Apply for a Staff Position and You Can Deal with That Issue

Help board members not to cross the line into operational details.

 

by Dan Busby and John Pearson

 

Execution is where management starts
and the board stops.[1]

Ram Charan, Dennis Carey, and Michael Useem

 

In nearly every board meeting, one board member will want to drill into the minutiae.

John, a CPA, asked that a detailed analysis of the CEO’s travel and entertainment account be provided to the board at each of its monthly meetings. Mind you, the board already had a well-observed policy, which required that the CEO’s travel and entertainment expenses be approved by an independent board member (one not related to the CEO and who is not on the staff).

Rachelle, a human relations professional, asked to review all of the personnel files. She said she wanted to be sure all of the documentation was up-to-date. Never mind that the organization had a qualified staff member who handled all human resource matters. And, never mind that Rachelle would inappropriately gain access to very sensitive personnel information.

Alicia, an information technology (IT) consultant, wanted a monthly report on measures the ministry was taking to avoid security breaches. Never mind that the organization annually engaged an outside firm to conduct an IT assessment, and that the organization followed all of the recommendations from the assessment.

Finally (and to no surprise!), David, the ministry’s CEO, reached his limit. When one more board member drilled deeply into operational details with probing questions, David said kindly yet very directly, “Apply for a staff position, and you can deal with that issue.”

David had learned that some questions are meant to be answered; other questions are simply meant to be admired.

David’s board chair could have and should have been his protector, shielding him from the intrusions by board members into areas of David’s responsibilities. Technically, a board member has the right to ask any question in the book. Practically speaking, however, a steady habit of board members veering across the line into operational matters will likely drive any CEO right over the edge.

Board members wallow in operational details far too often. With sophisticated boards, dipping a toe into operations may only happen occasionally. With less accomplished boards, it happens all the time.

At least three things happen when board meeting discussions regularly detour into operations:

  • Decision-making boundaries are crossed. When the board veers into operational discussions, a bright line has been crossed by addressing topics that should be reserved for the CEO. A precedent may be set for future inappropriate board action.
  • Value is squandered. When a board member meddles in operational details, the board’s collective value is wasted. Consider the hourly rate of each of the board members. Then multiply the combined hourly rate by the time wasted in board meetings when the discussion veers away from policy and other critical issues. The loss of value can be astounding.
  • Frustration results. When the board travels down the operational highway, some members of the board may be frustrated, but the CEO will be very frustrated. This creates such operational dizziness some CEOs will ask for a time-out to address this out-of-control journey. Other CEOs will simply bite their tongue.

So how can a board avoid the operational meddling disease? Discernment is key, and there are at least three possible solutions:

  • Solution No. 1: Start with a strong philosophy of governance, documented in your Board Policies Manual, defined in board orientation materials, and reinforced with governance refresher training.
  • Solution No. 2: Empower the board chair to address operational overreach. This can be positioned two ways:
    • Setting the agenda. If the agenda avoids operational areas, the proper tone will be set for board discussions.
    • Monitoring board discussions. It is during the actual board meetings, of course, when board members face the greatest temptation to delve into operational matters. The board chair or perhaps the governance committee chair must monitor board discussions.
  • Solution No. 3: Inspire board members to speak up when the board veers into operational matters. It is up to each board member to be spiritually discerning and highly sensitive about which topics they comment on during board meetings. Any board member can alert the chair to the possibility that the board has crossed into operations.

It’s as simple as this: a board member can address the board chair and say, “It seems to me that we have just crossed the line into an operational topic, and we should respect the right of our CEO to handle such issues.”

World Vision U.S. CEO Rich Stearns embraces the acronym NIFO—“Noses in, Fingers Out”— which he calls shorthand for keeping board members operating at a policy level. Stearns goes on to say, “If noses and fingers don’t do the trick, I rely on the collective wisdom of the board. In response to a questionable suggestion from a member, I’ll say, ‘Let’s share this with the other directors. If they agree that the idea has merit, we’ll put it to a vote to make it policy.’ Not surprisingly, that’s often as far as the matter goes.”[2]

There are few issues that will cause more friction between the board and the CEO than the board delving into operational issues. When boards ignore this important issue, they do so at their own peril.

 

BOARDROOM LESSON
_______________________________

Sound governance requires that all board members
understand and apply the principle of exiting
the operational highway and trusting such matters
to the CEO.

  Board Action Steps:

  1. Inquire: Review the discussions and actions of the last few board meetings to determine if the board ever crossed the line into operational matters.
  2. Identify: If the board migrated into operational areas, identify the reasons why this happened. Are agendas properly designed? Or are certain board members consistently the guilty parties?
  3. Inspire: Commit to keeping board discussions and decisions at a high level.

 

Prayer

Lord, help us bless our CEO by staying
on the governance highway and not veering
into the operational ditch. Amen.

 

 

 

[1]Ram Charan, Dennis Carey, and Michael Useem, Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way (Boston: Harvard Business Review Press, 2014), 62.

[2] Rich Stearns, “Apply for a Staff Position and You Can Deal With That Issue!” Lessons From the Nonprofit Boardroom (blog), April 4, 2018, http://nonprofitboardroom.blogspot.com/2018/04/lesson-20-apply-for-staff-position-and.html.
 

From Lessons From the Nonprfit Boardroom: 40 Insights for Better Board Meetings, 2018, www.ECFA.org/KnowledgeCenter.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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