Think of your organization as a professional sports team. You have your talented players who are moving the puck up and down the ice and (ideally!) winning. Your CEO is the head coach, the authority in making those game-time decisions, as well as in executing the vision of the team. Then there is the board of directors, like the team owner who has a stake in the team’s success and a say in its strategic direction and management.
What happens when the owner laces up her skates and jumps onto the ice? What if she starts calling plays mid-game, or even mid-practice? It will be an organizational nightmare. It is essential that boards practice a “noses in, fingers out” approach when it comes to their role in governance.
The beauty of this phrase is its simplicity—and its imagery! It was born in the 2006 standout read, The Imperfect Board Member: Discovering the Seven Disciplines of Governance Excellence, by Jim Brown. In it, Jim writes, “The only way a board can responsibly do its job without meddling is by monitoring very well… They ought to keep their noses in but their fingers out!”
Here’s what that does not look like:
Joe, a member of a private club, just retired and had time to spare. He wanted to return as a board member. After all, who knew more about… everything club-related than Joe? But it isn’t quite a match made in governance heaven. Joe wants to talk about menus and tennis court scheduling, not target margins and capital project prioritization. He’d rather chat about the competency of staff than measurable performance feedback for the COO.
Joe has his fingers in. At this point, he’s all but in the kitchen, chopping vegetables and grilling steak, or on the court, telling the tennis pro what to do. He has a great deal of organizational knowledge, and clearly loves the club. But he has shifted from member to board member, and hasn’t shifted his focus to appropriately match his new role.
You may be a company leader—or you may be a Joe. In any event, the role of the board in effective board governance is to focus on directing the organization and protecting its owners (and stakeholders) through sound policies, rather than the actual implementation and execution of these policies. That’s the job for the CEO or senior leader. Let the players play and the coaches coach. Noses in, fingers out. The board offers governance, the management team manages.
Easier said than done—but it’s worth the effort. Let’s talk about how.
Jim Brown jokes (but not really) that greeters at Walmart receive more orientation than board members. And this is almost universally accurate! There is very little in the way of “onboarding” for this governance role, which, if you think about it, is staggering. Take the time. Share the strategic plan. Share policies and financial statements. Review the governance structure. Emphasize the importance of “speaking with one voice.” Discuss behavioural norms. Explicitly.
When those expectations are in place, stick with them. For example, when Joe starts going into detail on why the club should stop introducing so many vegetarian dishes, stop. Joe, let’s move this discussion outside this meeting.
When discussion strays from the board’s imperative, rein it back in. Is the operational matter with which Joe is so concerned being handled within the parameters of the appropriate policy/policies? Yes, no? This keeps the conversation at a high level—and it keeps the board’s fingers out of staff’s responsibility.
Reiterate that questions are not only an important method of monitoring, but also welcome. Questions should always point towards the board’s purpose, not away from it. Are the questions related to:
No? Let’s take that discussion outside the boardroom.
A good guiding, and grounding, question is, “What are the major risks our organization faces?” Ask this at least annually and follow up with, “Are we satisfied that these risks are being mitigated appropriately?” Again, if the talk turns to the details, turn it back to the policies.
Boards do have a responsibility to direct, and it is important for the senior staff person to honour that while engaging them in directional decisions. So rather than “We recommend X, Y, and Z” you might say, “Will we allocate capital spending to expand the restaurant or replace the bunker sand? Which of the three member due plans will help us achieve and balance our long-term goals?”
This does involve the board in that high level activity that is their mandate, and it also guides the conversation so they remain within the expected parameters (noses firmly in!).
Here is another area in which boards are oftentimes neglected: relationship-building. Yet, it is imperative that the boardroom have the same level of trust, transparency, vulnerability, and teamwork that you have worked so hard to instill elsewhere in your organization.
It starts from day one, with orienting and aligning new board members with not only board procedures and responsibilities but also cultural norms and expectations. Everyone needs to be on the same page about the work being done and how it gets done. New members are a great opportunity to notice norms that need changing and reinforce the ones that really matter.
Relationships can support efficiency and cohesion. When Joe joins the board, he might already know several of the people on the team. Now is the time to have conversations with him regarding the difference between being a member and a board member, what they’ve learned as board members, and the expectations. For someone who joins the board without all those relationships, building them is an important first step towards healthy team dynamics.
When noses and fingers are in the right place, board members (and leaders) also need to remember to keep their eyes and minds open. They should be looking for opportunities, welcoming challenges, and imagining a bright future for the organization. They are charged with overseeing and directing policy that steers the company forward into the future. This is a critical role; set them up for the utmost success by onboarding well, keeping the focus true, and developing relationships. Clear expectations will keep everyone’s noses in and their fingers out.