Wednesday, August 1, 2012

Murder in the Boardroom: Death by Strangulation and Poisoning

A selection from Origami in the Boardroom and Other Misadventures in Nonprofit Governance© By Neil Bohnert

The next item on the agenda was a preliminary report by the chairman of the Nominating Committee based on a board resolution adopted several months earlier. The committee chairman gave a brief report on the committee’s progress, then turned to a long-time member and said, “Dick, you’re eligible for another term.  You’ll agree to serve, won’t you?”  Dick agreed.  The chairman then turned to another member and made the same offer, getting a like response.  “Well then”, he exclaimed, “we have a full slate.”  And with that, he gestured to the group that the work of the Nominating Committee was finished.  The board looked on as the very life breath was squeezed out of the organization.

Typical?  Yes.  Easy?  Absolutely.  Effective?  Definitely counter-effective.

It was a clear case of double murder; strangulation and poisoning.  The gene pool had been poisoned by not exercising the greatest and most fundamental opportunity available to the board; getting new talent.  Not only getting new people, but identifying the organizational DNA needed to bring about a positive mutation in the board.  No new members were being nominated for the next year and, further, the Nominating Committee had been derelict in its duty.  The board had charged the Nominating Committee, in writing, with reporting on four key actions:

·        Identifying the skills and talents needed on the board;

·        Seeking candidates that met the identified needs;

·        Developing a plan for orientation of new board members; and

·        Developing a plan of succession for officers.

The committee had failed in every charge and in so doing had ensured that the governance of the organization would not be changed. It would be allowed to stagnate: Status quo; same-o, same-o; into an inevitable death spiral.  Strangled.

As for the poisoning, boards tend to clone themselves.   When an opening occurs for a board seat, the usual practice of the Nominating Committee is to look to one another for suggestions and recommendations.  It’s a practice learned from years of experience with nonprofits.  Since we tend to move and work in circles of like-minded people, the natural consequence is to find another director just like ourselves.  Without a plan or deliberate process for determining what is needed and where to find it, we lapse into the habit of cloning.

Oh, I know what you’re thinking.  The board was already ideal and nothing needed to be done to improve the composition or balance.  That’s so rare it’s difficult to comprehend.  And even if that were the case, the board should regularly examine its makeup against what is needed for the organization.  Organizations are not static.  The external environment is not static.  Why should a board be static?  By regularly profiling the board, a board can compare “what is” with “what should be” and thereby seek and identify qualified candidates well in advance of an opening.  This avoids the problems of cloning and stagnation.  In addition, a thorough orientation process needs to be designed.  And finally, a succession plan for leadership should be in place to provide continuity and preparation for future leadership.

The committee charged with the nominating process is the most important committee of the board.  Why, then, do we give short shrift to this important work?  More often than not, the committee is activated shortly before elections, given a list of expiring terms and the names of people who are eligible for re-election, and instructed to prepare a slate.  Then the committee sees that they only have to find one “new body” and they take the path of least resistance.  

Let’s start with profiling the board and making the nomination process a year-round activity, not a last-minute sprint to the annual meeting.  Who will be leaving (term limits or other reasons)?  And don’t forget to ask who should be leaving.

Let’s start with strategic diversity—getting the mix of talents that’s right for the organization.

What’s missing?  Will we need to replace important skills lost through attrition?  What do the strategic priorities of the organization demand for governance?

Let’s start with forgetting about constituencies.  Board members do not “represent” a segment of the membership.  Service on the board carries fiduciary responsibilities to act in the best interests of the organization.  Representational governance should be left to legislative bodies.

Let’s start with getting serious about developing the board—orientation, education, succession planning, committee and board structure.  And don’t neglect the need for living, working bylaws.

So, what’s the lesson from this story, a true-life misadventure?  The need for a board work plan and a real commitment to improving the governance function is essential to achieving exceptional board performance—and the mission.  Mediocre performance begets more mediocrity.  Maintaining the status quo is a prescription for slow death by strangulation and poisoning. 

Let’s get started!

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