Susan Mogensen 
May 12, 2016Three key points that emerged during this online discussion by the Xylem Group, Accountability – Dealing with the aftermath of failure, underscore the challenging nature of the role of a board of directors:
- Boards are ultimately accountable for organizational performance (or lack thereof).
- Board members can’t possibly know everything about everything.
- There are risks in everything an organization does (or does not do).
Boards traditionally address these challenges by:
- Involving themselves (individually or via committees) as much as they can within the operational side of the organization;
- Coming up with as many clever questions as possible and asking the CEO/staff to provide detailed information;
- Requiring the CEO to ask the board for its approval of various decisions and plans.
Unfortunately, these traditional methods often create inertia or diminished progress, a lack of clarity around who is accountable for which decisions, micromanagement, duplication of effort, and/or frustration and conflict between the board and CEO/management/staff.
While no human system could ever prevent all possible unfortunate events, what boards can do is to be very deliberate about establishing everything they need to know. One system that enables this clarity is Policy Governance. This simple set of ten principles leads boards to think through all they need to know to govern risk, including the risks of imprudence, ethics and illegality, as well as the risk of not achieving the results the organization should achieve.
For more information on how Policy Governance principles can help your board, contact us for a free consultation.
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