What is the governor watching?

Someone started a LinkedIn discussion today with the proposition that the natural focus of Australian companies for their boards is statutory, financial and taxation compliance.  The question that followed was about the sort of director training and experience required. In the weekend I facilitated a workshop for an Auckland-based not-for-profit. Topic: Governance. Delivery by me: You need to know the law including your responsibilities and powers, you need to understand the money and you need to work out how you’re going to get the organisation to meet its vision through empowering yourselves and the organisation.

I can show you how to read the financial statements, I can tell you the law, I can suggest you the questions you might ask of each other and the management. And I did.  Where you’ll ensure that you become that special organisation you want to be  is to work out what you really stand for, what success will look like, how you will work together, and what you will do to make a difference in (this case) your community.

As I researched to make sure I had the latest material for the workshop I realised that most of the research about boards is about checking, monitoring, managing risk and compliance. Oh but you won’t go anywhere without that you will hear if you attend any training on governance in New Zealand (and by the sound of it Australia too). True, but I say that’s just the start. The men in suits are good at this, probably better than I’ll ever be – and it’s the context that makes it complex for sure – but if your board is focussed only on monitoring I reckon there are some key questions you should be asking:

  • What is in the board papers? Are they only full of reports that cover off the law and finances to cover your compliance requirements?
  • What is the order of the board agenda? Do we deal with monitoring first?
  • When you get to discussions about vision, strategy, culture or empowering the CEO is your head so full of compliance (and maybe you’ve had enough) that the energy is gone?
  • Will you really be creative at the end of a long session of ticking off stuff?

As a new board member you might feel very proud to be on a board.  You’ll be reminded to stay out of the operational matters. In doing so you might also be staying out of the very thing that you can truly add value, by encouraging an appropriate culture – sometimes paradoxically to your assumed role by encouraging risk taking – setting the scene by behaving in an open and inquiring manner, and bringing your focus on what management is doing to create leadership.

Even if you’re doing this your CEO – who will almost certainly have the tax, finances, legal requirements covered by functional experts – will recognise that not only is it his or her job to grow a team, but it’s what you’re watching too.

So if you spend your life as a director or trustee ensuring no-one including you gets sued, great, we need you. One or two per board will do. For the rest of the board, we want people who are going make the difference. The difference that started the organisation might be a place to start. Is the video clip below what you experience?



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