This is a very important issue, and one that we encounter often in both non-profit organizations and equity corporations. Too many organizations attempt to put their boards to work without first adequately defining the board’s role nor its “rules of engagement” with those in management. First, you must determine if your board is advisory or fiduciary in nature. Many privately held companies have advisory boards – where the board gives advice to ownership and/or management, but is not really in a position of authority over management. Where there is a fiduciary board (as generally found in non-profits and publicly held companies), the board’s primary job is to govern. In such cases, management operates under the authority of the board. The job of governance boils down to ensuring that the organization does the right things in the right ways. That requires the board to: clearly articulate what the organization is to achieve; set parameters for how those results may or may not be achieved; clarify rules for the board itself; determine who will be held responsible for compliance with the board’s expectations, and insist upon systematic, credible monitoring data to address the expectations the board has established. We help boards (whether they are advisory or fiduciary in nature) clarify their roles, improve their functioning as a “body,” and interface more effectively with management — and ultimately bring more value to the organizations they serve.

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