Tip #23 All Boards Should Watch Out For These
All boards should watch out for the unintended negative impacts that our organizations may have on other organizations and on our communities.
Recently I attended an exciting international governance conference in a great conference location - the annual conference of the International Policy Governance Association in San Diego, California in June. The keynote speaker was Dr. Victoria Hurth (Faculty of Business with Plymouth University in England). She challenged us to break out of our usual thinking patterns and apply a systems thinking perspective to the board governance of our individual organizations.
This perspective recognizes that our organizations are interconnected (and becoming more so) and are parts of larger societal systems. Our organizations often impact each other and our broader society. Sometimes these impacts on other organizations and on society are unintended and sometimes they are harmful. According to Dr. Hurth, "If companies had to pay for the full environmental costs of their production, they would lose 41 cents for every US $1 in earnings on average." (KPMG, 2012) Sometimes our public and non-profit agencies may duplicate one another's services and even work at cross-purposes. (Sometimes even divisions and departments within organizations may work at cross-purposes as well.)
Having worked in the field of alcohol and other drug addictions for many years, I cannot help but be struck by the limited coordination of public and private organizations addressing such problems. Working towards alignment of such disparate organizational approaches seems well worth the effort.
While it may be difficult to identify potential and actual unintended negative impacts by our organizations, it seems quite important to broaden our horizons (beyond a limited focus on our own organizations), become more sensitive to broader system realities and include such considerations in our strategic thinking and in the tracking of the results and impacts produced by our organizations.
Applying a systems perspective to our governance of organizations may well render partnerships among organizations in our communities more constructive and help to cultivate a shared sense of corporate responsibility for our broader society and for our general social well-being.
This communication is not specifically about the Policy Governance® system of board operations but there are a couple of Policy Governance® concepts that seem relevant to this topic. First of all, there's the Policy Governance® concept of "at what worth" (a part of the Ends construct) which raises the question: Are the results produced by our organization worth the costs incurred to produce those results? Costs related to the production of results can be seen to include costs associated with the unintended consequences of our organizations' activities. Secondly, being sensitive to potential and actual unintended negative impacts produced by our organizations can lead to board policy making that prohibits organizational activity contrary to defined board values and also to close monitoring of organizational activity to ensure compliance with board policy. For more information about the Policy Governance® system, please go to www.BoardsOnCourse.com/policy-governance.
I thought the perspective of seeing our individual organizations as parts of larger interconnected systems and appreciating how the activities of organizations impact other organizations and our society (often negatively) was a valuable insight from the conference I attended. What do you think? Please let me know.