Monday, March 7, 2011

How to Tell if You Have a Bad Board

I think I've mentioned before that one of the things I like to do on Hourglass is look at policies and practices in the for-profit world and see how they compare or can be applied to associations. My work on the WSAE Innovation Task Force came almost entirely from this mindset. As the Executive Director of a professional trade association, whose Board members are a group of very successful business people, I'm frankly fascinated by the interplay between for-profit and non-profit sensibilities. In my experience, the fresh thinking it inspires works best when it flows in both directions.

But as Shelly Alcorn recently reminded me, the for-profit model is not always the best template for association activities. Here's a case in point. Another HBR blog post from Roger Martin, this one focused on six ways to tell if you have a bad board. Written from a decidedly for-profit and publicly-traded perspective, Martin includes such tell-tale signs as:

1) They complain about how hard Sarbanes-Oxley has made it to be a director.
2) They complain about how the fees for being a director aren't high enough to compensate for the onerous work involved.
3) They are paid in the top tertile of peer boards.
4) They express excessive pride over being on the board.
5) They express enthusiasm for the enjoyable social atmosphere on the board.
6) They express enthusiasm for the personal growth opportunities the board provides them.

If you ask me, these are either not problems for most associations (#1, 2, 3) or may actually be good things in our environment (#4, 5, 6). Seriously, a desire for personal growth is a good thing in an association Board member, isn't it?

But this analysis begs the obvious question. What are the signs of a bad association Board? If we were to take a poll of association executives, we'd probably see things like:

1) They don't show up for board meetings.
2) They show up for board meetings completely unprepared.
3) They don't disclose their conflicts of interest and use their board positions to financially enrich themselves.
4) They micromanage staff activity.
5) Individuals publicly disagree with decisions of the board.
6) There's more than 20 of them.

When you compare those two lists, you see how far apart the for-profit and non-profit worlds sometimes are.

Photo by fpra


Jeff De Cagna said...

The six attributes you've identified better describe a dysfunctional board. I propose that a "bad board" suffers from different shortcomings:

1) The board doesn't understand or accept its responsibility for stewardship.

2) The board doesn't understand the strengths and weaknesses of the association's business model.

3) The board is closed off to new thinking and doesn't engage the rest of the association in the work of stewardship.

4) The board doesn't create spaces for the expression of meaningful dissent.

5) The board values the past more than the future.

6) The board thinks and acts as if its members are the most important stakeholders in the association.

Association boards would be much better off if there were less focus on the personal benefits of service (such as those described in Roger Martin's #4, #5 and #6 above), and more emphasis on the critical responsibilities of governing. Moreover, smaller boards can be just as bad as larger boards if they manifest the attributes I've listed above.

In thinking about how to change the work of governing for the better, we should not focus on the tax status of the organizations involved, but on shifting the mindsets of those who serve before the problems become acute, intractable and plainly visible to all.

Eric Lanke said...

Thanks for the comment, Jeff. Your list of shortcomings is great, as it also describes unfortunate attributes of many association boards. I guess one point I was trying to make is that the problems that plague association boards are in a different league than those that plague for-profit ones. In my mind, your list underscores that point as well.

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