The Practitioner's Guide to Governance as Leadership

Building High-Performing Nonprofit Boards

Cathy A. Trower

• Publisher: Jossey-Bass
• Year: 2012
• Print ISBN: 9781118109878
• eBook ISBN: 9781118237366
• Edition: 1
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

THE PRACTITIONER'S GUIDE TO GOVERNANCE AS LEADERSHIP

The Practitioner's Guide to Governance as Leadership offers a resource that shows how to achieve excellence and peak performance in the boardroom by putting into practice the groundbreaking model that was introduced in the book, Governance as Leadership. This proven model of effective governance explores how to attain proficiency in three governance modes or mindsets: fiduciary, strategic, and generative.

Throughout the book, author Cathy Trower offers an understanding of the Governance as Leadership model through a wealth of illustrative examples of high-performing nonprofit boards. She explores the challenges of implementing governance as leadership and suggests ideas for getting started and overcoming barriers to progress. In addition, Trower provides practical guidance for optimizing the practices that will improve organizational performance including: flow (high skill and high purpose), discernment, deliberation, divergent thinking, insight, meaningfulness, consequence to the organization, and integrity. In short, the book is a combination of sophisticated thinking, instructive vignettes, illustrative documents, and practical recommendations.

The book includes concrete strategies that can help improve critical thinking in the boardroom, a board's overall performance as a team, as well as information for creating a strong governance culture and understanding what is required of an effective CEO and a chairperson. To determine a board's fitness and help the members move forward, the book contains three types of assessments: board members evaluate each other; individual board member assessments; and an overall team assessment.

This practitioner's guide is written for nonprofit board members, chief executives, senior staff members, and anyone who wants to reflect on governance, discern how to govern better, and achieve higher performance in the process.

CHAPTER 1

THE GOVERNANCE AS LEADERSHIP MODEL

Discovery consists of seeing what everybody else has seen and thinking what nobody else has thought.

—Albert Szent-Györgi, 1937 Nobel Prize for Medicine

The influential work Governance as Leadership (Chait, Ryan, and Taylor 2005) broke new ground by linking two concepts that previously had not been joined—governance and leadership—noting that there really was “one river, not two streams.” The authors stated that “governance and leadership are closely related, and the more clearly this linkage is seen, the brighter the prospects will be for better nonprofit governance” (xix).

PREMISES

Four basic premises underlie the views advanced in Governance as Leadership (Chait, Ryan, and Taylor 2005):

• First, nonprofit managers have become leaders. The days of the naïve nonprofit executive director leading a sleepy organization fueled by a few passionate “do-gooders” are long over, as stakeholders expect greater sophistication and leadership on the part of CEOs and their staff members.
• Second, board members are acting more like managers. Although board members are often admonished not to micromanage, many nonprofit board committee structures essentially invite board members into the senior staff’s domains. This occurs because the board structure tends to mirror that of the organization—for example, both will have committees in finance, government relations, development, and marketing—and nonprofits populate their boards and committees with professional experts in those same fields. “Constructed and organized in this way, boards are predisposed, if not predestined, to attend to the routine, technical work that managers-turned-leaders [premise one] have attempted to shed or limit” (4).
• Third, there are three modes of governance, all created equal. The authors recast governance from a “fixed and unidimensional practice to a contingent, multidimensional practice” (5) that includes fiduciary, strategic, and generative work (described in more detail later in this chapter) whereby the board provides oversight, foresight, and insight. Although each mode “emphasizes different aspects of governance and rests on different assumptions about the nature of leadership”, all three are equally important.
• Fourth, three modes are better than one or two. Boards that are adept at operating in all three modes will add the most value to the organizations they govern.

UNDERLYING ASSUMPTIONS

The authors acknowledged at the outset that many board members express frustration with service on nonprofit boards, asking themselves, “Why are we here?” and “What difference do we really make?” No wonder they feel this way, given that many nonprofits have asked very little of board members beyond philanthropy and basic legal and fiduciary oversight. Much of what has been written about the problems facing nonprofit governance has focused on poor performance—either group dysfunction manifested in disorderly discourse, disengagement evidenced by poor attendance and bobble-headed board members who pay more attention to the clock than to what’s on the table, or lack of understanding of board roles and responsibilities because there were no clear job descriptions or lines demarking management and board territory.

Chait, Ryan, and Taylor (2005) noted that a reframing of these issues moves us from problems of performance to problems of purpose; board members are not just confused about their roles, but dissatisfied with them. Why?

• Some official work is highly episodic. Boards meet regularly at prescribed intervals whether or not there is important work to be done; therefore, in order to fill air time, committees and staff members make reports and board members listen dutifully (or snooze). If board members are awake, in an effort to show diligence and attentiveness, they sometimes chime in with a question or two, but those questions are often operational in nature because the material on the table invites little else.
• Some official work is intrinsically unsatisfying. Some governance work is not episodic—that which involves overseeing and monitoring management must be done regularly and is critically important. Boards must, by law, meet duty of loyalty and care requirements to ensure that the organization is operating lawfully and its leaders are meeting standards of minimally acceptable behavior. But board members do not typically join nonprofit boards to “hold the organization to account” (Chait et al. 2005, 19) but instead because they identify with the mission and values of the organization. This disconnect can cause disappointment and disengagement.
• Some important unofficial work is undemanding. Just by meeting, boards create legitimacy for organizations. Further, because boards meet, management must prepare data and reports, which keeps management alert. But such passive roles are hardly motivating for board members.
• Some unofficial work is rewarding but discouraged. Because the rules about what is permissible board work (for example, fundraising, advocacy, and community relations) and what is not (for example, human resource management and program development) are often unstated or unclear, board members sometimes dive in only to be told to back off—that they are in management’s territory.

In summary, “Boards may know what to do, and do it reasonably well, but in the end they are derailed by the meaninglessness of what they do” (Chait et al. 2005, 23).

GOVERNANCE REFORM

Given what has been said thus far, a natural response might be to simply assign a more attractive set of tasks to boards that could inspire new board structures to accomplish those tasks. But this would be risky for three reasons: (1) a revised set of appealing tasks might lead to a happier board but not necessarily to a better-governed organization (the ultimate goal); (2) focusing on tasks, or technical work, tends to encourage microgoverning; and (3) task clarification does not always promote effectiveness (Chait et al. 2005, 24).

We must resist the urge to assume that task and structure are the sum total of governance. We can more easily do this if we shift our thinking from “What is governing?” to “Toward what ends are we governing?” By thinking about the type of organization—for example, how large it is, how established, its complexity, and how varied its stakeholders—we begin to think of different requirements for governance, focus, board membership, and structure. Relating this to the governance modes briefly introduced earlier, “boards set goals in the strategic mode and ensure the organization meets them in the fiduciary mode” (Chait et al. 2005, 30). In the generative mode, we begin to think about the organization as more than simply productive or logical but also expressive by considering values, judgments, and insights. “Before they use various forms of managerial expertise to solve problems, organizations need to figure out which problems need solving. Before they figure out the best strategy for getting from the present to a preferred future, organizations need to figure out what that preferred future is. Before they can dedicate resources to the things they consider important, they have to figure out what things are important” (30).

Governing by mode as opposed to task may seem complicated, but once practiced it begins to make sense. And the benefits are profound. As Mihaly Csikszentmihalyi (2003) noted, good work balances opportunity and capacity. The basic idea is for board members to achieve “flow”—the mental state where a person in an activity is fully immersed in a feeling of energized focus, full involvement, and success in the process. There are three conditions that are necessary to achieve flow: (1) The activity must have clear goals; (2) there needs to be balance between the perceived challenges of the task at hand and one’s skills (too little challenge leads to boredom, whereas too much challenge produces anxiety); and (3) the task at hand must have clear and immediate feedback. Although this makes sense intuitively, achieving “flow” in the boardroom is no small feat. One person’s high challenge level and skill set are not another’s. However, the model is helpful for understanding the issue of higher purpose leading to better governance.

THE THREE MODES OR MENTAL MAPS

The governance-as-leadership model can be depicted as an equilateral triangle (Figure 1.1) because all three modes, or types, are equally important. Despite this, Types I and II are the dominant modes of nonprofit governance and Type III is the least practiced (Chait et al. 2005, 7). It is helpful to think of the types or modes of governance in terms of mental maps; a street map shows actual street names, landmarks, and places of interest whereas a mental map is how we organize what we see while we walk around those streets, such as an economy, a culture or subculture, or a demographic strata. A walk along Broadway in New York City elicits different mental maps as you start at Battery Park, pass between Chinatown and Tribeca, through the Garment and Theater districts, and beyond.

FIGURE 1.1 The Governance Triangle

Source: Chait et al. 2005, 7. Reprinted with permission of John Wiley and Sons, Inc.

Type I, fiduciary work, is intended to ensure that nonprofits are faithful to mission, accountable for performance, and compliant with laws and regulations (7–8); Type II concerns the strategic work that enables boards and management to set the organization’s priorities and course, and to employ resources a...

Table of contents

• Cover
• Contents
• Title
• Copyright
• Dedication
• List of Exhibits, Figures, and Tables
• Foreword
• Preface
• Chapter 1: The Governance as Leadership model
• Chapter 2: Getting Started and Gaining Traction with Governance as Leadership
• Chapter 3: Encouraging Critical Thinking in the Boardroom
• Chapter 4: Turning Your Board into a High-Performing Team
• Chapter 5: Creating a Governance-as-Leadership Culture
• Chapter 6: What Governance as Leadership Requires of Leaders
• Chapter 7: Measuring and Sustaining Governance as Leadership
• Epilogue
• References
• Acknowledgments
• The Author
• BoardSource
• Index