Six Keys to Gold Medal GovernancePosted on August 26, 2020
Unlike the young athlete who dreams of becoming a champion, few of us grow up dreaming about joining a board of directors. Many people join a board out of a sense of duty to an organization with which they have been involved, or because they thought it time for new leadership, or were recruited for a specific professional skillset.
No matter the path taken to becoming a member of a board, it is important to realize that when you sit down at the board table or log into the board’s Zoom meeting, the board’s role is to govern the whole of the organization and this role has serious implications. Today, boards are governing in an increasingly complex sport system and facing big issues – safe sport, inclusion and diversity, and return to play in the context of COVID-19 and the associated financial and organizational fallout. Boards need to ensure they are ready govern effectively – to direct and protect their organizations in navigating these uncharted and turbulent waters. The bottom line: any board of which you are a member is 100% accountable for 100% of what happens in that organization. It would seem essential then that the board is very clear about what the job of governing involves.
What is required for effective governance?
The BSI 13500: Code of Practice for Delivering Effective Governance of Organizations published by the British Standards Organization in 2013 is generally seen as the best current articulation of what is required for effective governance. The BSI defines governance as the system by which the whole organization is directed, controlled and held accountable to achieve its core purpose over the long term. Given that the board’s role is to govern, its job then is to create and implement the system which delivers effective governance.
Much has been written in the last twenty years about governance. While details may differ from one author to the next, there are areas of wide agreement about what a board must do to govern effectively.
1. Act as servant leader
The board must understand its fiduciary role: It is a steward for those on whose behalf it is governing the organization. It must actively engage with these individuals and groups to whom it is accountable and report its governance processes to them. The board needs to ensure that the actions of the organization can be seen, reviewed and understood – we often refer to this as transparency. The board must act with integrity at all times. And, the board must evaluate its own process.
2. Set direction
The board, as the only body authorized to govern and the only official link to staff, must set organizational direction. In consultation with those on whose behalf it exists to govern, the board defines the organization’s purpose stating why the organization exists, what value it should produce, and for whom. The board needs to avoid the temptation to specify how the purpose is to be achieved. Instead the board hires an accomplished senior manager and needs to allow her/him, along with the organization’s staff, to apply the full scope of their creativity and expertise in formulating and executing plans that lead to achievement of the board-specified purpose.
3. Protect the organizational assets
Based on the direction or purpose of the organization, the board needs to identify the principal risks to the organization – financial, physical and intellectual property, information and data, image, credibility and future capacity – and the risk appetite of the organization. It needs to ensure that the management of organizational risk also takes into account the organization’s duty to society to operate in a sustainable, ethical, responsible manner. Then the board needs to ensure a risk management system is in place, that there is a sound system of internal controls to safeguard assets, and that it receives timely, verifiable information that assures itself that the specified protection exists.
4. Separate the governing role from the management role
The board should have a policy framework in which there is a clear division of responsibilities. The board governs, the CEO/senior manger manages. The board needs to ensure there is a clear delegation of authority from the board to one and only one senior staff person, avoiding the temptation to compromise the clarity of this delegation.
5. Assure organizational performance
The board delegates the management of the organization but it must ensure there are intentionally designed mechanisms through which it holds the senior manager accountable for achieving the direction that the board set and protecting the organization’s assets to the degree that the board defined as necessary.
6. Ensure leadership succession
The board needs a formal process to review senior management compensation and performance, ensure the senior management team is sound, and hire the senior manager when required. The board also needs to ensure its own succession and establish or inform the recruitment and nomination processes. This includes determining the desirable profile of its members – competencies, yes, but also attributes and character. The board should also ensure that it is continually learning to perform all six of the jobs described here better.
Many boards with which I have worked haven’t spent much time – if any – talking about what governance requires of them. Not knowing the full scope of what is required or not having the knowledge, skills or systems required to govern effectively can limit the potential impact of the organization in the lives of intended beneficiaries – athletes, coaches, officials, and volunteers. At its worst, it can imperil the organization’s future capacity to deliver those results.
Stay tuned for subsequent SIRC blogs in this series, taking a deeper dive into these keys to gold medal governance!
About the Author(s)
Rose Mercier, MBA, GSP, senior consultant with The Governance Coach has for the past 10 years worked exclusively in supporting corporate, nonprofit and public agency boards in Canada and the U.S. to achieve governance excellence. Rose worked in the Canadian sport system for 20+ years in program management, chief executive and system leadership roles. Rose’s extensive involvement in Canadian sport continued through consulting engagements with more than sixty national and provincial sport bodies. She was a founding mother of Canadian Women & Sport (email@example.com).