I've given a number of talks to Boards, and am often asked: "What's our role?"
Board Policy documents use the word 'governance' -- but what does that mean?"
It's a big deal -- role confusion between the Board and senior management can weaken focus & alignment.
Once Purpose becomes fuzzy, we're in a heap of trouble.
In my experience, governance entails answering questions like:
- Has the Leadership team defined Purpose (True North)?
- Does Purpose align with the needs of the community & other stakeholders?
- Has the Leadership team developed a planning & execution system to deliver Purpose?
- Are there clear metrics with which we can assess progress & Leadership performance?
- Is the organization on track to achieve Purpose?
- Does the organization have a sound financial plan to support its activities?
Governance differs, therefore, from management which entails:
- Defining Purpose
- Aligning Purpose with the needs of stakeholders
- Developing a planning & execution system -- and a plan -- to deliver Purpose
- Developing clear metrics and tracking progress towards Purpose
- Developing a sound financial plan to support its activities
Management must manage, the Board must ensure that they are managing effectively.
Trust that makes sense.