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Governing Board Challenges
Part 4

photo of board room meeting in silhouette

Bringing to closure our consideration of challenges governing board members face, in this post I address commitment, consequences, tone at the top, and truth.

Commitment – Typically, being a board member is not intended to be a full-time job. Instead, board members are fully employed elsewhere, resulting in them being limited in the amount of time they can devote to their governing board position.

For corporate boards, financial compensation is provided to board members and, depending on the company, the level of financial compensation can be quite significant. However, I don’t believe compensation is a principal reason directors serve on governing boards. Instead, I believe it’s because of the value they receive in learning how the company is organized and managed, in networking with fellow directors, and in assisting a company in which they have a financial interest. Rarely do directors not own stock in the company they govern. In general, a board member’s interests are aligned with shareholder’s interests.

For university trustees, typically, no financial compensation is provided. However, for many, the perks and prestige associated with being a trustee make it an attractive position. Perks could include all-expense paid attendance at athletic and social events and study tours, invitations to banquets, and access to presentations by students and faculty members, among others. For many, serving as a trustee is a way to pay back an alma mater for education the trustee received and/or to serve citizens of the region.

As with trustees, nonprofit organizations don’t pay board members; typically, all are volunteers. However, there are generally fewer perks and the level of prestige is definitely in the eye of the beholder. Yet, my extensive service on boards of nonprofit organizations shaped and developed me as a leader.

Consequences – Before taking action, board members must think carefully about the ramifications of their decisions. To avoid unintended consequences, board members must ask questions and attempt to identify the consequences of what Walmart’s Judith McKenna called the second bounce of the ball, the after-effects of decisions they make. There is ample evidence that board members often forget to consider the unintended consequences of their actions.

Tone at the Top – An essential ingredient for an organization’s long-term health is tone at the top. Too often, board members fail to realize they are at the top and the tone they set cascades throughout the organization. The life of a board member is not unlike life in a fishbowl; everyone watches what you do. Words matter; actions matter.

Appointing the right board members is essential in establishing and maintaining the right tone at the top of the organization. Not only must board members be well qualified, but they must also be independent and aligned with the organization’s culture and values.

Truth – The greatest challenge for a board member is finding truth! Despite what Sherlock Holmes said to Watson (“… when you have eliminated the impossible, whatever remains, however improbable, must be the truth”), it’s not easy for leaders to eliminate the impossible. Learning what is true and what is false isn’t only a challenge for board members, but also for CEOs. Motorola’s CEO had great difficulty learning the truth about the financial outlook for the cell phone business prior to its separation from the legacy business.

Although it’s possible some will intentionally mislead you, there are others who believe they are telling you the truth. However, it’s the truth as they see it. Their version of the truth is colored by their experiences, motives and, perhaps, responsibilities.

Rufus E Miles, Jr. is credited with “Where you stand depends on where you sit.” How you view the world depends on where you have been and where you are. Shakespeare put it well, “What is past is prologue.” Everything that has happened in life affects how you process information (what your mind’s eye sees) and shapes your future. Psychologists have known this for many years. Ten witnesses see the same thing, but they give at least ten different versions of what occurred.

Complicating a search for truth is a phenomenon psychologists identify as confirmation bias, the tendency to interpret new evidence as confirmation of one’s existing beliefs or theories. So, how do you get to the truth? Highly effective leaders ask lots of questions; they don’t accept things at face value. Put your nose in; does it pass the smell test? Ask lots of people lots of questions. If possible, avoid being dependent on a single information source.


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