Steward Leaders: Governing through a Governing Board

Posted by Matthew Thomas

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matthew-thomas-2Today we look at the fifth in our series of posts on a variety of styles and types of boards and committees often found in nonprofits and religious institutions. In this series, we will look at four common types, and one variation on a type:

 

  • All-volunteer working board
  • Working board with staff
  • Multiple working boards with staff system
  • Advisory board
  • Governing board

 

So far, we have looked at the All-Volunteer Working Board, the Working Board with Staff, the Advisory Board, and the Multiple Working Boards with Staff system.

 

While these are not the only structures out there, they are very common and most likely to be encountered by steward leaders who engage with the organizations they govern. As leaders who want to “do good while doing well,” steward leaders can benefit from a deeper understanding of the different types of common governing structures.

 

In this series, we will use the term board throughout for clarity. Nevertheless, we acknowledge that many names are often in play (particularly committee), but other, more institution- or industry-specific names are prolific.

 

Boards, to one degree or another, represent the organization to its members, stakeholders, constituents, and to the State. They are designed to make decisions on behalf of the organization, to the degree permitted by the articles of organization and/or bylaws, constitution, operating agreements, the laws of the organization's state or country, or other constitutive documents.

 

Today's board is the Governing Board. While all the other types of boards are common in a variety of organizations, the Governing Board has largely become the standard for most organizations with a staff.

 

Like what you're reading? Subscribe Now! Key Characteristics:

 

  • Clear differentiation between governance (board) roles and the work of the organization's mission carried out through staff
  • Typically hires one staff person who, in turn, hires others to carry out the organization's mission as defined by the board
  • Board is policy-oriented, rather than hands-on-work oriented.
  • Can work with any size of organization where staff is differentiated from the board
  • Board's purpose is driving toward the organization's purpose within its financial and values constraints

 

The Governing Board is a good design for:

 

  • Organizations with defined governance and staffing
  • High-impact organizations
  • Organizations not dominated by a founder or staff person
  • Organizations with well-trained, high-capacity boards

 

The Governing Board is a poor design for:

 

  • Organizations with no staff
  • Organizations dominated by a founder or staff member (these become "rubber stamp" boards, or enter into push-pull with the dominant person)

Financial Roles Get the map!  

 

Pitfalls of the Governing Board model:

 

  • Requires clarity and differentiation of staff and board roles
  • If board is weak, then staff will dominate (this is true of all the models, nevertheless)

 

Typical examples:

 

  • Most nonprofits and elder-run religious organizations

 

This board is most analogous to a standard corporation setup where a board representing shareholders hires a CEO to run the company and then the CEO hires all others needed to operate the company.

 

Design Group International has compiled a resource outlining all five governance types in this series. Get the e-book today by clicking the button below.

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Topics: steward leaders, Matthew Thomas, steward leader, Organizational Governance, steward leadership

Steward Leaders: Governing through multiple boards

Posted by Matthew Thomas

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matthew-thomas-2Today we look at the fourth in our series of posts on a variety of styles and types of boards and committees often found in nonprofits and religious institutions. In this series, we will look at four common types, and one variation on a type:

 

  • All-volunteer working board
  • Working board with staff
  • Multiple working boards with staff system
  • Advisory board
  • Governing board

 

So far, we have looked at the All-Volunteer Working Board, the Working Board with Staff, and the Advisory Board.

 

While these are not the only structures out there, they are very common and most likely to be encountered by steward leaders who engage with the organizations they govern. As leaders who want to “do good while doing well,” steward leaders can benefit from a deeper understanding of the different types of common governing structures.

 

In this series, we will use the term board throughout for clarity. Nevertheless, we acknowledge that many names are often in play (particularly committee), but other, more institution- or industry-specific names are prolific.

 

Boards, to one degree or another, represent the organization to its members, stakeholders, constituents, and to the State. They are designed to make decisions on behalf of the organization, to the degree permitted by the articles of organization and/or bylaws, constitution, operating agreements, the laws of the organization's state or country, or other constitutive documents.

 

Today's board is the Multiple Working Boards with Staff system. This is a variant of the Working Board with Staff.

 

Like what you're reading? Subscribe Now! Key Characteristics:

 

 

The Multiple Working Boards with Staff system is a good design for:

 

  • A federation, association, or membership organization with clear mission and purpose and easily divisible, task-oriented work not requiring much coordination
  • An organization whose purpose is to maintain a status quo and whose board roles are clearly defined and non-overlapping

 

The Multiple Working Boards with Staff system is a poor design for:

 

  • Organizations trying to move in one direction
  • Organizations attempting significant change
  • Organizations where any significant level of coordination is required between boards
  • Organizations where staff overlap and report to multiple boards
  • Organizations needing to develop mission and purpose
  • Decisions that require agreement of the whole, since each unit holds partial, independent authority

 

Financial Roles Get the map!

Pitfalls of the Multiple Working Boards with Staff system:

 

  • Lack of coordination
  • Silos
  • Inability to make system-wide decisions at the board level
  • Micromanagement
  • Clashes over authority of various units with overlapping (or partially overlapping) responsibility
  • Extremely difficult to motivate consistent vision and direction

 

Typical Examples:

 

  • Medium-sized congregationally-governed religious institutions
  • Regional, State, or National nonprofit associational or federation bodies made up of chapters, members, or other subordinate institutions, but with their own operating structure and purpose

 

This system is most analogous to a corporate conglomerate, but really only exists in the nonprofit world in its true form. 

 

Design Group International has compiled a resource outlining all five governance types in this series. Get the e-book today by clicking the button below.

Get the   Five Types of Governance   resource today!

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Topics: steward leaders, Matthew Thomas, steward leader, Organizational Governance, steward leadership

Steward Leaders: Governing with an Advisory Board

Posted by Matthew Thomas

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matthew-thomas-2Today we look at the third in our series of posts on a variety of styles and types of boards and committees often found in nonprofits and religious institutions. In this series, we will look at four common types, and one variation on a type:

 

  • All-volunteer working board
  • Working board with staff
  • Multiple working boards with staff system
  • Advisory board
  • Governing board

 

So far, we have looked at the All-Volunteer Working Board and the Working Board with Staff.

 

While these are not the only structures out there, they are very common and most likely to be encountered by steward leaders who engage with the organizations they govern. As leaders who want to “do good while doing well,” steward leaders can benefit from a deeper understanding of the different types of common governing structures.

 

In this series, we will use the term board throughout for clarity. Nevertheless, we acknowledge that many names are often in play (particularly committee), but other, more institution- or industry-specific names are prolific.

 

Boards, to one degree or another, represent the organization to its members, stakeholders, constituents, and to the State. They are designed to make decisions on behalf of the organization, to the degree permitted by the articles of organization and/or bylaws, constitution, operating agreements, the laws of the organization's state or country, or other constitutive documents.

 

Today's board is the Advisory Board.

 

Key Characteristics:

 

  • Designed to provide advice and feedback to an executive, group, or entity
  • Not properly a board in a governance sense if truly acting in an advisory capacity
  • Operates at the invitation of the person or entity being advised

 

Like what you're reading? Subscribe Now! The Advisory Board is a good design for:

 

  • Executives needing staff or constituency feedback
  • Political units needing constituency feedback
  • Organizations where governance lies outside the organizational structure but feedback systems are still needed

 

The Advisory Board is a poor design for:

 

  • Governance and accountability (the advisee can dismiss the advisors at will, or, at least, is not required to take their advice)

 

Financial Roles Get the map!

Pitfalls of the Advisory Board:

 

  • Handpicked advisory boards can be echo chambers for the leader's own ideas
  • Accusations of nepotism or cronyism in selection
  • Feedback skewed toward advisors' issues, rather than whole constituency
  • Accountability and governance through the Advisory Board is nearly impossible if it is to retain its advisory status.

 

Typical Examples:

 

  • Resident advisory committees offering feedback to municipal governments
  • Some religious organization boards where governance is held either by clergy or outside the local setting
  • Formal stakeholder groups not otherwise part of the formal structure

 

The Advisory Board is most analogous to a staff feedback team in a business or corporate setting where the executive selects (or has selected for him/her) a group to give feedback and advice on a particular decision or set of decisions. It is an invitation to participate without upsetting any chain of command.

 

Design Group International has compiled a resource outlining all five governance types in this series. Get the e-book today by clicking the button below.

Get the   Five Types of Governance   resource today!

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Topics: steward leaders, Matthew Thomas, steward leader, Organizational Governance, steward leadership

Accountability in Local Government: Steward Leadership of Public Input

Posted by Matthew Thomas

Organizational accountability is often a challenge in local government, since there are almost always people with very different perspectives elected by different constituencies thrown together to try to govern a  common municipality, school system, or other local entity. Accountability, on the one hand, is to those who voted in that district to elect the people now governing. On the other hand, there is often a separation of powers that requires those governing to be accountable to one another. Moreover, beyond those two structural accountabilities, there is a certain amount of transparency and collaboration that must take place for those two accountabilities to provide enough of a structure to create civic health.

matthew-thomas-2In many municipalities, the separation of powers elects an executive mayor independently of a city council. The mayor is tasked with running the city, but the council is tasked with making appropriations and laws. The accountability between the two is primarily budgetary, with the council controlling the purse strings. In turn, the municipality must follow the state statutes within which their powers exist.

Clear accountability begins with a clear understanding by both the municipal government and the citizens as to who the owners are. In most democratic nations, the owners are the residents of the municipality. The government then becomes steward of the municipality’s “common good” assets. Where it becomes confusing for the average municipal resident, public employee and elected officer, is that the residents are both the owners and the recipients of the municipality’s services – and are, in other words, owner, customer and beneficiary all at the same time. This means, as John Carver says in On Board Leadership (Josey Bass, 2002, 91), “Each of us operates much more as a customer of government than a joint owner, even though it is the latter role that offers long-term improvement.”

An accountable municipal government, then, seeking to be good steward leaders of the public assets they manage, will intentionally seek out owner-type information from its citizens, so that they can, as Carver says, “[governments] continually weigh exactly what municipal outcomes for citizens are worth how much taxation.” (ibid., 93.)

Thinking in these terms requires municipalities to start thinking about their goals and priorities from the perspective of revenue, not expense. Otherwise, it becomes all about hiring or layoffs and maintenance and building projects and road resurfacing and the list just goes on and on. Looking at the goals, priorities, and needs of the community from the perspective of revenue allows the municipality to balance the costs to prioritize expenditures from the owners’ perspective. Steward leadership requires starting from what the municipality has, not what it doesn't yet have.

This also requires discovering techniques for soliciting public input that will generate owner-type input rather than just customer service complaints or customer satisfaction surveys. Elected officials, though they run on specific campaign promises, should never assume that they really know what their constituency is thinking without periodically seeking this input.

Governments can begin this process by moving all customer service and customer satisfaction type work to the municipal departments responsible for carrying out services. It can establish clear chains of command and responsibility for dealing with needs and complaints in those areas. Then, it can form survey and other feedback instruments structured around goals, priorities and good stewardship of assets, and deploy them in ways even the most disinterested resident will interact with. This will help to make the municipality’s governance more strategic, while dealing actively with residents’ customer-type needs.

Healthy accountability in local government is not an easy process to maintain, as most municipal habits tend toward reactivity to complaints and the micromanagement that is derived from generations of attempts at transparency and accountability by committee. Nevertheless, local governments can benefit from good organizational design and process just like any other organization. Finding creative ways to seek local owner-type input is one of the first steps along the way.

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Topics: Organizational Governance, steward leadership, municipal government

Organizational Accountability in Churches and Divine Revelation

Posted by Matthew Thomas

Accountability in Churches between the senior staff person(s) and the governing body, or bodies, often becomes more complicated than in other situations. We often see a variety of issues that crop up that appear more commonly in churches than elsewhere. Primary among them is the Appeal to Divine Revelation.

matthew-thomas-2Churches, more than most other organizations, can make use of the “God trump card” in decision-making. This appeal to divine revelation has a tendency to silence other voices as “weak in faith” or “too earthly minded” or “unable to see the divine realities which I am privileged to know.” It tends to create declarative leadership that tends to discount differing perspectives and the mindsets and concerns that drive those differing perspectives.

The Appeal to Divine Revelation sets up the idea or project that is being proposed or defended as something that is a class apart – one that dares others to challenge not only the person but the person’s god. One way to level the playing field in this scenario is to set specific boundaries that assure the organization’s leaders or board that the person basing their actions in revelation still must obtain organizational permission to take action beyond certain limits. These limits essentially say, “If you believe God is telling you to do/say/teach/believe that, then he had better be telling us, too, or else we reserve the right to deny that you are hearing clearly, for issues of a certain organizational significance.”

If the board of directors of the church, at whatever level of the hierarchy that they operate, have no capacity to weigh and test the Appeal to Divine Revelation, then accountability has broken down, since the directors have no recourse to respond to the God trump card. They will be held as perpetually less spiritual than the others, operate with less authority, and either end up ignoring the person who appeals to divine revelation or follow them into whatever has been revealed, whether wise, helpful, consistent, valuable, or not.

The person making the Appeal to Divine Revelation can be anyone who speaks in the decision-making process, whether board member, staff member, constituent, or stakeholder. The tone is almost always one of “you must not question,” or of guilt or shame. The Appeal can be issued by a staff person looking to take on a new project, or by a board member looking to alter a procedure. It can be issued by a parish or congregation member looking to make a point, or by the con artist who demands $20.00 for gas money, stating that a person really isn’t a believer if they don’t cough it up.

In most cases, the best solution is to develop the kinds of process that allows for people to speak from a reflective place: if an appeal is made to Divine Revelation, there is a space where that is tested and examined among people of equal status before allowing the appeal to change the course of the organization beyond certain limits. In many cases, it comes down to respecting those who share the authority to govern and make decisions, and find the common ground upon which to walk forward together.

 

Tao of action-reflection, primer on process

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Topics: church decision making, Matthew Thomas, Organizational Governance

Steward Leadership: Process of Choosing Accountability

Posted by Matthew Thomas

Last month, we discussed the definition of accountability and how accountability must come at the initiative of the owners, and then move on down through the organization. Frequently, the discussion comes up as to how best to choose those who represent the owners. In a small company, usually the owners act as their own board of directors. In a larger company with a larger number of shareholders, this is usually done at the shareholders’ annual meeting, and often by proxy.

matthew-thomas-2In non-profit and church organizations, the process of choosing directors varies dramatically. In these cases, it is important for steward leaders making the initial selection to work out their stated values ahead of defining the process, as well as defining their model for how they interpret the owners’ wishes. The organization’s bylaws will typically speak to this, but if new bylaws are in the offing, or old ones are being reviewed for revision, there may be room for laying out the process and model more explicitly. Solid steward leadership means that the directors steward on behalf of the owners, not just the stakeholders.

A few key ideas to keep in mind, no matter the type of business or organization:

  • The process of selection must reflect the organization’s (owners’) values. Therefore, the process’ crafters must have some means of discovering, knowing, and implementing those values.
  • Employees, particularly the most senior staff person, are stakeholders in the process, but should not choose those to whom they will be accountable unless they somehow also are owners, or represent the owners, and then their influence in and control of the process should be no more or no less than other owners with equivalent stake and standing.
  • The process of selection should not concentrate power in any one person who is not a direct owner of the organization.
  • Those selected should reflect the owners’ values, and, unless the owners’ values dictate otherwise, should be independent of management.

For an organization or business to maintain healthy accountability, it must make sure its process for selecting its directors, who will then represent the owner or owners, is itself an accountable process.

How does your organization or business select its directors?

If you are interested in how you and your organization might improve governance and accountability, we can help! Click the link below, and we can set up an initial conversation.

Free Governance Consultation

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Topics: Matthew Thomas, Organizational Governance

Organizational Governance: Structures and Growth

Posted by Matthew Thomas

In a growing organization, the structure will lag the organization as various parts must be implemented to fulfill the organization’s mission. In a shrinking organization, the structure becomes a greater and greater part of the organization until not only does it lead the organization, it becomes the rationale for the whole organization. The organization will often then cannibalize its vision for its own survival.

Breaking through decline to thrive again involves both offering vision and dismantling enough of the structure (often significant chunks of it) to change the patterns back to vision-driven organization, where structure lags. Nevertheless, if an organization never allows the structure to mature, it will never reach its full power and potential.

Design Group International has experienced consultants available to help review and design these essential structures, and guide your organization through the process of developing them. Click the link below to continue the conversation with us!

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Topics: Matthew Thomas, Design Group International, Organizational Governance, Structure, Organizational Life Cyle

Organizational Governance: Layers of Documents

Posted by Matthew Thomas

Many people find themselves lost in the variety of legal documents involved in a church or non-profit. There are three major sets of documents every organization needs to have to operate.

1. Articles of Incorporation: This is the filing with the state in which the organization has its main office which creates the legal entity that can, like a regular person

  • Buy, sell and own property
  • Receive income and make expenditures
  • Sue and be sued

Among other things.

The articles state the organization’s legal name and its legal purpose. All further documents must operate within that purpose.

2. Bylaws or Constitution: Some organizations have both bylaws and constitution where the constitution typically has greater authority and less mutability than the bylaws, which are often more policy-oriented and more easily changed.

Nevertheless, many organizations just have one or the other. The purpose of this document is to determine the means by which the legal entity (legal person) can speak. Without bylaws, state statute typically prevails. Important issues that appear in bylaws include:

Membership: who are the members of the corporation? What rights, privileges and responsibilities do they have? What criteria must be met for membership? How are they removed?

Board of Directors: How many? How are they selected? How are they removed? What criteria must they meet to become Directors? How often do they meet? What is the scope of their duties, if not the entire scope of the corporation?

Officers: who are the specific officers in the organization? How are they selected? What are their basic duties? Is there a CEO / Executive Director / Senior Pastor / Senior staff person?

Meetings: how are they conducted? How does voting take place? What constitutes the passage of a resolution?

Amendments: How are the bylaws amended?

Dissolution: How is the corporation to be dissolved? Where do its residual assets go? (If tax-exempt, they must go to other 501(c)3 compliant organizations.)

3. Policies: Policies are the way that the organization is governed. For guidance on writing good policies, see http://www.carvergovernance.com/model.htm

Design Group International has experienced consultants available to help review and design these essential documents, and guide your organization through the process of developing them. Click the link below to continue the conversation with us!

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Topics: Matthew Thomas, Design Group International, Organizational Governance, Authority, Constitution, Bylaws, Policies, Carver, 501(c)3

Organizational Governance: Initial Authority vs. Final Authority

Posted by Matthew Thomas

In the Carver model of board governance, known as Policy Governance, the model’s authors make much out of the concepts of Initial Authority and Final Authority for the board to exercise.

Boards often rightly describe their role as being the final authority, using terms like “the buck stops here,” and “we are the ones ultimately responsible.” This is quite true, and boards that forget this are reminded when things go amiss or the organization slides into stagnancy.

As true as the concept of the board as final authority is (or in some membership systems, the members or the congregation), exercising authority as final authority only, as the last action in the decision-making sequence, will significantly reduce the organization’s capacity to carry out its mission, if not completely remove its capacity to take action to fulfill its goals.

If the board is the final authority in sequence, then staff always have to run to the board with all kinds of detailed proposals, which then the board reacts to in order to process the information. This typically leads to proposals receiving the dissection treatment, and staff often come away frustrated that big new ideas get dismantled and reassembled, but poorly, in committee or board meetings.

When the board acts as the initial authority, it can shape the policies and approach to new projects, short-lived opportunities, and expansion of vision. It also will increase efficiency. By stating clearly beforehand what the values are, what the goals are, and what the priorities are, with clearly defined board and staff roles and limitations on what cannot be done and how reporting should happen, the staff are then free to operate within those constraints and be as efficient and as innovative as the policies and constraints allow. This allows for staff to use their expertise to make decisions and engage opportunities as they arise, rather than taking everything back to the board for final approval. The board still monitors performance, but only to assure compliance with what it has already said. This way, the organization is empowered to solve the big problems for which it was formed in the first place.

Design Group International has Senior Consultants that specialize in governance for non-profits and churches. Click the link below to contact us to continue a conversation about how we might work together.

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Topics: Matthew Thomas, Design Group International, Organizational Governance, Authority, micromanagement, meddling, frustration

Organizational Governance: Warm Bodies on Your Board

Posted by Matthew Thomas

If you have served in the non-profit or church community for any length of time, you have likely run into a situation where the governing board of your organization (or one of its committees or sub-boards) faces open seats. By open seats, in this case, we do not mean merely the need to elect new people to fill positions. We are focusing on those gaps that appear between the bylaws- or constitution-mandated positions and the total number of actual bodies duly elected and seated. In other cases, the board elects enough people but then never sees certain people, despite their names being on the list.

In my experience, when an organization’s board reaches that point, it also has on its board at least one person – if not even a majority – who are board do-nothings. The absence begins not with those who don’t show up, or who don’t even volunteer in the first place, or don’t answer the nomination, but with those who are actually on the board itself.

Often, I have heard boards lament the fact that no one wants to help them, and they can’t find qualified people. Then, most of the meetings they hold are focused on the lament of “why can’t we get more people to do what they are supposed to do and HELP?!?” Board members feel like they are sacrificing for the cause, but no one else is stepping up. The problem is that, in many cases, their sacrifice is almost for nothing because they are pouring their energy into priorities that will not achieve their ends.

The empty seat, warm-body or theoretically-seated-but-never-present-member situation is often the fruit of long years of lack of clear vision clouded by micromanagement that cannot marshal the drive to win others to the cause or purpose behind the organization. In addition, it is a sign of a chronic lack of board discipline and fuzzy understanding of the purpose of governance.

Nevertheless, the status quo is often more comfortable than the risk of change, even in these situations. This situation has to be working for someone for it to continue – even if it is just to reinforce that person’s image of the larger problem the organization is tasked with solving.

Design Group International has consultants available to do a governance review – both bylaws and board process. Click the link below to contact us about how we might work together!

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Topics: Matthew Thomas, Design Group International, Organizational Governance, Board, Committee, Vacancy