Monday, February 24, 2014

What's the Role of the Board of Directors?

By Pascal Dennis

I've given a number of talks to Boards, and am often asked: "What's our role?"

Board Policy documents use the word 'governance' -- but what does that mean?"

It's a big deal -- role confusion between the Board and senior management can weaken focus & alignment.

Once Purpose becomes fuzzy, we're in a heap of trouble.


In my experience, governance entails answering questions like:
  • Has the Leadership team defined Purpose (True North)?
  • Does Purpose align with the needs of the community & other stakeholders?
  • Has the Leadership team developed a planning & execution system to deliver Purpose?
  • Are there clear metrics with which we can assess progress & Leadership performance?
  • Is the organization on track to achieve Purpose?
  • Does the organization have a sound financial plan to support its activities?

Governance differs, therefore, from management which entails:
  • Defining Purpose
  • Aligning Purpose with the needs of stakeholders
  • Developing a planning & execution system -- and a plan -- to deliver Purpose
  • Developing clear metrics and tracking progress towards Purpose
  • Developing a sound financial plan to support its activities
  • etc.

Management must manage, the Board must ensure that they are managing effectively.

Trust that makes sense.

Best,

Pascal


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