Governance – 10 things to consider

Governance can be a very misunderstood concept by those who aren’t familiar with it. Sadly it often isn’t that well understood by those who are serving on governance boards.

My first governance experience was as a the student representative on the Victoria University of Wellington Council in 2006. During my induction it was explained very clearly by Chancellor Tim Beaglehole that in our governance role we were not managers, and would not be involved in operations or employment matters. Further our role was to provide strategic leadership.

My time on this governance board was surprisingly enjoyable and rewarding. And judging by the job offers I got at the end of it (and declined, in retrospect probably foolishly) I managed to gain the respect of my peers.

Later in the time in the New Zealand union movement I sat on the national executives of three trade unions, the equivalent to a governance board. I also sat on the National Affiliates Council of the NZ Council of Trades Union. Also in my time in the Public Service Association I at times sat on temporary governance structures of projects or change processes. I also have been part of advisory boards or have had oversight of projects or campaigns in a governance capacity.

Governance boards serve two major purposes in my experience. One they are a check and balance on an organisations senior management team. Secondly they are there to set the overall direction for the organisation. It is very hard for people working in an organisation to do either of these, so a governance structure is in place to ensure this happens.

So what have I learnt and observed about governance:

1. Yes governance is not operations. The governance structures do not need to approve every stationary order, or be across every employment arrangement. Governance groups, particularly in the community sector, who have tried this have generally found themselves entangled in a messy situations. But…
2. Governance boards with no idea of what is happening on the ground, can make very poor decisions. If you have a governance role, you should be getting regular updates. These don’t need micro-detail, but should give a helicopter view with an overall picture of an organisation.
3. Too often the information from Management to governance boards is not the full picture. Many governance boards suffer from senior mangers or other influencers swaying decisions. This can be just as damaging as the problem highlighted in point 1.
4. A governance board’s size does not in itself correlate to how effective its output is. While a large group can be more challenging to handle, a small group who lack the relevant skills, experience or interest is frankly pointless
5. Having the right mix of people is crucial. Having lots of technical experts from your industry in governance roles may add value to understand the products or services delivered. But if thats all you have your governance board could lose sight of other issues – specifically product or service demand.
6. Also on the choice of team, having people with experience in a variety of sectors is good. But they need to a) understand and b) not only have an interest but a believe in the thing they are on the governance board for. People who turn up to some meetings and contribute little are not adding value, whatever their background.
7. Having stakeholder representatives can be valuable in my view. This view is certainly not shared by many. The reality is that having input specifically from the users (the customer, the student or whoever uses the product or service) and from the producers (the workers) can really help. Depending on the organisations there will be other stakeholders who could (should?) be included. If the users and producers input is ignored by a governance board, the quality of decision making will likely decline.
8. Governance boards often are made up with people who have been successful in business. Also they need to be people who have time to contribute. Middle age and retired white men, in my experience, tend to be heavily represented on governance boards. Some governance boards are paid, but many are not. So financial and time constraints limit involvement of those in full time work, or who have dependants. This is not me saying old white guys don’t add value, they do. I’ve work with some brilliant people on governance boards who are white, male and over 55. But with diversity brings different experience and perspectives. Removing barriers to participation may help bring in the people you need.
9. If you are on a governance board, speak up. And tell the truth. There is no point serving on a board if you are not going to contribute. And sometimes this means opposing the CEO, or the majority view on the board. It is possible to do this without just being a naysayer or alienating your colleagues. Key to this is to remain positive and respectful, whilst also telling it how it is (this takes practice).
10. If you are in a leadership position, either a senior manager on a governance group, take criticism. Also respect differing opinions, and foster an environment where people can question and challenge. Do not respond to disagreement by trying to remove the person who raises the issue. Most leaders would read this and think ‘of course.’ In reality many leaders struggle with criticism and disagreements (its not easy), and an automatic response is to try and silence the views you don’t want to hear.

In conclusion, no governance structure is perfect. No business or organisation is perfect. We should always try to improve things, but don’t pretend there is some magic formula for governance to run perfectly. The above considerations I believe will help make a governance board more effective. I have identified some of the most common mistakes or problems with governance structures. If your board is at least aware and taking some measures to help with the above, you’ll be much better off.