Creating Excellence in Board Leadership

Thursday, February 18, 2010

Protecting the Organization

In previous blog posts clarity has been given regarding the board’s role – boards are saddled with the fiduciary duty of governing their organization. They maintain a moral, legal, and financial accountability for the organizations they lead. That translates into a laundry list of issues and activities – e.g. personnel, compensation, accounting, risk management, communications, facilities, investments, record keeping, reporting, and staff methods. That said; the board holds control over those items and must protect the organization regarding each. However, in reality, it is impossible for the board to keep up with all those issues.

Facing this conundrum, how can the board realistically fulfill its fiduciary role and protect the organization? The board has two options:
  1. It can choose to meet more often in an attempt to review all the issues listed above and prescribe the strategic means for handling each. Additionally, it can peruse, refine, tweak and then approve all management means brought to them.
  2. It can ensure that all activities and actions regarding the issues listed above are prudent by deciding in advance exactly what functional and operational means are unacceptable. Any staff decision, activity, or action that doesn’t violate board specification is routinely approved, then, implemented and doesn’t require the board to meet.

The latter of these two options is by far the better. It demonstrates true board leadership and provides protection for the organization, even when the board is not in session. In progressive, advancing organizations boards cannot meet often enough to stay abreast of all the issues and prescribe meaningful strategic means for handling each one. However, boards can govern those strategic means by setting limitations (functional and operational activities, decisions or means that are unacceptable), boundaries or general constraints for staff. Once identified, those limitations should be placed in writing and given to staff.

This proactive protection also serves as empowerment for staff. Any means chosen by staff, if they fit inside the boundaries provided by the board, are automatically approved. Staff doesn’t have to wait for the board to meet and grant permission to implement. As long as staff is compliant to board-stated constraints they should consistently feel board support in the context of empowerment.

Logicboard offers an innovative and highly successful model for board leadership and governance. It brings detail and coaching to the items listed above. Contact us today for more information.

PO Box 5010 Bloomington, IL 61702
Phone:309-275-9734 or 309-287-0834