Caution! Understand the Governance Pendulum Principle

Set a high standard for the board and the board members.

 

by Dan Busby and John Pearson

 

New [board] members haven’t been around long enough
to have been affected (or infected) by the board’s paradigms.
New [members] in their first two years can ask penetrating questions
from perspectives that might be quite different from everyone else’s.[1]

John Pellowe
 

 

Cindi was elected as the second CEO of a ministry, replacing the retiring founder. A few months into her new position, she had made an assessment: several key governance changes were needed.

The board did not have term limits, and many of the board members had served from the beginning of the founder’s tenure. There was no Board Policies Manual. Standing committees abounded. The bylaws sorely needed revision.

So Cindi met with the board chair to discuss her observations and quickly learned there was no openness to contemplate her recommendations. Stunned, she couldn’t grasp why her governance ideas were not worthy of consideration.

Here’s what Cindi failed to understand: governance changes are often inextricably linked to the Governance Pendulum Principle: Opportunities for substantial governance improvement only occur when the governance pendulum oscillates in a positive direction.

In contrast, Ray became the CEO of a ministry that was open to governance changes. The board knew governance improvements were needed. They just lacked the appropriate board leadership and experience to see the changes become reality.

So in the first two years of Ray’s tenure, the board, working closely with the board chair, reviewed and updated the bylaws, revised the board committee structure, and developed their first Board Policies Manual. That resulted in a new and fresh spirit in their board meetings.

The Governance Pendulum Principle is one of the least under­stood governance concepts. To the novice observer, every board has the potential to experience the swing of the governance pendulum at any time. However, solid progress is rarely possible when the pendulum is in a negative or resting position.

Boards must be alert to three pendulum positions—resting, negative, and positive:

  1. The resting position. For many boards, the pendulum is in a resting, equilibrium position. The pendulum has not moved in a long time. And without God’s help, there is no prospect for it to move. When the pendulum is in the resting position, some changes are possible, but the changes are probably minor ones.
  2. The negative position. While positive change rarely occurs during a negative pendulum swing, a negative swing is almost always a precursor to the possibility of positive change. To reverse a negative pendulum swing often requires a new CEO, new board members, and/or a new board chair.
  3. The positive position. When the pendulum finally oscillates in a positive direction, positive changes are possible. But there is a limited time for the board to act because the board pendulum will eventually return to a resting position. Or worse, the pendulum will swing to a negative position.

Here are five significant barriers that prevent a positive swing in the governance pendulum:

  1. Status quo outlook. Any board can develop a nonprogressive attitude. A board can easily become stuck in the status quo. Though new members on the board may bring fresh ideas, it is often difficult to change the status quo culture of the board. Perhaps your board is like the leader who quipped, “The status quo is the only condition the [board] cannot veto.”[2]
  2. Self-appointed progress blockers. Even if a board is generally inclined to move forward with positive governance changes, just one or two negative board members can unfortunately, but effectively, block all progress.
  3. No term limits. A surprising 67 percent of ECFA boards have no term limits, according to ECFA research.[3] Without fresh faces, it is a rare board that is forward-looking in terms of governance. A lack of new members is like being locked in a time warp. Term limits are not a magic potion, but they ensure that board members opposed to progress will eventually exit stage left.
  4. The board is too large. The larger the board, the more difficult it is to move the pendulum. While there is no magic number, boards greater than 15 are often unwieldy.
  5. Believing the board cannot change. One of my neighbors recently installed an Invisible Fence. When my wife and I walk by the house, their very large dog barks loudly, runs, and jumps, but he knows where the underground perimeter is and avoids it.

And so it is with ministry boards. If they believe there is a barrier to change, there will typically be no change.

Here are four elements that will have a major impact on effectively moving the governance pendulum to the positive side:

  1. Identifying the governance changes that should be made. Positive governance changes can occur only in an environment where the potential changes have been identified. A vision for governance improvement is the key to change.
  2. The CEO’s openness to change. It is possible for a board to make substantive governance changes—even if the CEO is not on board with the changes—but it is unlikely to be a congenial process. A CEO who is negative toward the changes will be a drag on positive development.
  3. The board’s openness to change. In our earlier example, Cindi identified needed governance changes. However, the missing element was the board’s openness to change. Without the board’s concurrence with proposed changes, there can be no forward movement.
  4. Sensing when God is telling the board to change. Hearing from the Holy Spirit is the most important element in creating positive changes for boards.

It is only with the help of the Lord—and often the Lord uses fresh faces on the board—that a ministry will begin the important process of governance improvement. God can move mountains, so you can also trust Him to move pendulums!

Seeking God’s will is necessary to reveal His plan. David sought help from the Lord as he fought the Philistine army. The Lord’s response in 2 Samuel 5:24 provided the open door for David: “As soon as you hear the sound of marching in the tops of the poplar trees, move quickly, because that will mean the Lord has gone out in front of you.” He will give that same clarity to your board.

William Barclay reminds us: “We are trying not so much to make God listen to us as to make ourselves listen to Him; we are trying not to persuade God to do what we want, but to find out what He wants us to do.”[4]

 

BOARDROOM LESSON
_______________________________

Be encouraged: God moves mountains and pendulums!
Opportunities to improve a ministry’s governance are
limited to certain situations and fleeting time periods.
Seize the opportunity for change!
 

  Board Action Steps:

  1. Read: The Steward Leader: Transforming People, Organizations and Communities, by R. Scott Rodin, contrasts the stark difference between steward leaders and owner-leaders.[5]

  2. Assess: Conduct an assessment of your board’s governance pendulum.
    Can you point to changes—positive or negative—that the board has made in recent years?

  3. Act: If you sense positive movement in the board pendulum, identify the most important changes that can be made during this window of opportunity.
     

 

Prayer

Lord, we have faith that you will move the governance pendulum.
We need Your help to improve our governance
for the sake of Your ministry. Amen.
 

 

 

 

[1] John Pellowe, Serving as a Board Member: Practical Guidance for Directors of Christian Ministries (Elmira, ON, Canada: Canadian Council of Christian Charities, 2012), 19.

[2] Richard P. Chait, William P. Ryan, and Barbara E. Taylor, Governance as Leadership: Reframing the Work of Nonprofit Boards (Hoboken, NJ: John Wiley & Sons, 2005), 58.

[3] Warren Bird, Unleashing Your Board’s Potential: Comprehensive Report from ECFA’s Nonprofit Governance Survey (Winchester, VA: ECFAPress, 2019), 33.

[4] Quoted in Bob Kelly, Protected! A True Life Story of God’s Word Smuggled Behind the Iron Curtain—and the Influence of a "Tremendous" Man (Boiling Springs, PA: Tremendous Leadership, 2018), 104.

[5] R. Scott Rodin, The Steward Leader: Transforming People, Organizations and Communities (Downers Grove, IL: InterVarsity Press, 2010).

 

From More Lessons From the Nonprofit Boardroom: Effectiveness, Excellence, Elephants!, 2019, 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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