Susan Mogensen 
May 4, 2018Anytime a board member has a concern with operational situations or processes, they can take the following steps:
1. Check to make sure the underlying concern is covered (put off limits) by one or more Executive Limitations policies. Check for both broadly stated policies (e.g., the CEO shall not allow anything “unethical or imprudent”) as well as more specific provisions, and everything in between.
1. a) If there doesn’t seem to be a relevant or specific enough policy relating to the concern, a board member can propose a policy amendment to the board.
2. Check to see how the policies relating to the concern were interpreted. When was compliance with the policy last monitored? What did the board decide when last reviewing the reasonableness of these interpretations? Has the board’s opinion changed? (If no monitoring report has been received, when is one expected? Does the board need to request an urgent/special submission of a monitoring report?)
3. If the interpretations were deemed reasonable, check the evidence of compliance with the policy interpretations. What has the board said or agreed when checking the evidence for compliance with the interpretations? Has new information emerged? Has the board’s opinion changed?
3. a) For added certainty, if the board would like to see evidence from a different source, the board can change the monitoring methods used per the monitoring schedule, i.e., occasionally use the External and/or Direct Inspection methods to obtain the evidence aligning with the CEO’s interpretation in an Internal report.
4. If there are any issues with the reasonableness of the policy interpretations or the evidence, the board can choose from multiple options along a continuum of severity/urgency, depending on the risk and the situation. These options range from allowing the non-compliance issue to stand temporarily, to requesting a revised monitoring report bringing the matter into compliance, and continue all the way to CEO dismissal. Alternatively, the board could choose to change the policy.
5. Would the board as a whole like to see certain information from the CEO regardless of, or in addition to, what is provided via the monitoring process? If so, it should describe that information in its Executive Limitation policy, ‘Communication and Support to the Board,” (if it has one).
6. Would the board as a whole like to learn more about certain operational processes? If so, it can add the topic to the Board’s Education Plan and arrange or request a presentation on the topic at a future board meeting.
A note for CEOs: Understand that as board composition changes, policy interpretations that were previously deemed reasonable by a majority of the board might no longer meet that test. It is common for CEOs to fine-tune and strengthen policy interpretations where possible. This process is not easy, but the time/energy spent developing and reviewing interpretations and evidence should diminish over time.
A note for Board Members: Governing requires boards to direct (via policy), and then see to it that the direction has been fulfilled (via monitoring). Policy-making and monitoring are powerful mechanisms available to the board, alleviating any perceived need to ‘micromanage’ or to do the work of the CEO.
See also: The Ultimate Troubleshooting Guide for All Boards of Directors
and Understanding the ‘One Voice’ Principle
