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Deliberating Differently in the Boardroom

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A presentation about how the board might think - and deliberate - differently in the boardroom. Presented at BoardSource BLF.

A presentation about how the board might think - and deliberate - differently in the boardroom. Presented at BoardSource BLF.


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  • If a board were to become an “exceptional” board what might the benefits be?
  • Example: A children’s museum in the east that provides educational services to low income children exemplifies the constructive partnership between a very strong, knowledgeable, open CEO and a very diverse, independent-minded board, both of whom are committed to airing and understanding diverse points of view and investing the time to build consensus. The board composition is extremely diverse, with a mix of social, economic, ethnic backgrounds, gender, and businesspeople and community activists. Board members are deeply committed, putting in long hours to grapple with difficult issues, collaborative. The CEO believes in a strong board, and approaches them with candor, honesty, frankness of conversation. They have an extraordinary partnership as a result. Independent minds work hard at coming to agreement, covering all issues, making sure that all points of view are heard. Provided by Fred Miller Engage and energize their members Expose full range of opinions Make better decisions Own and support their decisions Mutual respect, trust Actively-managed group dynamics Openness to questions, challenges, and differences of opinion Multiple sources of information Members work well with each other Receive and review materials in advance Convene well-organized meetings Focus meetings on fiduciary duties Exceptional Boards = The Source of Power x Responsible Boards
  • These principles come together to creating the Governance as Leadership approach. The three types of governance, all created equal, form a system that can help to realize full value of the board’s collective time and talents. (An alternate graphic here might be a three legged stool to get across the idea that governance isn’t complete or is out of balance if all three governance modes aren’t in operation .)
  • (Note: I got rid of the “Type I”, “Type II” and “Type III” labeling) Fiduciary is the traditional oversight role Focused on protecting and maximizing tangible assets Using these assets to advance the mission Maintaining legal and ethical behavior – duties of care, loyalty, and obedience “this is the bedrock of governance – the fiduciary work intended to ensure that nonprofit organizations are faithful to mission, accountable for performance, and compliant with relevant laws and regulations….If a board fails as fiduciaries, the organization could be irreparably tarnished or even destroyed.” pg 8 The “what” is being accomplished questions… GROUP QUESTION: What are some examples of when you are doing “Fiduciary Work” as a board from past agendas?
  • Examples of good facilitation styles, BUT the emphasis is that these would occur in regular board meetings and not just “retreat-setting”, so leadership needs to have improved facilitation skills and be willing to take some risks Also, more small group breakouts are applicable… “…curb the dysfunctional politeness and ‘groupthink’ that chill generative thinking. Groupthink theory holds that unless one trustee raises doubts, no trustees raise doubts.”
  • Shifts From conformance to performance and from inside to outside the org Not “Are we doing things right?” but “Are we doing the right things?” Mostly “How-to” questions “Without (Strategic), governance would have little power or influence. If the board neglects strategy, the organization could become ineffective or irrelevant.” pg 8 Fuzzy Line in the Sand At the intersection of the nonprofit and for-profit worlds/mindsets – Biz folks may think this way more intuitively than NP staff on the front lines of direct service delivery PLUS, directors selectively assist with implementation (e.g., fundraising, advocacy) – Place where board and staff can/should work together best, where they bring complementary skills and perspectives Glitch Problem has been that NP leaders mistake business planning for strategic planning and treat it as an oversight function Tend to focus on the technical aspects – Is that feasible? Beginning to look at it through competitive lens – Customer focus, comparative advantage, core competency GROUP QUESTION: What are some examples when your board has been in this strategic mode in past board meetings? Or, Declare some future success and ask participants to complete: “this priority would not have been achieved if the board had not ____.”
  • Strategic THINKING not PLANNING (this shift takes care of strategic planning “disillusionment”, moves away from the once every three years, whether we need it or not, episodic event Draws on insight, intuition, and improvisation Mantra of the day is BHAGs (big hairy audacious goals) – BHAGs are hard for CEOs wedded to status quo/biz as usual Takes some distance from the day-to-day routine We have a lot of history with this area recently – To make this leap, form needs to follow function Structures Committees should not mirror org depts/functions but rather strategic imperatives Use ad hoc task forces and advisory councils not standing committees Meetings Restructure to make sure you “put the red meat on the boardroom table” Look at agendas and see if you can correctly deduce the org’s priorities Communication and Information Board members need to ask good questions, not give good answers To do that, they need good information and context– from experts, constituents, etc. in- and outside the org PLUS, directors selectively assist with implementation (e.g., fundraising, advocacy)
  • Definition It’s what comes first – It generates the other important decisions about mission and strategy, problem-solving and decision-making. “Generative thinking is where goal-setting and direction-setting originate.” pg 89 A different “mental map depicts the expressive aspects of organizations, where people are concerned not with productivity or logic alone, but also with values, judgments, and insights.” pg 30 “… generative thinking produces a sense of what knowledge, information, an data mean.” pg 84 Generative Work can be defined as any discussion or activity that intends to make sense of the organization, or any part of the organization, or its internal and external environment Happens sometimes in the boardroom – a board member says, “I don’t understand what this means?” or “Can someone help me make sense out of this?” – but, is too easily dismissed if the majority want to be on the strategic or fiduciary page… Or, in the positive – “When you put it that way, it does make sense. Or “When I look at it that way, I do see things in a different light.” What it is and isn’t? Implicit, rather than explicit. Gets to the heart of values and vision. Thoughtful, rather than technical Framing the problem, rather than finding the solution Making sense of knowledge, information, and data, rather than looking for an answer in them Telling a story, not making a case Get whole board involved early in Generative Work– The opportunity to influence generative work declines as issues are framed and converted into strategic options and plans over time.
  • These are about what is different by overlaying the Generative Work on top of the Fiduciary and Strategic Work…
  • Principles to Emphasize: Time spent doing Generative work cannot be predetermined or budgeted for Note: Starting with Practices and the next slide these are practical ways that a board can re-organize itself around more generative work… Hypothesis – Standing committees are great for performing Fiduciary work, but have limitations with Strategic/Generative because are locked into a fixed paradigm that they are measuring, Task Forces are great at Strategic work but only after being handed the Generative principles or guidelines from a full board discussion, and Boards could use more small group breakouts during the board meeting to do generative thinking…
  • On Composition – need people that bring these types of capital instead of the old position audit (i.e., one banker, one real estate agent, etc.)… On Assessment – emphasize that all three modes need to be assessed for board performance…
  • Barriers to a “Culture of Inquiry” CEO’s perception of the board’s value Format/focus of board materials CEO and Board Chair’s role in meetings Overall board inattentiveness to ideas Lack of engagement Structure of meetings Mental maps “ Group think” Lack of authenticity Bounded awareness
  • Mental Maps
  • Exceptional boards embed learning opportunities into routine governance work and cultivate them outside of the boardroom. Board members, especially new ones, need guidance in governance duties, nonprofit practices and the organization’s field of endeavor. Long-time board members also benefit from a regular exchange of information with fellow board members. These continuing education conversations are important ways to pass on knowledge and to nurture board relationships.
  • MD
  • MD
  • MD This surely will end the workshop on a note of humor!!!
  • Transcript

    • 1. Presented & Facilitated by: Susan Meier V.P. Training and Consulting – BoardSource & Michael G. Daigneault, Esq. Senior Governance Consulting – BoardSource Deliberating Differently: How Can Boards Make Better Decisions?
    • 2. Agenda
      • Context
      • The Problem
      • A Proposed Solution
      • Exercise: Silent Start
      • The Source - Principle 4: Culture of Inquiry
      • Governance As Leadership
      • Exercise: Questions and Trust
      • The Need for Trust
      • Barriers to Creating a Culture of Inquiry
      • Fostering A Culture of Inquiry
      • Points to Ponder & Next Steps…
    • 3.
      • Good
      • Success
      • Stewardship
      • Great
      • Significance
      • Exceptional Leadership
      Context …
    • 4. The Problem …
      • Board conversations are not as robust and effective as they could be
      • Boards appear to be “stuck” in a limiting frame of reference dictating how they should deliberate and decide
      • Both individual board member engagement and collective decision- making suffer as a result
    • 5. A Proposed Solution …
      • Better questions, discussions and genuine debate will help a board move towards having a more meaningful dialogue and making more effective decisions
      • This calls for a more thoughtful focus on how boards think and deliberate
      • This, in turn, reveals the need for fostering an authentic and sustained culture of inquiry at the board level
    • 6. Silent Start …
      • Question :
      • What are the three biggest influencers of decision-making in your boardroom?
    • 7. THE SOURCE 12 Dysfunctional Functional Responsible Exceptional
    • 8. Culture of Inquiry Exceptional boards institutionalize a culture of inquiry, mutual respect, and constructive debate that leads to sound and shared decision making.
      • Seek more information, question assumptions, and challenge conclusions
      • Draw on multiple sources of information and perspectives
      • Ensure all voices heard
      • Advocate for solutions based on analysis
    • 9. Culture of Inquiry …
      • Is there a shared culture of inquiry that leads to better, more informed decisions within your organization?
      • Is there a two-way appreciation of challenging questions?
      • How much real candor is there between the CEO and board members?
      • Between fellow board members?
    • 10. Generative Fiduciary Strategic Governance as Leadership The Governance Triangle Note : A “culture of inquiry” cuts across all three
    • 11. The Fiduciary Mode
      • Board’s core work:
        • Ensure legal compliance
        • Ensure fiscal accountability
        • Conserve organization’s resources, public stewardship for assets of the foundation
        • Evaluate CEO, hold leadership accountable
        • Oversee operations
        • Monitor results
    • 12. Value-added Fiduciary
      • Oversight:
      • Can we afford it?
      • Did we get a clean audit?
      • Is the budget balanced?
      • Is it legal?
      • How much money do we need to raise?
      • Can we secure the gift?
      • Inquiry:
      • What’s the opportunity cost?
      • What can we learn from the audit?
      • Does the budget reflect our priorities & mission?
      • Is it ethical?
      • What’s the cost of raising the money?
      • How will the gift advance our mission?
    • 13. The Strategic Mode
      • Board’s core work:
        • Scan internal & external environments.
        • Review, modify & assist strategic plan/vision.
          • Develop the organization’s resources and asset base.
          • Advocate for the organization, build support within the wider community.
          • Help develop & continuously clarify goals/objectives.
        • Assess strategy performance via needs assessment, critical success factors, benchmarks, and competitive position.
    • 14. Value-Added Strategic
      • Business model viable?
      • Great place to work?
      • Victim of our virtues?
      • New markets? Competition?
      • What could be? (BHAGs)
      • Make new rules?
      • Do we understand the past?
      • Nontraditional competitors?
      • Donor value propositions?
      • Every meeting?
      • Money, space, personnel?
      • Compensation plan?
      • Build on strengths?
      • Size of market?
      • What is? (Extrapolation)
      • Valid assumptions?
      • Can we see the future?
      • Traditional competitors?
      • Internal preferences?
      • Every 3 years?
      Thinking Planning
    • 15. The Generative Mode
      • The Board’s Core Work:
      • Sees current challenges in new light.
      • Perceives and frames “better” problems and opportunities. Asks key questions!
      • Acknowledges organizations are not always logical or linear.
      • Discovers strategies, priorities, & “realities.”
      • Suspends the rules of logic to tap intuition and intellectual playfulness.
      • Encourages robust discourse not quick consensus.
    • 16. What’s Different?
      • Different Diagnosis: Limited purpose leads to limited performance.
      • Different Mindset: Governance is tantamount to leadership.
      • Different Definition of Leadership: Leaders enable orgs to confront and move forward on complex, value-laden problems that defy a “right” answer or “perfect” solution.
    • 17.
      • Different Way of Thinking: Playful and inventive as well as logical and linear.
      • Different Notion of Work: Board frames adaptive problems as well as prescribes technical solutions.
      • Different Questions: Catalytic & value-based.
      • Different Practices: More retreat-like meetings, more smaller group teams, more technical work off-line, more board activity at the boundaries, different performance metrics.
      What’s Different?
    • 18. What’s Different?
      • Composition: Need board members’ Intellectual, Reputation, Political, Social Working Capital
      • Assessment: Directors and executives reflect on their ability to effectively do generative work together.
        • How do our recent and past agendas compare?
        • Where/when did directors work at the boundaries?
        • How often has the board spotted generative opportunities?
        • Is there a climate for robust discussions?
    • 19. Exercise:
      • Question :
      • How can a nonprofit foster the asking of better questions – and a higher level of mutual trust – among its volunteer and staff leaders?
    • 20. Questions…
      • That group dynamics are critical to success.
      • The key is to foster a robust and genuinely participative exchange.
      • Vital questions (fiduciary, strategic or generative) are not a burden – they’re a gift!
      • A culture that invites great questions must be rooted in genuine trust.
    • 21. Trust – The Concept
      • A Contemporary Definition:
      • “ Trust is one party’s willingness to be vulnerable to another party based on the confidence that the other party is (a) benevolent , (b) reliable , (c) competent , (d) honest , and (e) open .”
      • -- M. Moran, Trust Matters
    • 22. Trust – The Concept
      • Vulnerability - Trust matters most in situations of interdependence, in which the interest of one party cannot be achieved without reliance upon another.
      • Benevolence - We lay the groundwork for trust when we have another person’s best interests at heart. People trust us when they believe that we care about their well-being and will not harm their interests.
      -- M. Moran, Trust Matters (2004)
    • 23. Trust – The Concept
      • Honesty - This is probably the most common and fundamental of understandings when it comes to trust. We trust people who tell the truth.
      • Openness - Many people miss this facet of trust, but it’s a critical ingredient. We trust people who share appropriate levels of information, influence, and control.
      -- M. Moran, Trust Matters (2004)
    • 24. Trust – The Concept
      • Reliability - It’s not enough to be trustworthy some of the time. We trust people who consistently talk the talk and walk the walk.
      • Competence - This is an integral part of what it takes to build trust. If we don’t have the knowledge, skills, network, energy, and strength to do what the job requires, no one is going to believe we can be successful.
      -- M. Moran, Trust Matters (2004)
    • 25. Exercise:
      • Question :
      • What barriers or hurdles does your board face in developing a genuine “culture of inquiry”?
    • 26. Structure of Meetings
      • As most of the board’s governance functions are fulfilled in meetings, it is imperative that they be designed to be productive, engaging and focus on substantive issues.
        • Consent Agenda
        • Meeting Themes
        • Calendar of Meetings
        • Retreats
        • Pre-Reading/Reports
        • Expert Guests
    • 27. Select data Interpret data Reach conclusions Mental Maps Pool of all possible data Take action Mental Map / Deeply Held Belief
    • 28. Dangers of “Group Think”
      • Janis’ seven symptoms:
      • Incomplete survey of alternatives
      • Incomplete survey of objectives
      • Failure to examine risks of preferred choice
      • Failure to re-appraise initially rejected alternatives
      • Poor information search
      • Selective bias in processing information at hand
      • Failure to work out contingency plans
      • Irving Janis, defined “group think” as:
        • “ A mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members’ striving for unanimity override their motivation to realistically appraise alternative courses of action.”
    • 29. Authenticity
      • Authenticity means that you act and speak with truthfulness or candor. You put into words what you are genuinely experiencing, thinking or questioning.
      • This may be the most powerful thing you can do to build real trust and commitment with others over time.
      Source: Flawless Consulting
    • 30. Bounded Awareness
      • Failure to see information
      • Failure to seek information
      • Failure to use information
      • Failure to share information
      A phenomenon that occurs “when cognitive blinders prevent a person from seeing, seeking, using, or sharing highly relevant, easily accessible, and readily perceivable information during the decision-making process.”
    • 31. Fostering a Culture of Inquiry
      • Questions are welcomed
      • Differing viewpoints are encouraged
      • Unwritten rules are explained
      • Timely information exchanges
      • Open communication
      • Actively seek different viewpoints
      • Tolerate ambiguity
      • Brainstorm silently and openly
      • Consult outsiders
      • Search widely for information
    • 32. Points to Ponder
      • Is there a shared culture of inquiry that leads to better, more informed decisions within your organization?
      • Does the board enlist information from outside sources, such as articles, research, reports, or feedback from external experts or stakeholders?
      • Are different formats used for board meetings, such as small group discussions, facilitated sessions, or outside speakers, to help the board address important issues?
      • Is there a two-way appreciation of challenging questions?
      • How much real candor is there between the CEO and board members?
    • 33. Next Steps? 10 Steps to Intentional Board Practice
      • Actively foster an intentional dialogue about governance in your organization.
      • Conduct a “Board or Governance Assessment.”
      • Think in new ways (and ask good questions) by deliberating differently.
      • Establish or update your organization’s values statement.
      • Create a “Governance Committee” and charge it with improving governance throughout your organization.
    • 34.
      • Make sure board members know their responsibilities: legal, governance, regulatory & financial.
      • Evaluate CEO and board leadership annually.
      • Empower you Board Secretary to improve governance.
      • Provide constant education concerning governance issues and trends (much is changing!)
      • When in doubt, in crisis or in transition – seek governance expertise, counsel or training.
      Next Steps? 10 Steps To Intentional Board Practice
    • 35. It was great… Thanks! Thank you… Let us know how BoardSource can help you! BoardSource 1828 L Street, N.W. Suite 900 Washington, DC 20036 Phone: 202-452-6262 Fax: 202-452-6299 www.boardsource.org

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