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A Board Committed to “Getting it Right”

By Lori Prospero, CAE

A key role of the Chief Staff Officer, or Executive Director, is to support the board in its governance practices. Since joining the team at Owl Child Care Services of Ontario, we’ve been on a 10-year journey towards governance excellence. In my early years at Owl, much time was spent working with the board to understand various governance models and to choose the right one for the organization. From there, the focus shifted to implementation – ensuring that we had strong policies and procedures, shared understanding, and that we were effective in our governance practices.

The implementation phase took several years. We built up a strong set of governance policies and procedures and worked diligently towards shared understanding of the unique roles and responsibilities of both the Board of Directors and Chief Staff Officer.  As we went, we identified promising practices that could assist us. Here is an overview of some of the promising practices we’ve put in place to ensure effective governance:

1.      Disbandment of the Executive Committee

We realized early on that that the Executive Committee was more of a hindrance than a help. While it was intended to provide a mechanism for advice for the CSO and to assist when a quick decision was needed, we realized that it had a negative impact on the overall board. It led to some directors being in the know and others feeling like their job was just to rubber-stamp things the Executive had already decided.

Once this was realized, the Board engaged in courageous discussion and took time to reflect on how the Executive Committee had been used in the past. As it turns out, rarely is there a need for such a quick response that there is not time to consult the entire board. With good planning and foresight, it was agreed that eliminating the Executive Committee was the right move for Owl.

Since its elimination, overall board engagement has gone up and I’ve not noticed any true impacts on the way that we do our business.

2.      Streamline Communication

Without an Executive Committee, we are always looking for ways to streamline communication. Recently our board has investigated two options to streamline communication. One was a portal specifically designed for not-for-profit boards of directors. This board portal markets itself as a secure, paperless software or app that allows you to communicate with board members, share documents, annotate meeting minutes and more without any of the risks or waste that a paper board book provides.  It includes features such as an online board book, scheduling, surveys, polls, document library and so much more. The cost for 1 – 20 users was about $7,000 per annum. The other tool we investigated was not nearly as robust. It was a simple project management app that would allow us to set up an unlimited number of teams and/or projects. For each team or project, the app provides the following features: chat area, message/discussion board, document library, schedule and to-do lists. This app was available at a rate of $1000 per annum, with 50% off for not-for-profits.

There were many features that the Board liked better about the board portal, but in the end, due to cost, they decided to trial the project management app. It’s been a few months now and so far it’s been a good investment. It was easy to set up and to invite directors to the various teams they belong to. The response from our directors has been positive with full participation from the entire board and our committee members. That being said, the average age of our board is 42. If your board has a higher average age, some training may be required to increase confidence and engagement with such a tool.

3.      Informed Recruitment and Onboarding Process

One of the key contributors to strong governance is to be open and transparent with expectations during the recruitment and onboarding process for new directors. We’ve moved past the “bum in seats” attitude that many associations get stuck in and are not afraid to be clear and upfront with potential new directors. We speak honestly about the time commitment and outline our governance structure during the recruitment campaign.  Our nominating committee does a short phone interview with each applicant where they discuss motivation for applying to the board, work-life balance and their ability to devote the time needed to the role of director.

Once elected at the AGM, the nominating committee presents each new director with a copy of “The Imperfect Board Member” a book by Jim Brown, that showcases the Governance Excellence Model that we’ve adopted. Two weeks later, the full board meets for board orientation – a mandatory session where various directors speak to our governance model, present case studies on governance versus operations, and introduce the CSAE BoardREADY card deck as a tool we’ll use to engage the board in strategic thinking.

4.      Governance Monitor Role

Earlier on in our governance journey, it was suggested by a consultant that we create a governance monitor role. This informal role on our board is typically assigned to a director who also sits on our governance committee. At each meeting of directors, the governance monitor has 3 flags or cards (red, yellow and green). The meeting starts off with the green card on the table. As the board meeting continues, the governance monitor’s role is to keep the discussion focused on governance. If discussion starts to stray towards operations, the governance monitor will put out the yellow card. This is a visual cue for the board and quietly redirects discussion to a higher level. At times, the discussion may continue and when that happens and discussion is clearly at an operational level, the governance monitor will drop the red card. Again, it’s a visual cue, but now it’s a prompt for the chair to redirect the discussion. While this role is specifically assigned to someone, the entire board is aware that any director could ask that the yellow or red card be played.

The value in having a director assume this role is that it takes the pressure off the Chief Staff Officer so he/she doesn’t feel that they are the only ones identifying such issues. This has lead to a more positive relationship between the board and CSO. It also creates another leadership role – albeit a more informal one – for a director.  As we’ve progressed in our shared understanding of governance, the use of the yellow and red cards has been significantly reduced.

5.      Policy Compliance Monitoring

The most recent governance practice that our board has focused on is how the board monitors compliance to governance policies. Oversight is a key function of the board but often is one that most directors struggle with. How does the board monitor compliance to governance policies when they are not in the office each and every day? In some cases, they may never see concrete evidence of compliance. After revisiting this discussion for a couple of years, the board decided to make this a focus of its annual board development day. In the past we had worked with a governance consultant to fine tune our board recruitment, selection and onboarding process and now turned to this consultant to assist us with this new but equally important topic.

The consultant had reviewed all of our governance policies in advance of our session. She took time to identify where governance and operations collided in our governance polices (e.g., when a governance policy had the board directing other levels of management) and where current gaps existed.

In our day together, the consultant first had the board work in small groups to review each governance policy and identify where monitoring provisions already existed within the policy. She also asked them to identify policy statements where the board had difficulty in determining how best to monitor for compliance (e.g., general executive constraints, staff treatment).

Next the focus shifted to the various methods the board could use to monitor compliance to board policies. The Board has the right to use any of the following three (3) methods to ensure compliance – and should do so where appropriate.

  • Internal Report from CSO (e.g., request a statement from the CSO confirming that he or she is in compliance with stated policy). This is mainly used where it is difficult to find direct evidence of compliance. In these cases, a statement from the CSO is considered the Board’s due diligence based on the reasonable person test.
  • External report to the Board by a disinterested third party
  • Direct Inspection by the Board of documents and records.

This discussion proved invaluable. The board wanted to be sure that it was meeting its legal duties and responsibilities but struggled to figure out how to assess compliance in some cases. Being able to discuss – as a whole board – when it would be appropriate to accept a statement of compliance from the CSO in place of direct evidence proved to be the turning point in our discussion.

Out of this session, the Board created a new Monitoring Policy Compliance policy with an accompanying monitoring schedule. Every governance policy requires a compliance report to the board at least once a year. At every board meeting, I now submit for discussion up to three compliance reports. 

In considering all of the promising practices that we’ve put in place at Owl, one stands out as being the most significant – the focus on policy compliance. Not only does this new process provide a framework for monitoring compliance, it also builds trust and shared understanding between the board and the CSO. In addition, this forms one piece of the CSO performance evaluation so it also streamlined that process.