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.
Consider — at least for independent governors, the board has a very minor, tenuous presence. They convene at most every couple of months. Their existence as a working group lasts for a few hours. They are heavily distracted by “day jobs,” and likely only gave mind share to the college for a day or two before the meeting. Add a bit more time and focused study for your board committees, but these plunge even deeper into the technical, financial, legal, and operational nuts and bolts. Your board members are typically savvy, experienced business people, but also part-time amateurs wrestling with a full-time, important business, and are expected to effectively monitor all aspects of it. Good luck with that.
But rather than slag off the realities of boards, look at the other side of the equation. There sit full-time executives who live, eat, breathe, and sleep the college, and are the board’s lifeline. They put together the numbers the board sees, support their work, and look out for their interests the 90% of the time the board is adjourned (or they should). This senior management team, the chief executive, finance staff, legal, HR, and perhaps most of all the governance professional, fuel the board’s governance oversight. They write and compile reports, prepare financials, craft proposals, chase info and manage filings. Board members are wholly dependent on these staffers, and value their efforts. These staff, for their part, know who the ultimate boss is, and put in the extra hours to “get ready for the board meeting.”
But in practice, this symbiotic relationship has its problems. Board members tend to be passive on accepting whatever information they receive, without pushing back on making it more effective. Executives, typically overworked and under resourced, lack the time to customise briefings and presentations that address the unique needs of boards and committees. Financials, paperwork, filings and so on are just copied from internal management material, rather than bespoke for board needs. Executives compile info for boards based on what governors must see for a decision, rather than what they want to see for full understanding and best use.
The solution to this is smarter communication from both sides. Boards need to discuss what they really want and need from management for fully effective oversight, and then make this clear to Executives – the expectation being that report authors must critically analyse data, turning it into information, and then advise the Board on what the strategic implications of that information are. Executives (and the governance professional), already groaning under the busywork of board meeting prep, then work on finding smarter, more efficient ways to leverage existing data, tools, and technology, to deliver what boards need, with less time and less effort. Done right, everyone wins.
Thanks to Ralph Ward at BoardroomInsider for his contribution to this piece.