Deliberating Differently in the Boardroom

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A presentation about how the board might think - and deliberate - differently in the boardroom. Presented at BoardSource BLF.

Text of Deliberating Differently in the Boardroom

Self-Assessment for Credit Union Boards

Deliberating Differently: How Can Boards Make Better Decisions?Presented & Facilitated by: Susan MeierV.P. Training and Consulting BoardSource&Michael G. Daigneault, Esq.Senior Governance Consulting BoardSource

AgendaContextThe Problem A Proposed SolutionExercise: Silent StartThe Source - Principle 4: Culture of InquiryGovernance As LeadershipExercise: Questions and TrustThe Need for TrustBarriers to Creating a Culture of InquiryFostering A Culture of Inquiry Points to Ponder & Next Steps

Good

Success

StewardshipGreat

Significance

Exceptional LeadershipContext

The Problem Board conversations are not as robust and effective as they could beBoards appear to be stuck in a limiting frame of reference dictating how they should deliberate and decideBoth individual board member engagement and collective decision- making suffer as a result

A Proposed Solution Better questions, discussions and genuine debate will help a board move towards having a more meaningful dialogue and making more effective decisionsThis calls for a more thoughtful focus on how boards think and deliberateThis, in turn, reveals the need for fostering an authentic and sustained culture of inquiry at the board level

Silent Start Question:

What are the three biggest influencers of decision-making in your boardroom?

THE SOURCE12

Culture of Inquiry

Exceptional boards institutionalize a culture of inquiry, mutual respect, and constructive debate that leads to sound and shared decision making.Seek more information, question assumptions, and challenge conclusionsDraw on multiple sources of information and perspectivesEnsure all voices heardAdvocate for solutions based on analysis

Culture of Inquiry Is there a shared culture of inquiry that leads to better, more informed decisions within your organization?Is there a two-way appreciation of challenging questions? How much real candor is there between the CEO and board members? Between fellow board members?

GenerativeFiduciaryStrategicGovernance as LeadershipThe Governance TriangleNote: A culture of inquiry cuts across all three

The Fiduciary ModeBoards core work: Ensure legal complianceEnsure fiscal accountabilityConserve organizations resources, public stewardship for assets of the foundationEvaluate CEO, hold leadership accountableOversee operationsMonitor results

Value-added FiduciaryOversight:Can we afford it?Did we get a clean audit?Is the budget balanced?Is it legal?How much money do we need to raise?Can we secure the gift?Inquiry:Whats the opportunity cost?What can we learn from the audit?Does the budget reflect our priorities & mission?Is it ethical?Whats the cost of raising the money?How will the gift advance our mission?

The Strategic ModeBoards core work:Scan internal & external environments.Review, modify & assist strategic plan/vision.Develop the organizations resources and asset base.Advocate for the organization, build support within the wider community.Help develop & continuously clarify goals/objectives. Assess strategy performance via needs assessment, critical success factors, benchmarks, and competitive position.

Value-Added Strategic

The Generative ModeThe Boards Core Work:Sees current challenges in new light.Perceives and frames better problems and opportunities. Asks key questions!Acknowledges organizations are not always logical or linear.Discovers strategies, priorities, & realities.Suspends the rules of logic to tap intuition and intellectual playfulness.Encourages robust discourse not quick consensus.

Whats Different?Different Diagnosis: Limited purpose leads to limited performance.Different Mindset: Governance is tantamount to leadership.Different Definition of Leadership: Leaders enable orgs to confront and move forward on complex, value-laden problems that defy a right answer or perfect solution.

Whats Different?Different Way of Thinking: Playful and inventive as well as logical and linear.Different Notion of Work: Board frames adaptive problems as well as prescribes technical solutions.Different Questions: Catalytic & value-based.Different Practices: More retreat-like meetings, more smaller group teams, more technical work off-line, more board activity at the boundaries, different performance metrics.

Whats Different?Composition: Need board members Intellectual, Reputation, Political, Social Working CapitalAssessment: Directors and executives reflect on their ability to effectively do generative work together.How do our recent and past agendas compare?Where/when did directors work at the boundaries?How often has the board spotted generative opportunities?Is there a climate for robust discussions?

Exercise:Question:

How can a nonprofit foster the asking of better questions and a higher level of mutual trust among its volunteer and staff leaders?

QuestionsThat group dynamics are critical to success.The key is to foster a robust and genuinely participative exchange.Vital questions (fiduciary, strategic or generative) are not a burden theyre a gift!A culture that invites great questions must be rooted in genuine trust.

Trust The ConceptA Contemporary Definition:

Trust is one partys willingness to be vulnerable to another party based on the confidence that the other party is (a) benevolent, (b) reliable, (c) competent, (d) honest, and (e) open.

-- M. Moran, Trust Matters

Trust The Concept Vulnerability - Trust matters most in situations of interdependence, in which the interest of one party cannot be achieved without reliance upon another.

Benevolence - We lay the groundwork for trust when we have another persons best interests at heart. People trust us when they believe that we care about their well-being and will not harm their interests.

-- M. Moran, Trust Matters (2004)

Trust The Concept Honesty - This is probably the most common and fundamental of understandings when it comes to trust. We trust people who tell the truth.

Openness - Many people miss this facet of trust, but its a critical ingredient. We trust people who share appropriate levels of information, influence, and control.

-- M. Moran, Trust Matters (2004)

Trust The Concept Reliability - Its not enough to be trustworthy some of the time. We trust people who consistently talk the talk and walk the walk.

Competence - This is an integral part of what it takes to build trust. If we dont have the knowledge, skills, network, energy, and strength to do what the job requires, no one is going to believe we can be successful.

-- M. Moran, Trust Matters (2004)

Exercise:

Question:

What barriers or hurdles does your board face in developing a genuine culture of inquiry?

Structure of MeetingsAs most of the boards governance functions are fulfilled in meetings, it is imperative that they be designed to be productive, engaging and focus on substantive issues.Consent AgendaMeeting ThemesCalendar of MeetingsRetreatsPre-Reading/ReportsExpert Guests

Select dataInterpret dataReach conclusionsMental Maps

Dangers of Group ThinkJanis seven symptoms:Incomplete survey of alternatives Incomplete survey of objectives Failure to examine risks of preferred choice Failure to re-appraise initially rejected alternatives Poor information search Selective bias in processing information at handFailure to work out contingency plansIrving Janis, defined group think as:A mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members striving for unanimity override their motivation to realistically appraise alternative courses of action.

Authenticity Authenticity means that you act and speak with truthfulness or candor. You put into words what you are genuinely experiencing, thinking or questioning. This may be the most powerful thing you can do to build real trust and commitment with others over time.Source: Flawless Consulting

Bounded AwarenessFailure to see informationFailure to seek informationFailure to use informationFailure to share informationA phenomenon that occurs when cognitive blinders prevent a person from seeing, seeking, using, or sharing highly relevant, easily accessible, and readily perceivable information during the decision-making process.

Fostering a Culture of InquiryQuestions are welcomedDiffering viewpoints are encouragedUnwritten rules are explainedTimely information exchangesOpen communicationActively seek different viewpoints Tolerate ambiguityBrainstorm silently and openlyConsult outsidersSearch widely for information

Points to PonderIs there a shared culture of inquiry that leads to better, more informed decisions within your organization? Does the board enlist information from outside sources, such as articles, research, reports, or feedback from external experts or stakeholders?Are different formats used for board meetings, such as small group discussions, facilitated sessions, or outside speakers, to help the board address important issues?Is there a two-way appreciation of challenging questions? How much real candor is there between the CEO and board members?

Next Steps? 10 Steps to Intentional Board PracticeActively foster an intentional dialogue about governance in your organization.Conduct a Board or Governance Assessment.Think in new ways (and ask good questions) by deliberating differently.Establish or update your organizations values statement.Create a Governance Committee and charge it with improving governance throughout your organization.

Next Steps? 10 Steps To Intentional Board Practice

Make sure board members know the