Excitement of a WE Day event.
Good governance enables you to deliver great programs and services.

Board governance is a funny thing – at once very complex, and pretty straightforward. The ongoing situation with the WE Charity, with the flurry of stories emerging about its many oddities, certainly sounds complex.

And I worry that stories like these may dissuade people from joining boards or taking on leadership roles such as chair. It’s difficult to get great people to take on the responsibility and commitment of boards as it is.

So let’s use this still-unfolding story to highlight some relatively – deceptively – simple good practices that can help keep boards and organization out of a similar situation. Maybe you already have these in place, and you can feel reassured. And maybe there are some areas where you have some work to do – with a greater or lesser degree of urgency.

I don’t have any inside knowledge about WE; I’m just going by the news reports like everyone else. And they’re certainly an unusual organization in terms of their reach, their sheer size, and the ways they chose to operate. But some of the issues raised in this controversy are common, far beyond the WE empire.

What’s the whole point?

This starts, always, with your mission and vision. Why does this organization exist? What is its main purpose? If it didn’t exist, why would you create it? If your activities are disconnected from your mission, either you need to prune (more likely), or reconsider the mission itself (more rare, but absolutely reasonable) – so you need to keep it front and centre.

Know how you’re organized, and why

And then there’s organizational structure. Start here: you should know how everything meshes together well enough to sketch it on a cocktail napkin. If you don’t, ask more questions until you do. Be dogged about this; it should make sense to you. Ask questions that might make you sound dumb; any organization should be communicating its structure easily enough that a reasonable person can get it. Stick with this until it’s clear to you whether the issue was communication, or the underlying structure itself. And if it won’t fit on the napkin, it’s probably too complicated.

It’s not uncommon for a not-for-profit to have multiple related organizations, including social enterprises which are explicitly focused on more commercial activities. However, board members need to understand what the purpose of each organization is, and the relationships between them. And related-party transactions – where someone related to the organization conducts business (buying/selling) should be very rare and carefully scrutinized, using outside experts.

You should also understand there are costs and risks associated with multiple organizations (rather than just programs under one organization). Any structure has pros and cons. What are yours? (And a note: plenty of organizations have social enterprises without Byzantine structures.)

You should also understand your business model – how you make money, and what it takes to make that money, where you spend it. Again, it should be both understandable and understood. What makes you successful? How might that success be threatened?

If the organization owns real estate or other assets, you should understand why that choice was made. Ask whether that’s the right deployment of capital for this organization. What else could you do with that money?

The answers to all these questions should be embedded in your strategy, your risk management, and your reporting. And all of it should support your mission.

Understand – and play – your board governance role

First, know what the role is. Read through your foundational documents – articles of incorporation, bylaws, policies, anything else your organization has that outlines roles. Note how the role of the board is vs. staff is described, and what the specific roles on the board are (chair, committees, etc.) are. Pay attention to both the responsibilities and constraints. What does a particular role do, and what is delegated to others (which means accountability back)?

And then actually play your role. If the ED or CEO reports to the board, set performance goals and then conduct a performance review. Every year. No, really, every year, whether things are going well or not. (If you do that, great, but it’s surprising how many don’t, and that’s just one example of how roles are often not played.)

If you are the chair, and your role includes enforcing board participation, then you do have to deal with the member who never says a word. You have to figure out how to deal with members who don’t read the materials. It’s up to you to manage the meetings in a way that enables robust but respectful discussion, and it’s also up to you to take the lead on helping the board establish and live up to norms that make that possible. That’s a role you have to play, which chairs are often very reluctant to engage in. If you need training or some kind of support (e.g. coaching) to play that role effectively, ask for it; that’s perfectly reasonable too.

And all board members do have the role to oversee the operations. You are entitled to information to support you in that role. This will of course be tempered by wisdom that it takes precious staff time to produce reports. It may also have some confidentiality limitations when it comes to HR issues. But otherwise, your questions should generally get answered in a timely manner. Nose in, fingers out. You get to stick your nose into the business of the organization – not just because a reporter might ask you about it later, but simply because you need to understand it well. But fingers out – don’t meddle, don’t tell staff what to do. If you happen to see an issue, you bring it back to the board to discuss.

Don’t overlook “small” issues that matter

No organization or person is perfect, and mistakes will always happen. But when issues arise that show a disconnect with values, such as lack of integrity, or deceit, they should be addressed head-on.

I had a colleague once who had an employee who plagiarized, was caught, and was not fired or even disciplined. What happened next? Of course, he continued to plagiarize. (And who knows what else.) She had signalled to him that it was OK to do so. By her actions, she was prioritizing that he produced over whether he produced it with integrity. Why would he stop?

If you don’t address actions that are specifically counter to the values you want to see in the organization, you are telling the person doing them (whether they are a board member or the ED or CEO) that it’s OK.

These are difficult conversations to have, but that’s the job.

Know when to go

Sometimes the right move for a board member is to resign. You should resign if you feel you are unable to perform your duties for whatever reason. This would include if you feel you are not receiving the appropriate information after a clear request and a reasonable timeframe. This issue means you are unable to fulfil your duty of diligence.

You should also resign if you cannot in good conscience support a board decision. This is part of the duty of loyalty you owe to the organization, since the board should speak with one voice. If you can’t do that, it’s time to go.

Any time you join a board (or take a job) it’s wise to give some thought to the conditions under which you might leave. If you are involved with a challenged organization, you may wish to try to address problems you see. Good board members try to be part of the solution, and that suggests endeavour through difficult times. But that doesn’t mean that you should hang on at absolutely all costs. Resigning should always feel like something you are able to do, not a scorched-earth scenario.

Invest in board governance

A healthy board governance culture requires ongoing cultivation and support to remain so. Boards that sustain strong governance:

  • Recognize their own roles and responsibilities,
  • Talk explicitly about governance practices regularly,
  • Conduct self-assessments and sometimes external assessments,
  • Review their structures regularly,
  • Ensure new board members are properly oriented and that continuing board members have their knowledge refreshed,
  • Get external advice and support (e.g. from lawyers, auditors, accountants, governance consultants, and others), and
  • Generally show a commitment to reflective and open governance discussion.

Whether you are looking to tweak an already-solid board governance culture, or whether you need to embark on a journey towards developing and sustaining good board governance practices, you will have to invest time – and yes, sometimes money. It will have to be a priority.

It’s not rocket science. It doesn’t have to be overly complicated. It does require some strength of character, backbone, and common sense, but all sorts of people have that walking into their very first board meeting, and I bet you do too.

This discussion with various experts was a great overview of the issues regarding WE, hosted by The Good Partnership – highly recommended.

If you’d like to discuss how I can help you with your governance questions, including board development and training, organizational structure, or strategy development, please get in touch.

Photo of WE Day Vancouver 2012 by the US Embassy Canada. Used with permission.