LESSON 29 OF 40: The Two Enemies of Sound Board Decisions
Avoid being pressed for time and making major decisions remotely.
Noel Tichy and Warren Bennis assert, “The single most important thing leaders do is make good judgment calls.” They go on to say, “With good judgment, little else matters. Without it, nothing else matters.” This should be a credo for every governance body. (Read more in Judgment, by Tichy and Bennis.)
Good judgment is not only about the quality of the final decision. It is also about decisions we make about how to decide. The process for decision making affects the quality of the decision. How you decide, what you decide, matters.
THE BIG IDEA FROM THE BOOK: Many board meetings would be more productive if more attention were given to the setting of the meeting and the time allocated for the meeting.
The most important ongoing decisions boards make fall into four categories: strategy formation, risk management, capital allocation, and talent management. The first three categories (strategy, risk and capital) are interconnected, like three strands of a wire. The fourth category (talent) is like the rubber sheath around the three wires. Attention must be given to how these special categories of decisions are made, regarding the time allotted and the context for the meeting.
Preparing for In-Person Board Meetings
The board chair has a unique responsibility to ensure board members will be informed and prepared for important decisions. I’ve found the following process helpful:
1. Pre-agenda call: One month before each meeting I have a call with the senior executive to discuss the agenda for the upcoming meeting. I ask questions like: What are the most important issues we need to address? What action will the board need to take on these issues? How does this inform collateral material to be included in the board book? Who else from the staff should be available to answer questions? Which topics will require the most time? Where in the agenda (time of day) should these important items be slotted?
2. Pre-meeting check-in: The day of (or before) the meeting I meet with the senior executive briefly to review the agenda, explain how I plan to set up key agenda items, and where we may be able to flex on time if we get off schedule.
All this requires a strong working relationship between the board chair and senior executive.
Preparing for Virtual Meetings
COVID-19 has disrupted everything, including the normal rhythms of governance. Even outside a pandemic, there are rare occasions where virtual meetings can’t be avoided. When this happens, it’s my preference to limit virtual board meetings to a single, time-sensitive issue. In preparing for virtual meetings I use the following process:
1. Notify the full board about the issue, why we believe it can’t wait until the next board meeting, when they will receive additional information, and the date we agreed to convene virtually to take action.
2. Distribute additional information on schedule to the full board, prepared by the staff with input from the relevant board committee. Encourage board members to contact the staff member or committee chair managing the process if they have questions. I ask the committee chair to notify me if there is confusion or lack of consensus based on inquiries from board members.
3. In the virtual meeting, ask the committee chair to review the executive summary of the prepared report along with their recommendation and allow staff members to provide nuance where needed. I encourage board members to limit their questions to information they will need to make a good decision.
4. When everyone has had opportunity to engage, I call the question based on the committee recommendation. Since I limit this kind of meeting to critical, time-sensitive issues, I use a roll call process to tally the vote.
Making Emergency Decisions in Advance
The most important decision a board makes is selecting the senior executive—the talent management category mentioned above. That process can be challenging when initiated under the duress of a sudden, unexpected transition.
Wise boards make as many of these process decisions in advance with a documented succession plan. The decisions about who is responsible for what in a leadership transition should never be made on an accelerated schedule of crisis management in a Zoom call.
THIS WEEK’S QUOTES & COMMENTARY BY STEVE MOORE:
STEVE MOORE is the president of nexleader and Growing Leaders. At Growing Leaders, Steve works with the leadership team to develop and implement the strategy to empower emerging generations with skills to lead in real life. At nexleader, he gives leadership to a growing network of coaches who use the Identity Profile Self-Awareness Tool (IPSAT) to help people discover, optimize and unleash their potential.
TO DO TODAY:
• Encourage your board chair and CEO to discuss the wisdom in Steve Moore’s blog about limiting virtual meetings to single, time-sensitive issues.
• Are you prepared for a leadership succession? Unexpected transitions are very challenging to address on a Zoom call! Check out the ECFA Governance Toolbox Series on succession planning.
• Visit the ECFA Knowledge Center and read and share the short chapter, Lesson 29, “The Two Enemies of Sound Board Decisions.”
NEXT WEDNESDAY: On July 29, 2020, watch for the commentary by David Beroth on Lesson 30, “Are You Competing Based on Overhead—Really? Boards should know the back-story on a ministry’s overhead.”
