The True Nature of Hierarchy and Authority

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Have you ever felt powerless in the face of an apparent top-down power structure?

Maybe the way we think about hierarchy is upside-down.

When people picture hierarchy, they commonly imagine something like this:

…With a CEO, or Chair & CEO at the top, a board of directors maybe off to the side, then senior managers and staff.

Power structures are inevitable. What’s missing is understanding the true source of authority in organizations, whether it’s a company, a nonprofit, a legislative body, or other type of public institution.

A CEO or Executive Director is not magically powerful because of their personality or background. Authority or power in any type of organization flows from the people in a legal or moral ownership position.

For example, in a company, the owners would be the shareholders. In a government, the owners would be its citizens. In an association however, it could be the members -or- people who value its mission.

Since these people are not usually in a position to make governing decisions directly, they elect or appoint a board of directors or legislators to make decisions on their behalf.

That authority flows from the owners, who influence the governing body, which then usually delegates to a CEO. The owners have causal authority, the board has directing authority, and the CEO has operational authority.

All that’s needed next is a system for translating the values of these owners into organizational performance.

Think back to the end of Wizard of Oz when Glinda told Dorothy that she had the power to return home all along.

Well, when we look at public institutions and corporations, people have far more power than they realize.

I’m Susan Mogensen of Brown Dog Consulting. To learn more about good governance principles, visit browndogconsulting.com.

See also:

• “The Ups and Downs of Hierarchy,” by Susan Mogensen, published in Board Leadership No. 91 (May – June 2007), and
• “Hierarchy: Necessary but Not Necessarily Evil,” by Susan Mogensen, published in Board Leadership No. 98 (July – August 2008), and
• Policy G: Take it from me! Podcast Episode #6, “Hierarchy.”