Two strategies for improving your board’s fiduciary behavior

Once upon a time, minding your board’s fiduciary P’s and Q’s consisted of dotting organizational I’s and crossing legal T’s and little more. But no longer. Or so say the members of an august panel of governance veterans featured in the March/April 2013 issue of Trusteeship magazine. As they tell it, fiduciary stewardship stretches well beyond the board’s attention to the bottom line. 

Trustees must look to the future and execute their duties with loyalty, faith, and trust; they must ensure fidelity to mission, integrity of operations, and conservation of core values; and they must safeguard the institution’s moral compass.

Board members should be substantively educated on the institution’s mission, programs, finances, and challenges. They should be open-minded, reflective, and not parochial. They should address the underlying issues, and they should not micromanage.

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I’d love to visit the universe where boards are living up to such lofty expectations. It’s definitely not the one in which I serve and consult. In my world, keeping up with the I’s and T’s of the urgent is about as much as most boards can handle in the 5 to 10 days (cumulative) they devote to the job.

And therein lies the problem. It’s simply not possible to do what responsible trustees need to do without thinking differently about what boards do, 365 days a year. Exemplary boards are engaged, in session and out.

WHAT HAPPENS IN THE BOARDROOM

Board meetings focus almost exclusively on the past. Worse, the immediate past, sans a longer context. Administrative reports highlight what’s happened since the board was last on site – financials for the just-completed month or quarter, program achievements, and staff activities. You know, the usual dog-and-pony show. The future gets short shrift – a few crumbs of meeting time at best.

Fiduciary responsibility requires that board leadership takes control of meeting agendas, replacing administrative reports (these can be presented in writing for board members to read) with substantive discussions of one or two strategic issues on the organizational horizon. Board meetings should be interactive, lively, and informative, with as much conversation between board members as from the CEO and others administrators to the board.

As the Trusteeship article suggests, board members “can’t be experts, but they can be educated to participate in the discussion intelligently.” Board members should leave each meeting wiser than when they arrived  — about the organization, its programs, and the environment in which it operates – and primed for a continuing role in the intervening months.  What happens in the boardroom is foundational to, but not the whole of, exemplary fiduciary work.

FLIPPING BOARD PRACTICES

For too many years, out of sight has been out of mind for most trustees. Board chairs tell me it’s tough to get members to read even a short email message. As for replies, well forget it, except from a few overachievers.  Aside from the executive committee and maybe the finance committee, the majority of board members are AWOL for much of the year. All learning, information, and oversight is crammed into a few short hours.

Fiduciary responsibility requires that board members stay in the game, even when separated from the rest of the team. The weeks or months between meetings are prime time for learning, for discussing, and for studying issues. Technology makes it easy for even the farthest flung boards to stay connected and on task. For example:

  • The board chair or other committee chair posts a question for the month on a discussion board, to which board members respond via forum posts.
  • Administrators prepare webinars or narrated PowerPoint presentations that address gaps in board members’ knowledge of the organization’s programs or beneficiaries.
  • Board members meet to discuss a book or article via Skype or similar online meeting venue.
  • Ad hoc teams work on governance documents or create white papers using Google docs.

My point isn’t to list all possibilities, but to encourage your thinking about how best to engage your board between meetings in support of responsible fiduciary behavior.

Despite best efforts, it’s inevitable that some board members will refuse to get with the program. In those cases, board leaders should prepare for talk tough with foot-draggers. The organization’s mission is too important to let a laggard or two slow the board’s progress.

If all this takes your breath away, relax. But not for long. The future and its fiduciary challenges are closer than you think.

What's your take on this topic?

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