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. Whilst the Board and the 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.
In my experience, boards have a good understanding of the college’s business and are bringing the right level of independent judgment, risk tolerance, and support and challenge to the role. Yet management are clearly saying they want more—specifically, a greater understand of today’s and tomorrow’s challenges faced by the FE sector. Conversations also reveal that college management don’t always feel confident that their governors have the skills and knowledge to fully engage in this work. They’re looking for boards to grow their expertise around these key issues and to deepen their commitment to addressing them.
So how can we build a stronger Board / Management relationship to ensure the governance function becomes a real asset to the organisation?
Not surprisingly, like any relationship, it takes effort from both sides, and Covid probably has not helped.
From the Board:
We are now under a greater requirement to undertake self-assessments and 3-yearly external board reviews. These are a great opportunity to build a more effective and impactful relationship with management. Rather than treating them as a tick-box exercise, investing time in a thoughtful, in-depth annual self-evaluation (both as a collective and for individual governors), can pay dividends. Whatever your methodology, ensure that your annual self-assessments provide opportunities for candid conversations among the governors, with management input, to allow for insightful and objective contributions. Key topics to discuss, are the board’s composition, roles and responsibilities, leadership and committee structures, meeting effectiveness, appropriateness of board materials, and development programs—and, of course, overall effectiveness.
Have an active succession plan in place. Too often, thoughts on replacing a governor do not begin until there is a resignation, or a term of office comes to an end. At this point, there is considerable pressure to replace ‘what we’ve lost’. What is needed is consideration for what’s coming next in terms of challenges and opportunities and ensuring those with the necessary skills and attributes are actively sort ahead of time. By seeking management’s input in order to create a clear plan of where the current priorities lie, the skills needed and where you might find them, can help the Board to engage those persons with the college ahead of time to create a pipeline, thus ensuring the Board is in the best position possible to find prospective governors when the need arises.
It is said that a mature governing body is one that knows its legal and governance duties, executes them effectively, reviews them regularly, and learns continuously. Whilst most governors are experts on strategy and risk, many are not so familiar with the new challenges we see around such as cyber security, sustainability etc. If there are items that have been making repeat appearances on the board’s agenda, but with which you or other governors aren’t as familiar as you would like, speak with the CEO or governance professional to ask them to consider the best way to bring the board up to speed. Management often have access to outside experts and advisors who are willing to give a fresh perspective.
It's common knowledge that Boards have a hard time having difficult conversations, and perhaps none more so than the topic of underperforming governors. Given the resources contributed by the executive to governance, it’s not surprising that this is one of their biggest complaints. Candid conversations with underperforming peers can be extremely uncomfortable. However, they are necessary in the eyes of executives and governors alike. Ideally, the board should have a policy to manage such, which ensures expectations are clear and what the next steps will be if they continue to go unmet. It is helpful if such expectations are laid out at the start of a governor’s tenure, through a Letter of Engagement, or something similar, so reducing the risk of poor performance. Ongoing feedback from Chair to individual governors and the use of individual governor reviews which incorporate the views of management, are also key.
Historically, recruitment to a board use to be facilitated by the networks of individual board members. Unfortunately, this can be a real barrier to building a diverse board. It is well known that we tend to like people who are like us, and social studies show that this becomes even more pronounced in times of crisis or financial hardship. Using an independent search firm for governor recruitment, can go some way to mitigating the risk of group think, ensuring management engagement in board work, and increase the performance of the board through greater demographic and cognitive diversity.
From the Executive:
Integrating new board members is integral to the success of the board, particularly when bringing in diversity. During Covid, many new governors did not have the opportunity to visit the college or indeed meet management. Assisted by the governance professional, the executive should develop a coordinated induction strategy that gives new governors facetime with relevant management functions. Very early in their tenure, each new governor should have time for one-on-one discussions with the CEO’s direct reports, as well as the governance professional.
The induction process detailed above, is not only important for understanding and triangulation of information, but also for the opportunity to build relationships. Boards are social structures and human interactions are key to their success. An investment should be made annually, for the board and management to come together to discuss and agree what they want from the governance dynamic, what is working well and what needs improvement. Ensuring lines of communication are open between key functions such as the audit committee chair and the CFO, for example, are important, and if those connections aren’t as strong as they could be, commit to a plan for improving them.
Governors need to remain informed to be effective in their roles. When providing data or other information to the board, make sure you’re striking the right balance—it can be just as difficult for governors to have too much information as too little. Consider whether the information provided is to inform or manage the board – is it time for a cultural shift? Taking a fresh look at the materials provided to the board from a governor’s perspective, in particular, asking whether the information provided can reasonably be absorbed by the governors, can yield some insightful recommendations. In presenting data to the board, dashboards can be a powerful tool to collect and visualise important data in a way that’s more digestible than charts in a power point. Consider distilling key messages into executive summaries and ensure that the board has enough lead time to digest whatever is provided i.e., no tabling of late papers.
Governors are not active in the day-to-day of the college’s work and therefore some of the responsibility for their education, lies with management. This is a real opportunity to bring governors up to speed on new areas of risk and opportunities that the college is engaging with. Board agendas are often very full, so consider other methods such as written briefings and recordings which governors can access in their own time and at their own convenience.