Gap 2: Pace | Beyond the Blazer
Getting the pace right at the governance level compared to the business level is a challenge for many CEOs and directors.
The pace of governance is the tortoise while business and day-to-day grind is the hare.
Often, I am faced with a board who wants to ‘help’ the CEO. The directors believe helping means rolling up their sleeves and helping the CEO manage the operation of the business. Doing work and being busy at the club or in the office feels good, so isn’t it the right thing to do?
The board’s role is much slower in pace, and while the CEO needs the board’s support, generally they don’t need directors’ operational ‘help’. Because the manager is busy managing, directors have the opportunity to do a lot more thinking. It is this pace that confuses some helpful directors; thinking and decision-making is slower. Research and fact-finding is slower.
Governance is the tortoise in a world that celebrates the busy-ness of hares, and it is the way of the tortoise boards ought to embrace. Maintaining a pace as the tortoise is equally valuable as the manager’s requirement to make much faster decisions within the strategic backdrop.
The Board meet monthly to make decisions and monitor the results of those decisions. Their key tools are the strategic plan and board policy. The strategic plan is reviewed at least annually to take into account key changes in the environment while robust board policy may be rarely altered.
The CEO activates the board’s strategic plan and reports of the results of those actions. Their key tools are their business plan, marketing tactics and workforce development plan. Plans, tactics and the needs of the labour force change much more rapidly. Responding to change and preparing for change take up much of the CEO’s head space.
This is a key difference between governing and managing. Both governance and management activities move at their own pace by their own route to arrive at the same destination. The destination is the strategic vision of the organisation. Without the stability of strategy and policy, CEOs response to change could be unsupported, a futile toil on barren ground or a repetition of old tactics that no longer yield results (e.g. we’ve always responded in this ‘safe’ way).
One key aspect to note, though, is the tortoise does not stand still. The tortoise is forever moving steadily along. Avoid using the analogy of the hare and the tortoise to argue for not making decisions or slowing the organisational pace down to barely breathing. The tortoise is not in a coma! It actually wants to get somewhere.
Further, the tortoise and the hare need to work together, not compete.
What are some activities that directors can do to add value to the organisation? Example activities that directors can engage in to add value include;
Scanning the macroeconomic environment to understand changes in the landscape – political, economic, social and technological – and writing a white paper for the board’s information and discussion.
Critically reviewing the board pack and asking the question, what is the strategic purpose of the information I am given, and can I request better.
Analyse historical annual reports from similar organisations and learn the financial narrative of different ratios.
Attending networking events to build relationships and increase the value of the organisation’s social capital. Networking is a long game.
Conduct extra research and planning on a difficult yet high-impact strategy.
Learn about risk reporting at the governance level and recommend changes to the board.
There are many more tasks I could add to this list. The point is that there is so much more to do at the governance level than carpet, complaints and raffles (the most common director-distractors in clubs, in my experience).
If you think, “I’m a director and I don’t want to do anything like the stuff in your list!” then I would strongly recommend you consider why you are on a board in the first place. I’m not being disrespectful, yet, speaking plainly, governance is a thinking-person’s role. You need the desire to think beyond the four walls of your organisation, entertain different scenarios in your considerations and see yourself as part of a wider and dynamic economy.
Learning, implementing strategically, monitoring and seeing the results takes time.