Director Competency is a Trend
One of the most fundamental trends in current corporate governance is the upwards shift in Director competency.
On competency-based Boards, the expertise of the Directors mirrors the challenges and opportunities that the organization is facing. These opportunities and challenges could range from corporate governance and financial stability through to operating challenges like information security and industry innovation.
Strong Corporate Governance
In the past, the composition of many not-for-profit and association Boards directly reflected constituent representation. Directors were chosen based on their ability to speak for clients and members. There was also lots of regional representation, as regional differences were considered fundamental to good governance.
There are a couple of weaknesses with this approach.
First, constituent representation falls short of effective corporate governance. The role of a Board of Directors is to identify and mitigate risk, oversee strategy and performance manage the CEO. The Board does this on behalf of the entire organization, not just individual constituents.
Second, the knowledge and skills of constituent representation are frequently different from those required to oversee a sustainable, stable organization. There are many challenges an organization must overcome to survive into the future. Financially stability is one. There are many others, including meeting the needs of clients and members. Boards must have the expertise to identify and deal with these challenges.
Building a competency-based Board depends on both understanding the objectives of strong governance, then identifying and attracting the expertise required that reflects the challenges and opportunities the organization is facing.
Governance for the Future
I see that not-for-profit and association governance is changing. Traditional governance structures and approaches are being adapted and sometimes blown away by the impact of new threats and opportunities. The future depends on Boards that have the competency to meet this challenge.
‘Tell your story. Please tell your story.’
For the past year that’s what my advisers have been telling me. By ‘my story’ they’re talking about the story of The Canadian Hearing Society. CHS as it’s known is the brilliant, resilient, and incredibly dedicated organization founded 77 years ago to support the Deaf and hard of hearing in Canada. Today, The Canadian Hearing Society is the undisputed leader removing barriers to participation for the nation’s Deaf and hard of hearing. I’m fortunate enough to be its CEO.
Over the past three years, CHS has gone through a dramatic governance, strategic and leadership transformation. Lead by our Board of Directors, we’ve identified and eliminated risks; set a bold strategic vision for the future; and, attracted all-star leaders to make it all happen. Along the way there have been all sorts of challenges that any organization going through a transformation might expect to face – and perhaps a few they might not!
And our momentum keeps growing.
I hope you will read this story. If you are interested in governance, Deaf, hard of hearing and corporate transformations there is lots of neat learning here. I’m glad we wrote it all down! Here’s a quick sample. We’re proud of our impact!
- Counselling Services at CHS are comprised of three distinct and highly unique services: CONNECT Counselling, General Support Services and Hearing Care Counselling. In 2016/17, Counselling Services saw more than 6,000 clients, conducted more than 44,000 visits and provided more than 57,000 hours of service.
- CONNECT provides professional counselling services to Deaf and hard of hearing individuals of all ages, and their families, dealing with mental health issues, addiction, relationship problems, domestic violence or other serious challenges. The average clients’ age is 46 years old, 71% are Deaf, and 72% live in poverty.
- General Support Services (GSS) counsellors offer guidance, advocacy, support and counselling to Deaf and hard of hearing individuals who request assistance to manage everyday life events including completing government forms and developing strategies to cope with hearing loss. The average clients’ age is 49 years old, 66% are Deaf, and 75% live at or below the poverty line.
- The Hearing Care Counselling (HCC) Program provides free counselling services to help cope with hearing loss, improve communication with family and friends, stay active and involved and remain safe and independent at home. The average clients’ age is 82 years old, 94% are hard of hearing, and 61% are female.
Here’s a link to the story on our Canadian Hearing Society website.
A strong Board Chair can be the difference between flourishing in a CEO role and hating it.
What makes a strong Board Chair? I see several key attributes:
- understands corporate governance, including Board role and process
- understands the role of the CEO
- understands the business
- knows how to lead, make decisions, follow-up
- has empathy for the CEO and other Directors
- is available and easy to access when necessary
A Board Chair with these attributes is great for a CEO to work with. They keep the Board focused on its role while supporting the CEO in theirs. This enables the CEO to lead the organization at the operational level without interference.
‘Managing’ a Board Chair without these attributes can be a double-edged sword for CEO’s. The downside is too much time spent by the CEO on Board issues and corporate governance. It can also mean poor decision making and unfair demands on the CEO by a Board that is struggling with its role.
The upside is something that almost every CEO craves – direct input and influence over the Board’s direction, decision making and governance process. It’s true that poorly lead Boards tend to rely too much on their CEO for governance direction. That’s a desirable outcome for many CEO’s!
The relationship between the Board Chair and the CEO can make or break a CEO – and the organization. Making it work is the responsibility of both.