June 20, 2012

Governance as Leadership by Gerald Meck

During my 40 years of nonprofit executive leadership, and more recently as a consultant, I’ve been reminded of the critical role of the board of directors in the operation of an organization. Recently I was reading a book entitled Governance as Leadership by Richard Chait which prompted me to think further on board governance.

Have you looked up “board governance” on Google lately? The last time I checked, the results stood at 21,800,000. These include best practices, free resources on the web, books, articles, consultants, workshops, case studies, etc. This number of entries alone suggests that governance is an important role of the nonprofit board.

Governance is the act of governing. From its Greek origin, Kubemao, means “to steer”. Nonprofit governance focuses primarily on the board’s fiduciary responsibilities with respect to the exercise of authority over the explicit public trust that is understood to exist between the mission of an organization and those whom the organization serves.

Leadership as defined by John C. Maxwell is “the ability to obtain followers.” Leaders obtain followers by influence. The governance role of a board is to influence the organization in three ways as suggested by Chait.

Generative — developing the big picture

• Relying on a sense of the past to generate new insights
• Looking beyond the details of the issue for answers to problems
• Recognizing there is no one answer to a problem
• Involving “outsiders” to gain insights for decision making
• Suspending “Roberts Rules” in order to encourage creative dialogue

Planning — setting goals and evaluating

• What business are we in
• What do our customers want
• Where do we have a competitive advantage
• What are our competencies

Fiduciary — minding the rules of organizational life

• Can we afford it
• Did we get a clean audit
• Is the budget balanced
• Should we increase departmental budgets
• Does a merger make financial sense
• It is legal

Today governance has become a front-page story propelled by a steady flow of articles on acquiescent and negligent corporate boards and unbridled (and often unethical) leadership. There are examples of these stories in Lancaster and surrounding communities. The Goverance as Leaders role was not followed.

Nonprofit organizations are experiencing many challenges including a lack of public trust, shrinking resources, increased regulations and an increased demand for services. For a nonprofit organization to be successful, it requires boards of directors who think and govern like leaders. Consider what you can do to enable success in the nonprofit organizations that you support by developing, providing and /or encouraging strong leadership in its board of directors.