Policy Governance - Dr Richard Biery on Board Accountability

Newsletter on Governance and Leadership

July 1, 2004

How Can a Board of Trustworthy People Be Untrustworthy? (But It Happens All the Time!)

It is indeed common that we encounter unreliable boards made up of trustworthy individuals. How is this possible? We all know that dependability (and consequently, trust) is absolutely essential for a high performance organization. We would never tolerate unreliability in a senior management position. This phenomenon has a lot to do with the combination of our view of boards (and our personal role on the board) and group behavior.

Let me illustrate with a somewhat more understandable situation. I was visiting with a friend recently whose higher educational organization depends on government funds. He observed wryly that the previous political administration had made a promise (speeches, conversations, etc.), to increase funding in a certain area and the subsequent administration did not keep the promise. Although he had no contract, he still viewed the statement of the previous administration as a promise. To him, the “administration” was a perpetual entity (which it was), but its attitude was that the previous administration’s promise was not its promise. In the realm of politics we take this behavior for granted (though not approvingly), but nevertheless, view it as untrustworthy. It lacks reliability, and we are cynical.

So, too, a board is a perpetual entity (which is one important reason we use the board as a societal device for organizational top leadership). But the people on the board come and go. Because of that they do not necessarily perceive of prior stated positions as theirs, and they may not even be aware of such actions. Hence, they feel no moral obligation to pay attention to prior board positions because they didn’t make them, particularly if they don’t like them. Because they feel no obligation, they feel no need even to try to pay attention to and acknowledge such prior promises. In short, a board slips into the same behavior of which we accuse political institutions. Are we surprised that management frequently is cynical of board behavior while yet respecting the individuals on the board? We are puzzled by this duality of personality – of group behavior versus that of its individual members.

There is an interesting event related in the Old Testament where God permits a famine to occur during King David’s reign. When David inquires, God tells him it is because of a failed promise made originally by Joshua to the Gibeonites (who had even lied to obtain the promise), then was violated by Joshua’s eventual successor, King Saul, and the consequences were upon David’s kingdom! The promise was made by one leader and kept, broken by a subsequent leader, and the next generation leader incurred the consequences and was ignorant of it all! When David corrected the situation the famine was lifted. Apparently God saw the kingdom “Administration” as a perpetual entity that had continuing moral accountability, even though the individual kings had changed and had even been enemies!

Sometimes it seems we have the attitude that the board this year is not even the board of two years ago, (you may be saying, “It isn’t.”) Be careful of the next step which then says, “The actions, or comments, or positions taken (except written contracts) of that board are not those of the present board.” …”and therefore, neither are their verbal promises and agreements.” “We don’t own them.”

It becomes even more difficult for Management when a board fails to speak with a single voice. Management has to decide whether one board member spoke for the board when expressing an opinion or drawing a conclusion, and that person is no longer on the board …and now what is the board saying? …this dynamic gets added to the brew of untrustworthiness.

You may be saying, “Well, there may some truth to that, but most of our failures are lapses and not intentional.” Nevertheless, remember that the failure to strive to be consistent (and therefore reliable) over time and across changes in the board is rooted in the (often unconscious) attitude that what was said in the past is not our policy now. Therefore, what was then is not as important as the position we take, i.e., we remember our promises, and we don’t need to be diligent to remember and honor past board positions and inferred policies.

It is Management, by the way, that most notices board inconsistency and unreliability. Moral owners, unlike stockholders, hear little from the non-profit boards that governs on their behalf (except for thorough going Policy Governance® boards) and, although ownership could aid a board in keeping its memory and promises, it is not so engaged with the typical board. The typical nonprofit or ministry board has no acute sense of accountability to a larger ownership.

How to fix this phenomenon? The first step is a change in viewpoint, - that we are joining an on-going entity that has a moral obligation toward all its extant promises. Secondly, adopt a governance process that, as is humanly possible, enables the board to do that – stay reliable. Policy Governance, through the disciplined reflective use of written policies accomplishes that. Third, recognize and honor a sense of accountability toward a moral ownership. A board that feels an increased accountability to “owners” is more likely to strive to achieve behavioral consistency and therefore trustworthiness.

Richard M. Biery, M.D, 2004