Governance Answer Blog

Can Provincial (State) Associations Really Work?

Introduction

Why would local entities come together to form a provincial organization? What could be the stated purpose? What is the real purpose of such an entity? What makes some people believe in such organizations while others think they are a real waste of time and effort?

Purpose

Some of the purposes are

1. Address Financial Issues
2. Complete Research
3. Deal with Common Labour Relations Issues
4. Expand Public Debate
5. Focus On The Future
6. Improve Provincial (State) Policies
7. Improve Specific Relationships
8. Improve Standards
9. Lobby
10. Provide a Forum for Common Issues
11. Speak With One Voice

A provincial association can only work effectively when specific conditions exist. These are:

1. Desire to work together
2. Belief in the common good and willingness to refrain from subversive behaviour which would destroy common efforts
3. Willingness to define the association’s mandate and common outcomes
4. Ability of the provincial organization to outline how each member organization will benefit
5. Ability of the member organizations to admit where they are now, what they are doing on their own to address the issues, and what they are doing to perpetuate the issues
6. Willingness to set deadlines and expectations that the provincial organization can realistically meet
7. Willingness to state the factors which would be deal breakers for the member organization
8. Willingness to share all known information and participate in the collection of new information to support the provincial association’s efforts
9. Identification of people or groups who need to be part of the process if the efforts are to succeed and refrain from intervening without the provincial association’s knowledge
10. Make and work the plan
11. Agree to hold on to the image of the goal as if it was already attained and refrain from interjecting new goals based on individual board’s needs
12. Make a decision to support the plan and never withdraw that support until it is finished.

 If the provincial association or any member association breaches these conditions, the provincial association ceases to be effective. It will move from issue to issue based on the topic that is important to a powerful few. The provincial association will become so political that it will not accomplish anything substantial and member organizations will lose faith in its benefit.

Member Obligations 

The member organizations have obligations. The chief obligations include ensuring the provincial organization

• has the resources it needs to complete the established expectations.
• does not become a whipping post when things do not happen as fast as any individual board would like to see
• does not become a scapegoat for an individual board’s deficiencies
• is not expected to accomplish a goal which is unrealistic and unachievable.

Responsibilities of Provincial (State) Associations 

The provincial organization also has responsibilities.  It is essential that it does not

• try to direct the members
• speak with a voice which is different from that desired by the members
• play politics with the member boards
• wander aimlessly and accomplish nothing of meaning to the member boards
• focus on issues which are not a priority for the collective, especially if it means taking resources from other agreed-upon efforts
• act as if it is in a superior position to the member boards unless its constitution and bylaws establish that relationship.
• promote ‘groupthink’ and provides an forum for open discussion and divergent thinking
• cater to the more powerful or larger boards.

The role of a provincial association is difficult. It may be dependent on member organizations for all or part of its funding. This means the members may feel that they should see things go their way. If they do not, they have no real reason to continue to support the association’s efforts.

For more information about association governance call 709-753-9935 

Are Governing Boards Good Communicators?

It is essential for governing boards to be excellent communicators. This means they have to make may decisions prior to engaging in any form of communication on a long-term basis. The best boards

1. have an agreed upon method for solving internal disputes
2. have an accepted method for resolving disputes with stakeholders
3. know what decisions are made by majority rule, 2/3 of a majority or by consensus
4. acknowledge and accept the decision-making power they assign to their executive committee, board chair or committees
5. outline when information is confidential and uphold that standard
6. know who makes what decisions and who announces those decisions
7. refrain from keeping items on the agenda month after month knowing that they have no intention of resolving the issues
8. priortize the agenda items to ensure decisions are made in a timely manner
9. identify what they need to communicate to each other
10. agree on the items which require consultation with specific stakeholders and what will be communicated.

More specifically, they answer the questions outlined in this diagram:

 The answers may be outlined in a communication plan which is designed by each board based on

• its own needs,
• the technological means available,
• the budget
• stakeholders' expectations,
• the roles assigned to the board chair, committee chairs, individual board members and the CEO
• the results of past evaluations which help determine the most effective means of communication, the best timing, and the number of times each message needs to be communicated before it is received.

Each board also needs to determine if it is going to use social media as a way of communicating with key stakeholders.

Open transparent communication is the key to the success of any board. It takes time to create a communication plan and dedication to ensure it is followed and evaluated.

 

Private Sector Involvement in Public Policy

The World Bank (2003), in a report titled Public Policy for Corporate Social Responsibility, states that

         Corporate Social Responsibility (CSR) is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve quality of life, in ways that are both good for business and good for development.

 If this is what democratic countries want, then we have to question the role of the private sector in public policy.  The difficulty arises when one accepts the notion that the public sector is quite complex. The issues and players differ from sector to sector (employment, health, education, justice, etc.).

What seems like an effective policy in one situation may be the opposite of what is needed in another situation. These contradictions and dilemmas face public-sector managers and politicians on a daily basis.  Also, public-sector entities which operate on a local, provincial and national level can be structured and operate very differently from each other. There are just as many differences in the private sector.

Private sector companies are very different from each other. Some are locally focused, while others are provincially, nationally or internationally engaged.  Companies can have different and competing interest which can increase the complexity of the private-public sector debate.

This does not mean that public-private dialogue is a critical avenue for the development and implementation of public policy.  This is especially true when public policy can influence a corporation’s civic responsibility and influence its global competitiveness. 

There are inhibitors to this dialogue. One is the beliefs held by both sectors. On the one hand, there are those who believe government should be run like a business. On the other hand, there are individuals who believe that the business community does not understand the complexities associated with public sector governance.  

Patrick E Mentore (Thursday, February 9, 2012) states that a

       Survey of Good Practice in Public-Private Sector Dialogue postulates that while policymakers and their professional advisers are responsible for policies and their implementation, they “do not have a monopoly on perspective, understanding, knowledge, and wisdom” (UNCTAD 2001:1). 

While one might agree with this statement, it is also necessary to recognize that the private sector has as many competing interests as the public sector. Open honest communication is necessary to ensure that all interests and perspectives are heard.

Both sectors have to be empowered to fulfill their governance responsibilities in a sustainable and supportive manner. The public sector may feel more of a responsibility for persons who are marginalized or underrepresented because it is not driven by the bottom line.  However, this obligation is not an excuse to avoid private-public dialogue.

Decision making is only as good as the voices which are heard, the comprehensiveness of the data collected, the attention paid to risks, and the desire for future success.

Do Companies Always Embrace Good Governance Practices

Facebook is going public. That isn’t really new for this sector because Groupon has already moved in that direction. One would assume that any company going public would want to be open and transparent, and that it would separate governance from management. Based on its Registration Statement it is evident that Facebook is not moving in that direction.

The current owner, Mark Zuckerberg, will retain a large say. All decisions will be heavily influenced by his wishes.  Zuckerberg is taking the stance that Facebook is a ‘controlled company.’  As such, it would not have to maintain a majority of independent directors on its board. Also, the board would not have a compensation committee or deal with other governance issues.

According to Reuters, the lack of a governance structure is creating an issue for the California State Teachers' Retirement System

          Facebook's corporate governance rules, which give shareholders little say in how the social networking website would be run as a public company.

 It is contended that

      The company's ownership structure and bylaws go against shareholder-friendly corporate governance practices put in place in the United States after years of investor activism. Reuters

 This structure is very different from the way non-profit and public-sector boards operate. These boards are expected to separate governance from management. This means that the board is independent from management. The board has a defined role and it evaluates its effectiveness as well as the success of the CEO.

All over the world groups are calling for more openness in government and private sectors, yet it is clearly possible in the democratic societies in North America to operate outside those standards.

Fear Stymies Board Discussions

Introduction

If you ask the board, “Are the members free to state their opinions?” the members would say, “Oh yes, we are open and frank with each other.” We know that the collective wisdom is often better than the judgement of any single person. That is why many boards make decisions by majority rule.

Unfortunately, group decision making can fail to meet the gold standard. This happens when any single board member or small group of board members is determined to dominate the decision-making process. In other words, ‘the person/group is determined to get his/its own way.’

This article looks at the subject of open discussion from different perspectives. Those include: board members who speak freely; board members who agree easily with those who appear to be influential; board members who wait to see what the dominant opinion is before they speak; and board members who remain quiet

 

Those Who Speak Freely

People speak freely for various reasons. These include:

• I have something to gain here
• I have something to lose here
• I know what is right in this situation
• That will never happen again as long as I am on the board
• This is what the people I represent want and I am going to let them know that I put their position forward as the best solution.
• I am the most knowledgeable on this subject and the others should listen to me
• I studied this subject closely and my opinion is important.

 People who take this stance want to be heard. They will observe their colleagues to determine who agrees with them. Some will contact their peers prior to the meeting to determine the lay of land and determine their tactic based on that information. They want the other board members to agree with them, leaving the basic tenants of their solution intact.

 

Board members who agree easily with those who appear to be influential

 There are board members who sit back, let others express their opinions and then instinctively mirror those opinions without really thinking about or valuing their own ideas.  It is important to those board members to be on the ‘right side of the fence’ so to speak. They place a greater value on being in the right place at the right time, and agreeing with the right people then they assign to their own value and position.

 

Board members who wait and identify the dominant opinion before they speak

 These board members listen and assimilate the dominant opinion. Gregory Berns in his article on Social Conformity stated:

              When individual judgment conflicts with a group, the individual will often conform his judgment to the group. Conformity may arise at an executive level of decision making, or it may arise because the social setting alters the individual’s perception of the world.

It appears that individuals activate the amygdala, a small organ in the brain associated with the fear of rejection. Thus it causes less stress to go along with the group then to stand out as differing from the group. They stay with the ‘in’ group.

 

Board members who remain quiet

Board members remain silent for a number of very good reasons. They

• think others find silent people more acceptable than opinionated people.
• do not fully understand the topic
• think others are well versed, and they do not want to appear stupid.
• would like more information and time does not permit it
• do not want to aggravate someone who they deem to have power and influence.
• need time to think and cannot do so with all the chatter.

The board chairperson and other board members may assume that silence means agreement. This is not always the case. The astute board chairperson seeks all opinions, identifies commonalities and differences, clarifies the data, and tries to bring the group to a consensus.

Unfortunately, most board meetings do not provide silent or thinking time. It is possible to incorporate it into a meeting if all board members are willing.

 

Final Comment

It is important for board chairperson to accept the different styles and ensure that all ideas are put on the table, all modes of processing information are accommodated, and all options with the associated risks are identified prior to making any decision.

Are Board Packages Useful?

There are several factors to consider when thinking about board packages. Some of these are

1. Preparation time
2. Costs
3. Usefulness and Relevancy
4. Practical value

 

Preparation time

 

Preparing board packages is a time-consuming task for senior administrators and their teams. The CEOs have to consider;

• The time frame since many boards want the packages a specified number of days prior to each regularly scheduled meeting, preparation time has to be scheduled
• Whether the data is being provided for information purposes, to seek advice from the board, or to assist the board during its decision-making process
• The specific details in the package to ensure the board can consider the
  •  risks,
  • political ramifications associated with the options,
  • how solutions support the achievement of the board’s plan, and
  • the fiscal realities,

         prior to making any decision.

 

Costs

 

It is important for each board to do a cost-benefit analysis of board packages? The costs include

• the time utilized to gather and prepare material,
• mailing costs or courier services,
• the purchase and maintenance of electronic equipment for boards which use paperless methods, and/or
• the costs of maintaining board portals which enable board members to access information directly from the board’s website.

 

 

Usefulness and Relevancy

 

It is critical to provide relevant information in a format which makes it readily accessible to board members. It is easy to copy lengthy reports or add them to the board website, however, that may not be the best approach. Many reports contain too much information which is not relevant during the decision-making process.  Board members need to know

• the issues
• background details
• the options (potential solutions)
• the pros and cons associated with each option
• all associated risks
• short- and long-term implications associated with each option, and
• the political landscape.

 

A large board package may look impressive. It may not be the most useful or practical for board members. The key is to make sure information is reliable and relevant.

 

Practical value

 

On the one hand, preparing board packages can be rewarding when it is clear that board members read the material, do their own research, and use information constructively during board deliberations.

 

On the other hand, it can seem like a thankless task for staff when board members

 

• never open their packages in advance of board meetings
• open the packages, read the topics and the summaries, and rarely read all the material because there is too much and they do not have the time to dedicate to the task
• read only portions of the material and ask questions which were already answered in the material
• read the information and focus on the minute details and use those to derail discussions or intrude in management territory

 

Boards need information. The key is for boards to discuss what their members need and the format which makes critical information accessible.

 

 

 

 

 

Separating the School Board's Role from the Superintendent's Role

One of the things I discovered during my six years of research is that it is important for each school boards to clearly outline its role and differentiate it from the role of its superintendent.

As noted in an article titled, A smart proposal spells out board-superintendent relationship for Seattle Public Schools in the Seattle Times, one superintendent is asking his board to do just that.

It is most unfortunate that a new employee of this stature has to propose to a board how his role differs from their role.

It is essential for all school boards to spell out their role, as well as the role of the chair of the board and committees. To support boards, this information is spelled out in the Decision Making Model of Governance. For more information on this vital area of policy development order these documents. 

One document describes the model in detail and the other contains 

forms which are laid out in an easy to follow format

 

 

 

 

 

Boards which follow the Decision Making Model of Governance have separated the roles. These boards consider topics such as

1. The Superintendent's General Responsibilities
2. Personnel
3. Policies
4. Professional Development
5. Reporting to the Board (risks, reporting requirements, etc)
6. Student Transfers or other student specific concerns
7. Role in Trustee Orientation

 The policies are clear, measurable, realistic, and relevant. Because they meet these criteria, the superintendent is free to articulate management policies, manage the school district, and focus on excellence in education.

These policies also protect the board because the board members are able to focus on their role and avoid the pitfalls which lead to board failures.

 

School Boards Have The Right To Tell Students Where to Attend School

Restricting where students attend schools is not an uncommom practice. School boards create zoning policies for many reasons. A few of these include 

• creating equal opportunity in all schools in their jurisdiction
• ensuring certain schools do not become centers for students students who challenge the resources in the system, and
• creating community schools.

Not everyone would agree with this choice, as seen in this statement:

         Supporters of school choice call for a public policy and enabling legislation which makes it possible for all parents, no matter what their socio-economic situation, to choose where to send their children to school. Thus the policy is better known as 'parental choice' in education. http://www.catholic.org/national/national_story.php?id=44461

It would be interesting to hear from board members about their policies and the rationale for their boards choices.

What is your opinion on this topic?

 

Poor Governance Practices Lead to Warning By Education Minister

In the past few years in Canada, we have seen school boards fired in Ontario, Nova Scotia, and Prince Edward Island. they were dismissed because they were not willing to play by the provincial government's rules and practice excellence in corporate governance.

As seen in the following statement, the Alberta Government is ready to take a stand with its school boards

             Education Minister Thomas Lukaszuk has said he will introduce new rules         requiring greater financial transparency by boards that will enable voters to better decide when trustees are worthy of re-election. Lukaszuk also told the Herald’s editorial board Monday that he was willing to fire trustees and appoint a new board in cases where dollars had been misappropriated and children had been adversely affected. http://www.calgaryherald.com/passes+governance+policy+vote+unanimous/6011335/story.html#ixzz1jrIr2QRa

Publicly-funded boards have to accept the notion that they are accountable to their legal owners, their provincial governments. This means:

1. Accepting the conferred mandates
2. Abiding by the policies of the government
3. Demonstrating transparency and accountability
4. Establishing and following measurable governance policies
5. Governing risks
6. Governing within allocated resources and practicing general accepted accounting principles
7. Evaluating the performance of the boards, the board members and the superintendents/CEOs.
8. Practicing open and honest communication
9. Working as teams and using harmonious problem solving strategies
10. Planning strategically outlining measurable goals and objectives
11. Meeting all reporting standards.

When a publicly-funded board begins to violate any of these governance practices someone is bound to notice. When they do, it is often too late. As the old saying goes "It is better to take your time and do it right the first time."

There are programs based on research with school boards to assist with the professional development of board members. Resources are available. Go to Free Articles and Newsletters to access those on this website or join our mailing list to receive our free quarterly newsletter. School boards in Canada can count on their School Boards Associations and the Canadian School Boards Association to support their professional development efforts. 

 

Board Chairperson is the CEO: Maybe the Board Needs a Lead Director

First when I began to look at the role of boards, it became clear that the combined role of board chair and CEO could lead to potential problems. Then when cases such as Enron were in the news, it became clear that some of the concerns were indeed justified.

Questions

Some of my questions are as follows

1. Who reports to whom?

2. How does the separation of governance and management occur?

3. How does the board separate the evaluation of CEO from the evaluation of the

chairperson (a person could be a competent CEO and not a competent

chairperson or vice versa)?

4. How does such a board adjudicate conflict between management and the board?

5. Who does another board member(s) consult when he has an issue with the CEO

or Chairperson?

6. Who is the neutral person designated to facilitate executive sessions and ensure

all voices are heard?

7. Who resolves conflict between the board and the CEO?

8. Who chairs executive sessions of the board when it is necessary to exclude to

the CEO?

It is necessary to answer these questions to avoid a situation such as the one described below.

An Example

The Globe and Mail reported on Thursday, January 12, 2012 (P. A6), that the Ontario Government removed the CEO/Board Chair and board of ORNGE  which is responsible for the air ambulance system. In this case the issues related to high salaries and other financial questions. These issues came to light after an investigation by the Auditor General and a team from the Department of Finance. These teams were unable to get answers to their questions.

Boards can avoid such a situation if they take constructive action.

Action Required

It is imperative for boards which have combined the position of Board Chair and CEO to have processes in place to govern the risks associated with such an arrangement.

What are your board's arrangement?