Introductory phrases such as “in our case….” or “given our board’s history…” or “in light of the expertise and dedication on our board…or “the culture of our organization prevents….” increasingly invade discussions of governance, accountability, transparency, and ethics (what I call “GATE”). For example, some boards consider that because they rarely have conflicts of interest, a meticulous conflicts procedure may not be necessary. Others believe that the board Chair is so competent that he or she should have a more extensive role in governance decisions (committee structure and assignments, succession planning, CEO evaluation and remuneration analysis….) than GATE suggests – a sort of efficiently benevolent and competent dictatorship. Other boards rule out certain GATE policies or mechanisms as inconsistent with the organization’s “culture”.
In fact, a focus on the organization’s specific situation and/or directors (collectively or individually) should not be the starting point when analysing GATE. Rather, it should be the ending point: once first in class GATE has been analysed and implemented, tweaking to fit the organization can happen without sacrificing standards.
First and foremost, GATE isn’t personal – to specific individuals or the specific organization. Good GATE is quite the opposite. Good GATE allows organizations to operate within first in class parameters and to ensure all stakeholders – donors, beneficiaries, employees, volunteers, outside vendors, regulators, and the public – first in class quality of organization irrespective of the individuals governing or the organizational characteristics. GATE offers a neutral structure – not finger-pointing or excuse-making. This does not mean that additional or modifications to best practice aren’t necessary or appropriate. It means organizations should start at with top GATE standards and adjust upward. Don’t adjust downward from anywhere.
Second, GATE isn’t a historical exercise. GATE isn’t about a backward-looking analysis based on the past. It’s about looking forward with prudent risk management: this blog’s central theme of 20/20 foresight: what do you want to be able to say you did if a problem should occur or even if the media or other stakeholders misstate a situation? People, organizations, the environment, and best practice all change, so the past is not an effective basis for reflection about the future. This is particularly true in an era where even the present is difficult to decipher. Myriad factors from the economic situation to social media make keeping the eye on the road ahead essential. Good GATE should above all keep in focus the need to manage uncertainty (see the blog of « The only certainty is uncertainty »). This does not mean that past lessons should be ignored, but rather that they are not enough.
Third, GATE flies at a higher altitude than organizational culture. Culture cannot be an excuse for poor governance. For example, in France, the democratic associative structure of non-profit organizations (with members of the association electing the board of directors as opposed to a self-perpetuating board seen in most US and UK organizations) sometimes becomes an excuse for weak governance. Rather than identifying necessary profiles of board expertise, members vote for representatives they are comfortable with who won’t challenge the status quo. In the US, sometimes culture takes the letter of governance too far by interpreting technical compliance as adequate and an excuse for failing to address the spirit of the governance practices. Technical compliance and/or excess are not necessarily good governance either. Culture and good governance can, and indeed must, cohabitate. Put differently, I don’t know of any organizational cultures I’d like to be a part of that believe that boards shouldn’t insist on first in class GATE irrespective of the organization’s situation or the individuals governing.
Fourth, GATE requires depersonalizing the leaders. Very few boards focus sufficiently on CEO and Chair succession planning, including what would happen if for any reason the CEO or Chair had to step down suddenly and unexpectedly. Again, this question is about the fact that organizations need leaders, and as a general matters leaders can have unexpected issues – not about the individuals or even the organization in question. Training and mentoring internal candidates, as well as identifying external candidates potentially of interest, is important. A succession planning process for the board Chair would most likely involve a committee of independent board members that does not include the outgoing Chair or potential candidates.
Fifth, GATE need not be cumbersome. Quite the contrary. There is great efficiency in making the initial investment, and then subsequent efforts to verify and update, such that GATE is clear at all levels and for all individuals all the time. I rarely draft a governance policy that exceeds a page or two other than a code of ethics that may reach three or four. Many are one-page bullet point lists.
So depersonalize GATE.
As always, questions and comments are welcome.
Copyright© 2012 Susan Liautaud. All rights reserved