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Culture -- The Holy Grail of Good Governance

Posted by BoardSource on Aug 15, 2014 9:42:41 AM

photo (4)By Michael R. Vanderpool, principal, Signature Success LLC

This is the third in our series of posts written by nonprofit leaders who will be presenting sessions at the 2014 BoardSource Leadership Forum on October 9 & 10 in Washington, D.C. We hope you will be joining us.

For many years, boards have been on a mission to do a better job of governing. There has been no shortage of ideas as to how to make this happen. Yet, the quest continues as board members, board chairs, and CEOs look for the magic bullet of great governance. Having served on more than 20 nonprofit boards over several decades, I have observed and participated in this journey. And what I have learned is that the answer is not better by-laws, more dashboard reports, or more detailed conflict of interest policies. The best way to significantly improve governance is to change the way boards think, work, and act. In other words, to become the best possible leaders they can be, boards need to change their culture.

Board culture drives governance. Yet, in my experience, few boards spend any time thinking about their culture and even fewer understand what a good culture looks like. As a result of having advised and served on a wide variety of boards, I have found that really great boards have cultures with four characteristics. They are strategically focused, well-trained, active, and results oriented. They have what I call a STARBoard culture. These boards transform themselves into a high-performance team, and it is this high-performance culture that drives great governance. Patrick Lencioni in The Five Dysfunctions of a Team calls this teamwork “the ultimate competitive advantage both because it is so powerful and so rare.”

What do these high-performance teams look like in the boardroom? STARBoards are focused on the future and ways to constantly improve the organizations they govern. The board members clearly understand their role and the business model of their entity. Board meetings are full of purpose and energy and engage the talents of each member. Most importantly, the board encourages, supports, and demands real results. When these elements coalesce, the result is a highly effective team that truly provides excellent governance.

For this reason, the process of developing cultural awareness and engaging in culture-altering activities should be at the top of every board’s to-do list. Cultural awareness starts with an understanding of the board’s current culture. This can be determined by using a cultural assessment tool. With this information in hand, the board must do three things:

1. The board must actively decide what type of culture it wants to develop. What will it look like? What values will the board see being expressed?

2. The board must formally commit to change. The change leaders must paint a clear picture of how the new culture will make the organization better. It is critical that the entire board commits to becoming a high-performance team. Without this commitment, the transformation will fail. The CEO, board chair, and key members of the board must lead the effort. Connor and Smith put it this way in their book, Change the Culture, Change the Game. “Cultural changes must be led. You can’t delegate the initiative to human resources, organizational development or anyone else…[The board] must maintain ownership of the process…” While I agree with this, the reality is that few board leaders are culture change agents. Boards typically need outside help with the technical aspects of change — which leads us to the third leg of the journey to good governance.

3. The board must change its processes. Process feeds culture, and culture dictates process in reinforcing loops. Only by changing their processes can boards initiate and sustain cultural change. Fortunately, the studies of emotional intelligence, social intelligence, and small-group dynamics provide a foundation for developing new board processes.

Cultural awareness, a commitment to change, and execution drive transformation. All are necessary if a board is to become the high-performance leadership team that is a STARBoard. Having created this cultural foundation, boards can truly go about the important work of good governance. With the right culture, boards can and will become the leaders our nonprofit organizations need and deserve.

Michael R. Vanderpool is a principal in Signature Success, LLC, a board consulting company. He is also a business attorney and an adjunct professor in the School of Management at George Mason University. He will be presenting a session titled “Custom Designing a Better Board Culture” at BLF2014.

Topics: BoardSource Leadership Forum

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