We talked with eight CEOs of organisations ranging in annual turnover from £100K to £20 million to explore thinking on governance, and publish findings to stimulate useful debate. In the second of the series, the CEOs consider new ways of looking at governance, and discuss the crucial relationship between CEOs and their Chairs.
Theory and Practice
The Chief Executives recognised the responsibility of the board to determine the strategy of the organisation. However, it was felt that in some cases this was ‘theory’, while the practice was that the task fell to the senior management team. One participant pointed out the importance of the board’s role in recruiting and selecting the right Chief Executive for an organisation as part of the board’s contribution to strategic leadership.
It was suggested that the rules should change to allow the Chief Executive of a charity to be a board member, as they are in the private and public sectors. There was concern that, if the Chief Executive’s voice was not heard, board members could make decisions without full information. There was also concern that the growing focus on risk and compliance has led to board members feeling that risk management is solely the board’s domain, while staff clearly have a responsibility for managing risk throughout the organisation.
The Chief Executives were keen to take a fresh look at governance and find a new way of working. It was agreed that existing thinking and codes should be challenged and that the governance environment for all organisations has changed. There was general agreement that payment of board members, inclusion of executive board members, and Chair, Board Member and Chief Executive appraisals should be accepted practice in the new paradigm.
Developing understanding among the sectors was seen as a priority. There was agreement that public sector funders focussed solely on financial systems and administrative procedures, rather than asking really good questions about charity governance. Participants felt that public sector guidelines on governance were not right for charities, and that each organisation needed to invest time in developing a framework tailored for them, rather than trying to ‘live up to’ an external set of guidelines. It was agreed that boards need to tailor the structures and processes themselves, rather than being handed a model ‘off the shelf’. The importance of having a shared future vision of the organisation between the Chair and Chief Executive was discussed, and highlighted as something to which public sector funders should pay more attention.
All of the Chief Executives recognised the ideal Chair / Chief Executive relationship as being one of ‘critical friend’, and accepted the need for the board Chair to both challenge and support them. However, there was a feeling that often Chairs saw their role more as one of challenge than support. One Chief Executive described their experience of having a mentor for support, and it was agreed that this was a good way of meeting the support needs of Chief Executives.
When asked what the ideal board Chair would look like, participants felt that board Chairs were at their best when they were fully informed, decisive and confident in their role. Chairs who didn’t show these characteristics left a void, where it was unclear who was running the organisation, with the board, Chief Executive and funders all having overlapping, confused roles.
Participants felt that co-mentoring for Chairs and Chief Executives would be useful. There was a general recognition that it tended to be the most effective board Chairs that show up for events on how to improve in the role, while weaker Chairs tended to avoid helpful training and development opportunities. Participants agreed that all organisations would benefit from training and development for board Chairs, recognising how important the role was for leading an effective board.
So our charity CEOs were keen to explore modern governance further, exploring options for a ‘new paradigm’ and looking for new ways of accessing tailored training and development to further improve relationships among board Chairs and Chief Executives.
Joy Allen, Leading Governance