New Thinking on Unlocking Board Expertise
In meetings across the country, fellow CEOs have regularly joined me in lamenting the phenomenon of foundation board members, tapped for service as top corporate executives, checking their business acumen at the door of the quarterly board meeting. The meeting starts and finishes without a meaningful business strategy or execution idea being offered, quarter in and quarter out.
Many colleagues agreed with my hypothesis that, because the language and practices of the nonprofit world are specialized and there is a studied avoidance of using every day business terms and concepts in nonprofit management, for profit executives find the discussions and proceedings at board meetings so foreign that they are unable to contribute business strategy ideas.
New research on how board dynamics inhibit members from sharing information and speaking up from Katharina Pick, post-doctoral fellow of business administration, as published in Harvard Business Review, July-August 2008 (Boardroom Communications: Can You Here Me Now? - unfortunately not available on-line), sheds light on a few other potential impediments to board member communication:
First, although a board meeting is commonly seen as a meeting of one group, in reality it involves two groups: directors and managers. The directors I observed spent only about 15% of their in-meeting interaction time communicating with one another and the rest in exchanges with managers. Thus their ways of communicating and learning other directors' viewpoints were indirect and often quite subtle.
Second, directors play a difficult dual role: They are both cops and advisers, monitoring management's behavior and ensuring compliance while also counseling and directing management on strategy. They must tread carefully as they move between the two functions and must cooperate with one another in doing so. Because any director's contribution could be seen by others as stepping too far into one role, this cop-advisor dynamic makes open communication strained. I observed directors subtly criticizing one another for comments that threatened the balance between roles, or even failing to speak up in order to avoid conflict.
These two impediments often led directors to hold substantive conversations outside board meetings, where open discussion felt easier, safer, and more efficient. Though sometimes productive, these off-line conversations also bore important risks. They left some directors out of the loop and turned others into nexuses of information, which distorted communication. In some cases they replaced directors' in-meeting interactions altogether, with the result that management never got to hear directors discuss anything at all.
The goal of increasing the amount of director-to-director interaction in board meetings well above 15% is crucial if you've got great business thinkers and doers on your board. I agree with Pick's recommendation that executive sessions (without management present) can help build cohesion and potentially translate into better communication during full board meetings.
A few years ago my flight was delayed for a night and half of the next day of a board retreat that I was hosting as CEO. By the time I arrived, board members had had significant time to talk about everything on their minds. My sense is that they even worked through a number of questions representing both the "cop" and the "advisor" roles throughout the day. All I know for sure is that, when we got started, they were primed like never before for the strategy discussion our management team had prepared.
In my eight years operating in the sector, however, I've been dismayed to see that requests for executive sessions, whether driven by directors or by management, and even on my own board, are widely perceived as a slight on management and, therefore, generally avoided other than the obligatory annual compensation discussion.
I hope our readers will share their own experiences and theories about this and about unlocking the business expertise of board members toward better board impact.