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What Makes an Exceptional Board?
Tuesday, August 2, 2016 6:35 AM

By Karen Houston-Johnson, VP, Credit Union Resources

Exceptional boards add significant value to their organizations, making discernible differences in their advance on their mission and vision. How, you ask, does a board rise to this level? Are there standards that describe this height of performance?

BoardSource, a national organization working to strengthen board leadership among non-profit and not-for-profit leadership, convened a group of governance experts. Together, they explored the characteristics of exceptional boards. Defining and analyzing their common traits and actions, they extracted the essence of what great boards do that is DIFFERENT and HOW they do it.

The result: The 12 Principles of Governance That Power Exceptional Boards. These principles define governance not as dry, mandatory compliance, but as a creative and collaborative process that supports CEOs, engages board members, and furthers the causes they serve.

Good governance requires the board to balance its role as an oversight body with its role as a force supporting the organization. The difference between responsible and exceptional boards lies in thoughtfulness and intentionality, action and engagement, knowledge and communication.

The following 12 principles offer CEOs a description of an empowered board that is a strategic asset to be leveraged. They also provide Directors with a vision of what is possible and a way to add value to the organization they lead.

  1. Constructive partnership. Exceptional boards govern in constructive partnership with the CEO, recognizing that the effectiveness of the board and CEO are ‘interdependent’. They build this partnership through trust, candor, respect, and honest communication.
  2. Mission driven. Exceptional boards shape and uphold the mission, articulate a compelling vision, and ensure the congruence between decisions and core values. They treat questions of mission, vision, and core values not as exercises to be done annually, but as statements of crucial importance to be drilled down and folded into deliberations.
  3. Strategic thinking. Exceptional boards allocate time to what matters MOST and continuously engage in strategic thinking to refine the organization’s direction. They not only align agendas and goals with strategic priorities, but also use them for assessing the CEO, driving meeting agendas, and shaping board recruitment.
  4. Culture of inquiry. Exceptional boards adopt a culture of inquiry, mutual respect, and constructive debate that leads to sound and shared decision making. They seek more information, question assumptions, and challenge conclusions so that they may advocate for solutions based on analysis.
  5. Independent-mindedness. Exceptional boards apply rigorous conflict-of-interest procedures, and their board members put the interests of the organization above all else when making decisions. They do not allow their votes to be unduly influenced by loyalty to the CEO or by seniority, position, or reputation of fellow directors or staff.
  6. Attitude of transparency. Exceptional boards promote an attitude of transparency by ensuring that members and interested individuals of the public have access to appropriate and accurate information regarding finances, operations, and results. They also spread transparency internally, ensuring that every director has equal access to relevant materials when making decisions.
  7. Compliance with integrity. Exceptional boards promote strong ethical values and disciplined compliance by establishing appropriate mechanisms for active oversight. They use these mechanisms, such as independent audits, to ensure accountability of the organization, and to reduce the risk of waste, fraud, and abuse.
  8. Sustaining resources. Exceptional boards link bold visions and ambitious plans to financial support, expertise, and networks of influence. Linking budgeting to strategic planning, they approve activities that can be realistically financed with existing or attainable resources, while ensuring that the organization has the infrastructure and internal capacity it needs.
  9. Results-oriented. Exceptional boards measure the organization’s progress towards mission and evaluate the performance of major programs and services. They gauge efficiency, effectiveness, and impact, while simultaneously assessing the quality of service delivery, integrating benchmarks against peers, and calculation return on investment.
  10. Intentional board practices. Exceptional boards purposefully structure themselves to fulfill essential governance duties and to support organizational priorities. Making governance intentional, not incidental, exception boards invest in structures and practices that can be thoughtfully adapted to changing circumstances.
  11. Continuous learning. Exceptional boards embrace the qualities of a continuous learning organization, evaluating their own performance and assessing the value they add to the organization. They embed learning opportunities into routine governance work and in activities outside of the boardroom.
  12. Revitalization. Exceptional boards energize themselves through planned turnover, thoughtful recruitment, and inclusiveness. They see the correlation between mission, strategy, and board composition, and they understand the importance of fresh perspectives. They revitalize themselves through diversity of experience and through continuous recruitment.

If you need assistance with strategic planning, leadership and board development, management and board succession planning or director self-assessment, OnBalance is here to help you with these important initiatives. To learn more about all of the products and services we offer visit us at www.curesources.coop/strategic_planning_consulting.html or contact Karen Houston-Johnson at khouston-johnson@curesources.coop, Howard Bufe at hbufe@curesources.coop, or Dean Borland at dborland@curesources.coop.