What Boards get to see in the boardroom versus what they want to see – why the ‘relationship’ conversation is crucial.
The working relationship between the board and management is one of the most crucial elements of good governance, but one often overlooked. This may be because we focus so much on the legal and fiduciary role of the board that we ignore its operational limits.
Read more here to learn about how the challenges to this symbiotic relationship come about and what solutions might resolve it.
Link/Special Interest Governors - a help or a hindrance?
There is a growing requirement or strong recommendation for link governors to be appointed for specialist areas such as careers, SEND, mental health, sustainability, cyber, etc. This has led some colleges to review their skills audits and recruit individuals with such specialist skills, to both meet these recommendations, as well as ensuring specialist skills as relevant to the future strategy, are present.
It is understood that link governors are appointed to take the lead on an area of their governing board’s responsibilities or to help monitor a specific improvement priority. This is seen as an opportunity to use an individual’s experience and skill set, as well as being a useful way for the governing body to develop positive links with staff and to maintain a visible and professional profile within the college. However, whilst rarely stated or understood, the primary responsibility of a link governor is to enrich the understanding of every member of the board on the area to which they are linked, to enhance informed decision making. It is therefore essential to ensure there is a defined opportunity and mechanism for such learning to take place.
This piece, which details fiduciary duty and the importance of collective responsibility, can be found here.
ONS Reclassification - implications for governance
It was clear from the Skills for Jobs White Paper, that oversight of colleges was only going one way on the department’s agenda, and that was up. This focus is likely to only increase post the ONS review, with excellent governance being viewed as an essential facilitator for the aspirations of education and skills development. A view on the implications of the ONS reclassification on governance can be read in the opinion piece here.
Helping boards stay strategic
In my role of advising FE institutions on how governance can be more impactful, the most common complaint I hear from senior leaders about their Board, is that it is not sufficiently strategic – that they wish it had a more strategic focus.
As senior leaders, governors, and governance professionals, we all know that the role of the board is a strategic one, so why then is it sometimes so hard to achieve this? I detail here a few elements that I’ve observed in my board work, that I believe are key to enabling the board to function as it should, at a strategic level.
Building a stronger board / management relationship
The relationship between the Board and Management can be a tricky one to negotiate. We are told not to be too close and cosy, rather to maintain a degree of distance to ensure objectivity, but is this really optimal?
Whilst the Board and Executive are unique, the power and ultimately the performance of the college or organisation, comes not from their individuality, but from their unity – individually responsible and jointly accountable. Such unity requires there to be a measure of trust and respect and it is difficult to see how this can be achieved without a degree of proximity in the relationship between the two. Trust relies on competence, character, and connection.
Effective corporate governance requires collaboration between boards and management teams. Though the responsibility of oversight belongs to governors, they cannot fulfil it alone. Building a stronger partnership between the Executive and the Board can only benefit the college or organisation in the long run.
So how can we build a stronger Board / Management relationship to ensure the governance function becomes a real asset to the college or organisation? Some further thoughts on why this is necessary and how the board and executive might go about it, can be found here.
Training & Development - what do governors really need to know?
Following the publication of the Skills for Jobs White Paper, there is now a regulatory requirement for governors and governance professionals to undertake training and development, and to report on the impact of such on the individual, the college, and the sector. So, what is it that we as governors should be focused on?
In my experience, boards are made up of individuals who are highly intelligent, very smart, sophisticated people, often renown and highly respected in their sphere of influence. And yet collectively, such positive traits appear to be no guarantee for effective governance, nor do they appear to mitigate corporate governance failings. Further thoughts on what the key 3 ingredients are that all governors should have knowledge and skills in, can be found here.
The role of the board in engendering the college of the future
With the recent publication of the #CollegeOfTheFuture report and the imminent White Paper, it is quite apparent that there will be many and significant strategic decisions to be made on the purpose, place, and governance of colleges and post-16 providers. This raises the question of what is the role of the governing body (the Board) in this process? The full text on this opinion piece can be found here.
What, if any, are the value effects of having a digital expert on your board?
This research paper examines the impact of board level digital expertise on firm performance for a sample of FTSE 350 firms over the period 2013 to 2018. The researchers find that the presence of digital experts on the boards is significantly and positively related to firm performance. The report details several additional tests to establish the robustness of the causal relation between digital experts on board and firm performance. Using propensity score matching (PSM) analysis, it documents that firms which have digital experts on board have a significant increase in their firm performance relative to a matched sample of firms without digital experts on board. The findings underscore the significance of digital experts on board in improving firm growth, liquidity and reducing business risk, thereby enabling such firms to increase performance. Additional tests show that the presence of digital experts on board has a strong influence on information asymmetry and corporate governance mechanisms.
How can boards exert influence from the boardroom?
You may have read my research work for FETL which made reference to research on the subject of if and how boards can influence performance outcomes. Dr Peter Crow has been investigating such possibilities and concludes that influence is possible. Boards need to be skilled in knowing when to lead, when to collaborate, when to propose, and when to give management more room. Such a skill is one that accelerates a board's influence. The opinion piece can be read here.
Can you legislate against corporate governance failings?
With the collapse of Wirecard this week with loses of approximately £4 billion, the German government is looking at what further legislation/regulation should be introduced. “The Wirecard case damages corporate Germany. It should be a wake-up call for reforms,” said Volker Potthoff, chairman of corporate governance think-tank ArMID. Yet, as within the FE sector, a continuous stream of intervention, codes, and regulation, seems to do little to mitigate corporate governance failings, and compliance with such appears to be a poor predictor of board effectiveness or indeed, institutional performance. The opinion piece can be read here.
What does your board cost and is it good value?
Have you ever thought to calculate and report on the cost of having a board? The cost of a board far exceeds the visible cost. Senior executives spend considerable time preparing information for the board, writing agendas, papers and minutes, tracking down information, the logistics of board travel and meetings, and interacting with governors in committee, board, or one-on-one meetings. A discussion on the benefits of calculating such and how to go about it, can be read in the opinion piece here.
FE and Skills and Shame in Organisational Life - a governance perspective
The recent publication from FETL (Further Education Trust for Leadership). 2020 FE and Skills and Shame in Organisational Life, got me thinking on the position of the board, the chair and the governance professional in regard to organisational failure. The opinion piece can be found here.
When reading an FE Commissioner’s report recently, a thought occurred to me, ‘who is ultimately accountable and responsible for the governing body’s effectiveness? Is it the governance professional, the chair, the governing body itself, or all three?’ The opinion piece can be found here.
The board’s role in the Covid-19 crisis
Is there a danger that in times of crisis, the governing body runs the risk of becoming too operational? Typically, management will carry the day-to-day burden of managing the response to the pandemic. However, the board’s role remains crucial. The opinion piece can be found here.
Governance Professionals as change makers
Boards continuously face new challenges. The beautiful thing about governance professionals is that, as the board’s secret psychologist and unofficial coach-in-chief, they can play a crucial role in boosting the agility and resilience of their boards by influencing board dynamics.
The ability to influence boardroom dynamics is fundamental to the successful governance professional, yet it remains a mostly intuitive and unspoken activity. How to encourage and support others to change their behaviours is a sensitive practice, and the requirement is rarely articulated in any job description.
Nicola Hopper, Associate Director of Company Matters, sums this up well in her blog https://www.icsa.org.uk/blog/the-beautiful-thing-about-boards