Wednesday, July 8, 2009

Current and Former Employees on Your Board

I believe strongly that the core of governance is informed oversight. In order to do this well, a board must balance a clear understanding of mission and program with the discipline of ongoing objective evaluation. A board must be able to know when to exert leadership, when to seek and accept leadership from executive staff, and when to seek and accept outside expertise.
But, above all, a board must act to the best of its ability to preserve the well-being of the institution with which it has been charged.

There must be a clear line drawn between those who govern and the governed. Boards frame the mission, determine compensation levels, approve human resource policies, evaluate the director, often take some role in the hiring process of key senior level staff, and set benchmarks for organizational performance.

When current staff are elected to their boards it removes the clear line and truncates the ability of boards to objectively fulfill their most basic fiduciary responsibilities. These staff are both governors and the governed. Where's the sense in that?

I'm also uncomfortable with former staff serving on boards. Even the best former staff members can have a stultifying effect on current staff. Former staff are a tangible tie to the organization's past and they can have a way of dampening future-focused perspectives. There will always be some board members who will routinely look past the current staff to seek the expertise of former staff members, now their peers. Why would any board sabotage their current staff in this way?

I also think that electing current or former staff to a board sends a public message that the board is unable or unwilling to reach beyond its innermost circle. The best boards are diverse and representative of the organization's community and constituencies. They reach out for talent, not in.

Great former staff can certainly make terrific contributions via committees and task forces, but keep them off the governing board.


Laura Roberts said...

I am also worried about the new trend to make EDs, CEOs, etc. voting members of the board. It's part of the corporate style governance trend that started with the shift from "ED" to "CEO" or "president"... at first I thought it was just about language, but this second phase of the shift is more troubling... not that I think EDs should be subservient, but they do work for the board, which has a critical role as fiduciary stewards. The paid staff's role is not lesser, just different.

Anne W. Ackerson said...

I agree. It seems so obvious to me that it's a conflict of interest -- even in the corporate world.

I've noticed that the directors of many performing arts organizations sit on their boards -- this seems to be a long-standing "tradition", probably mostly borne from the fact that these directors were the founders and they're doing double duty. Not healthy.