Presented & Facilitated by: Susan Meier

V.P. Training and Consulting – BoardSource&

Michael G. Daigneault, Esq.Senior Governance Consulting – BoardSource

Deliberating Differently: How Can Boards Make Better Decisions?

Agenda

ContextThe 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

Stewardship

Great

Significance

Exceptional Leadership

Context …

The Problem …

Board conversations are not as robust and effective as they could be

Boards appear to be “stuck” in a limiting frame of reference dictating how they should deliberate and decide

Both 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 decisions

This calls for a more thoughtful focus on how boards think and deliberate

This, 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?

Dysfunctional

Functional

Responsible

Exceptional

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?

Generative

Fiduciary Strategic

Governance as

Leadership

The Governance Triangle

Note: A “culture of inquiry” cuts across all three

The Fiduciary Mode

Board’s core work: Ensure legal compliance

Ensure fiscal accountability

Conserve organization’s resources, public stewardship for assets of the foundation

Evaluate CEO, hold leadership accountable

Oversee operations

Monitor results

Value-added Fiduciary

Oversight:

1. Can we afford it?

2. Did we get a clean audit?

3. Is the budget balanced?

4. Is it legal?

5. How much money do we need to raise?

6. Can we secure the gift?

Inquiry:1. What’s the opportunity

cost?2. What can we learn from

the audit?3. Does the budget reflect

our priorities & mission?

4. Is it ethical?

5. What’s the cost of raising the money?

6. How will the gift advance our mission?

The Strategic Mode

Board’s core work:Scan internal & external environments.

Review, modify & assist strategic plan/vision.• Develop the organization’s 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

Planning Thinking•Money, space, personnel?•Compensation plan?•Build on strengths?•Size of market?•What is? (Extrapolation)•Valid assumptions?•Can we see the future?•Traditional competitors?•Internal preferences?•Every 3 years?

•Business model viable?•Great place to work?•Victim of our virtues?•New markets? Competition?•What could be? (BHAGs)•Make new rules?•Do we understand the past?•Nontraditional competitors?•Donor value propositions?•Every meeting?

The Generative Mode

The Board’s 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.

What’s 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.

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.

What’s Different?

What’s 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?

Questions…

That 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 – they’re a gift!A culture that invites great questions must be rooted in genuine trust.

Trust – The Concept

A Contemporary Definition:

“Trust is one party’s 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 person’s 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 it’s a critical ingredient. We trust people who share appropriate levels of information, influence, and control.

-- M. Moran, Trust Matters (2004)

Trust – The Concept

• Reliability - It’s 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 don’t 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 Meetings

As most of the board’s 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

Pool of all possible data

Select data

Interpret data

Reach conclusions

Take actionMental Map

/ Deeply Held Belief

Mental Maps

Dangers of “Group Think”

Janis’ 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 plans

Irving 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 Awareness

1. Failure to see information

2. Failure to seek information

3. Failure to use information

4. Failure to share information

A 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 Inquiry

Questions 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 Ponder

Is 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 Practice

1. Actively foster an intentional dialogue about governance in your organization.

2. Conduct a “Board or Governance Assessment.”

3. Think in new ways (and ask good questions) by deliberating differently.

4. Establish or update your organization’s values statement.

5. Create a “Governance Committee” and charge it with improving governance throughout your organization.

6. Make sure board members know their responsibilities: legal, governance, regulatory & financial.

7. Evaluate CEO and board leadership annually.8. Empower you Board Secretary to improve

governance.9. Provide constant education concerning

governance issues and trends (much is changing!)10. When in doubt, in crisis or in transition – seek

governance expertise, counsel or training.

Next Steps? 10 Steps To Intentional Board Practice

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