Many accounts of how boards have responded to the COVID-19 pandemic highlight a closer than usual collaboration between boards and their management teams. The nature of the crisis has required ‘all hands to the pumps’ in many organisations and has forced the usually accepted division of labour to be set aside in the short-term interests of survival. This has seen many board members rolling up their sleeves and becoming a de facto part of the management team.
Board members can be a valuable source of advice and assistance for the chief executive and staff at any time, but especially in a crisis when making the best use of all available resources is vital. It is often necessary to set aside role formality, hierarchy and status differences to access board members, many of whom have extensive executive experience themselves. Older directors have often gained hard-won experience, for example, in past economic downturns. Having everyone pitch in can add significantly to the energy, flexibility and speed of decision-making needed to survive a crisis. It can also create a satisfying sense that ‘we are all in this together’.
But crises pass. Many boards are now thinking about what their pandemic response experience might suggest as a better ‘new normal’. As part of this, some are undoubtedly considering the benefits of having a different kind of working relationship with management. However, it should not be assumed that what worked (and was necessary) during a crisis will work just as well in ‘peacetime’.
A particular point to be conscious of is the need for absolute clarity between respective board and staff roles and responsibilities. Whether in a crisis situation or not, one constant risk is that directors’ advice can be experienced or interpreted by employee recipients as instruction. When that confusion happens, the essential chain of accountability (board-chief executive-staff) is at risk. For example:
- Staff members on the end of individual directors’ advice are unsure as to its authority.
- Staff members receiving contrary advice from different board members face calculating whose advice they can least afford to ignore.
- Faced with advice they know to be contrary to their own experience or their best professional judgement, they are uncertain—even fearful—about the consequences of not following that advice.
- When different board members offer conflicting advice, the board's collective authority is fragmented and undermined.
If board members are conscious of these risks, they may be wary of crossing the boundary between governance and management, and reluctant to offer valuable and timely advice when it would be helpful.
Basic principles in the board/staff relationship
For a fully effective board/staff working relationship, nothing good comes from this kind of hesitancy and confusion. However, an understanding of some basic principles (and the disciplined application of them) can easily prevent the problem from arising.
This sits primarily at the board/chief executive interface and should embrace the following principles.
1. The board should issue instructions only to the chief executive
A governing board usually has only one employee (the chief executive). It should not instruct staff reporting to (or through to) the chief executive. They work for the chief executive, who is accountable for marshalling staff resources to meet the board’s expectations. When a board instructs other staff, it assumes some of the chief executive’s staff management responsibilities and prerogatives. This means the board cannot then hold the chief executive accountable if its directions to other staff are misinterpreted or misfire in some way.
Unless board members understand the difference between instructing (which only the whole board can do) and advising (which anyone can do), even the chief executive can become confused.
2. The board should express its expectations and instructions only as a full board
The board should always speak with one voice when instructing the chief executive, although the final decision on what the instruction is, like other board decisions, need not be unanimous.
The one-voice principle, while readily agreed to, is often undermined. For example, in many organisations, the board chair is considered the ‘boss’ of the chief executive, disregarding the fact that the chief executive works for the board as a whole. This diminishes and detracts from the collective responsibility of the board.
When a board struggles to speak with one voice—whether issuing instruction or advice—the chief executive is inevitably pulled in different directions.
The possibility of weakened accountability and confusing communication significantly increases when these two principles are not clear and consistently applied.
If individual board members have no authority over the chief executive or staff and cannot instruct them, is giving them advice acceptable?
Advice or counsel from a single member of the board is in order, as long as the recipient has no obligation to take the advice or even give it a hearing.
Recipients of advice are implicitly accountable for what they do with that advice. The board should therefore be explicit that recipients may accept or reject advice from any source on its merits—including when it is offered by the board as a whole or by directors as individuals.
This seems simple enough but dealing with advice from a board committee may be more problematic. This is, in part, because some board committees are explicitly set up to match specific operational (i.e. staff) functions and to monitor, advise and assist staff in relation to those functions (e.g. personnel, public relations, marketing, finance, etc.).
It is difficult for staff to ignore advice from a formally established board committee even if the committee's function is only ‘advisory’. It is equally difficult for members of such a committee to remember that their deliberations are to produce advice and not to make decisions or give instructions.
Committees established mainly to advise and ‘help’ staff actually compromise them. For example, staff members will likely be reluctant to tell such committees that their advice is unhelpful or that staff time taken up by the committee costs more than the committee’s advice is worth. Nor is it easy for staff to tell an advisory committee that they prefer advice from another, often better-qualified source. So, when the board sets up a committee to advise staff, staff have three basic options:
- to assume committee suggestions are, in effect, instructions and that, when they do as suggested, the board is taking responsibility for the consequent outcome
- to pretend that they value the committee's suggestions and are following them
- to ‘manage’ the committee so that it ends up giving advice that suits what staff were inclined to do in the first place.
For these reasons, a board should establish committees only to advise itself, not to help staff discharge their responsibilities.
A lack of clarity of decision-making rights is at the core of many board/staff working relationship issues. It is up to the board to be clear which decisions it reserves to itself and which it delegates to the chief executive.
For the latter, the chief executive (and thereby staff) should have total control over all processes for procuring and applying the advice they need, including from individual board members or the board as a whole. The chief executive and staff should be able to put together any advisory arrangements they wish. They should be able to retain or release advisors at their initiative. This level of authority ensures that the chief executive is always accountable to the board for performance no matter where she or her team obtains the advice they need.
Following these principles means that board members must take their board ‘hat’ off when advising staff. This not only frees staff to treat board member advice on its merits but empowers board members to offer any advice they deem appropriate. They can do so without feeling that they are meddling in or compromising decisions that have been delegated to staff.
Board Works Role of the board, Covid19
Author: Graeme Nahkies Published: Apr 27, 2021
Understanding and respecting the difference between advising and instructing » Boardworks