Remarks by Susan V. Berresford at the Board Source Leadership Forum
San Francisco, CA. October 12, 2007
Thank you for inviting me to Board Source and your leadership forum. I am glad to be here because the concern of Board Source, proper nonprofit governance, is of utmost importance, especially since nonprofit organizations are growing in importance around the globe. Third sector governance is an area in which we have seen many new developments in recent years — the emergence of new laws, rules, voluntary standards, and higher and higher expectations.
Many of these advances are helpful, but part is probably overkill, so we can expect a shake-out period. This time will enable us to sort through what is simply mechanical and time wasting, and what gets to the heart of accountability and transparency. Board Source will very likely be at the center of these discussions.
But laws, rules and standards are not the whole story. There is an important area beyond these aspects of accountability and transparency. That is the matter of ultimate effectiveness.
At the end of the day, human behavior is a powerful variable in effectiveness and good governance. In other words, beyond the importance of playing by the rules, the question is HOW you play by the rules. Doing it the right way can positively influence organizational effectiveness. Since I am now near retirement, I decided to use my time today to offer thoughts I have developed over the years about the "how" — the behavioral qualities of good board members. I come to these ideas from various angles.
I have been a founding board member of several organizations, a very junior observer of the Ford Foundation board decades ago and then a full member beginning when I first served as its president 12 years ago. I have been on large and tiny, for-profit and nonprofit, prestigious and obscure boards. I have been a board member as well as board chair. And I have talked about board governance with a good number of our sector’s regulators. These experiences shaped the ideas I want to offer today.
Clearly there are some behavioral basics of good board service. They include regular meeting attendance, responsiveness to the organization’s requests, mastering how the organization works, how it is financed, and what its challenges are. Success in these matters rests on both the board and staff members’ level of effort and candor.
We have seen vivid examples of failure to follow the basic rules: board members being blind to what is really going on, self-interest trumping the duty of loyalty, and time wasting. So the basics are not yet common practice, which is one reason why Board Source is so important.
But even when the behavioral basics are mastered, the huge grey area of board member behavior also needs attention. I will explore this in a series of 6 principles I have come to believe are important.
#1. Good board chairs consider themselves a partner of the CEO. Executive leadership of an organization is often challenging and lonely. It requires 24/7 readiness, and creativity. The CEO needs and should have a colleague in the board chair — someone in addition to the top management team with whom to kibitz, try out ideas, talk about the worst and best case scenarios without risk.
Candor and comfort in these relationships will spring from a sense that the chair and CEO are partners, not in a rigid hierarchy. Obviously, there is a hierarchy. The board chair has ultimate responsibility, but that does not have to frame the relationship, assuming the organization is functioning pretty well. In fact, this point illustrates another I would note. I believe that the board chair must always make one fundamental decision — does he or she have confidence in the CEO. If the answer is yes, then the chair’s job is to assist the CEO fully. If the answer is no, then a new CEO is needed; plain and simple.
In contrast, some presidential colleagues in foundations and other nonprofits told me that they had relationships unlike what I enjoyed. They often talked about the time they spent trying to manage the chair, respond to issues the chair raised that were not core concerns of the organization, and for some, simple respectful exchanges were rare. The sad result was a lot of energy being put into "high maintenance" personalities rather than the organization’s mission.
#2. Good board members are good listeners. They are interested in hearing others’ views and ultimately in building consensus. They refrain from dominating board discussions. Many now agree that diversity of board members’ backgrounds and experience enhances board decision-making. People come at issues from different perspectives and that helps ensure that decisions are sound at multiple levels. But diversity often requires patience. Board members need to take time to listen carefully to others’ views, try to understand why someone may have a different perspective, and then work toward a decision.
In the many boards I have watched and hear about, a few board members always jump in at the start with a settled view, usually stated with utter certainty or at great length. Sometimes these board members’ aggressive style or forcefulness silences others who have different views, thus cutting off healthy debate. Good board chairs avoid these patterns themselves and they remain alert to others, speaking to those who seem disinterested in colleagues’ views. They try to prevent colleagues from undermining legitimate and valuable exchange.
#3. Good board members understand the balance between giving the CEO ample room to manage with independence and ensuring that ethical standards are met. Creative leaders don’t want to be second guessed all the time. Micromanagement by a board will drive away any self-respecting and creative CEO. Life is simply too short and organizational leadership too challenging for the CEO to spend enormous amounts of board time explaining and justifying routine matters.
But we have seen far too many examples of very able and respected board members checking their common sense at the board room door. We see high profile board members approving or winking at organizational practices that most people would find unacceptable — for example, lavish spending by the CEO, operational costs out of proportion to benefits rendered, and even self-dealing. Sometimes this failing seems to spring from assumptions that the organization is "special" or the CEO plays a very unique role and is, therefore, immune from normal standards. It is as if the trustees believe that the organization exists in a special category or bubble, with its own rules.
It is important for board members to challenge any such suggestions, and to apply common sense when they see possible ethics problems. Nonprofits exist for community benefit and their actions have to somehow square with the expectations of reasonable people.
Another complex balance point between chair and CEO roles can be seen when board members bring creative ideas to the deliberations, thinking the organization might have become complacent or not yet see an opportunity or risk. This is a very valuable role for board members. It draws on their wider perspectives and can help the CEO look beyond his or her immediate horizon. But this should not be confused with trustees who insert their own agendas and dictate a course of action related to it. That may not be formal self dealing, but it is self centered and counter to the interest of the organization for which board members have a duty of loyalty.
#4. Good trustees ask "naïve" questions that others want to ask but may shy away from. In boards I have watched or been part of, board members may not know the jargon in the field, may be unfamiliar with organizational history or technical matters. When they are being briefed by staff members who fail to give adequate background or basic facts, trustees can be reluctant to ask about these basics for fear of looking unsophisticated or uninformed. I have had board members say to me, "I really admire X (another board member) because she always asks what I am thinking but am too shy about." Others say "I don’t want to be the one who slows things down."
I say: "three cheers for the naïve questioners." But they should not be confused with trustees who ask about the basics because they have not read or mastered material given to them. That practice reflects laziness or disinterest, neither of which fit with good board service.
Good trustees ask naïve questions because they have faith in their own common sense and instincts. If after reading and being briefed things are still unclear, they press a bit, or ask for more, saying they really don’t grasp the matter being discussed. Several trustees I know stand out in this way and they have my admiration for their candor, self-confidence, and seriousness. By example, they make space for others to follow suit.
#5. Good board members are ambassadors for their organizations and understand the responsibility that comes with that role. Trustees have multiple opportunities to talk with friends and people they meet about what they like in the organization for which they have stewardship responsibility. They can select what particularly interests them, become knowledgeable about it, and promote it. In doing so, they help convey ideas about effectiveness and significance. Given their responsibilities of stewardship, this is all important. They are advocates and fans generating good will for the organization and the work in its field. Board members can do this on their own and CEOs can also ask board members to take on outreach assignments.
But I am sure we also all know about a few situations in which board members unwisely disclose to others internal operating challenges or problems the organization is working on. This information can become gossip and be repeated over and over, in less and less accurate form. Gossip about the organization’s challenges can severely undermine its effectiveness. In the end, the organization has to put out a fire in public that might have been resolved more effectively in private.
I have heard wise board members reply to inquiries about sensitive matters simply by saying "The board/or the CEO is handling this and it will soon be resolved" or some such clear statement that conveys awareness and action.
#6. The final point I want to make is about energy and interest. Good board members are energetic in learning about and helping the organization. They take genuine pleasure in board responsibilities. Their fresh insights and their enthusiasm inspire and renew the senior staff’s energy and determination.
But we have all encountered board members who one CEO recently described to me as "tired and cranky." They have been around for years and have somehow lost the desire to engage deeply with the organization. They may like being linked to the organization but they don’t read the board materials, they don’t listen carefully, and they cut short the time they give to board meetings.
Getting tired or bored is normal. We all know the phrase "Been there; done that." It is not surprising or troubling that it happens to trustees. We are all human. But if most other board members seem appreciative and engaged, the "tired and cranky" one probably ought to rethink his or her relation to the organization. Board chairs can help this process along by exploring what is really going on. Is it a failing of the staff or board process, or has the board member simply lost the level of interest that good board service requires? If the latter, the cure is clear.
So, those are a few reflections that I would offer on the grey zone of board member behavior. I hope they are useful, and they obviously need to be adapted to each organization’s unique culture and history. I would summarize them as follows:
Board members of healthy organizations are especially valuable when they are:
- Partners
- Listeners
- Consensus builders
- Ethical watchdogs
- Naïve questioners
- Discreet ambassadors
- And energetically and enthusiastically engaged.
Board Source fosters the best in boards, on the basics and on these more subtle measures. Our sector is all the stronger for that work. Thank you.
The Ford Foundation is an independent, nonprofit grant-making organization. For more than half a century it has been a resource for innovative people and institutions worldwide, guided by its goals of strengthening democratic values, reducing poverty and injustice, promoting international cooperation and advancing human achievement. With headquarters in New York, the foundation has offices in Africa, the Middle East, Asia, Latin America, and Russia.