success of the organisation. This partnership is the lynchpin upon which good communication within the organisation and effective management of the strategic direction hinges. Ongoing and regular communication, to discuss organisational strategy and key issues, is vital to keeping the ship afloat and on course.
And we need to ensure we have good operators in each of these important roles too, so be thorough with your due diligence and think carefully when recruiting to these two key positions.
Board performance reviews are key to maintaining an effective and well-functioning Board, and it is great to see what was previously considered a ‘nice to have’ becoming much more common practice for NFP Boards. These annual reviews, often involving an objective external reviewer, are an excellent way to continuously build the capability of your Board, and identify any areas that are in need of improvement.
So who’s steering YOUR ship?
Do you need to reorient things in your NFP to ensure it is the Board that is leading the way and not the staff?
If this is something you need some help with, I can help you with that!
Get in touch with me on email@example.com or 0421 525 048 to talk about how.
And if you’d like to receive my fortnightly Good Governance E-newsletter, with its regular news, views, information, and events, just let me know.
I hope to hear from you soon!