Tip #9 Embrace the "Group Authority" of the Board
In our last Tip for Effective Boards, we focused on the first principle for effective board delegation to management – being clear about the recipient of this delegation.
We now turn to the second principle for effective board delegation to management which involves being clear about the source of board delegation to management. This principle involves embracing the “group authority” of the board and recognizing the “board as a whole” as the delegator of authority to the chief executive and the “board as a whole” as holding the chief executive accountable for organizational operations. This means that only the official decisions of the board at its formal board meetings have any binding authority over the chief executive. In other words, no individual board member (not even the board chair) nor any committee of the board delegates authority to or provides direction to the chief executive.
This principle may seem simple and perhaps obvious. However, it is my impression that many boards don’t seem to be aware of it or to really appreciate what it means to embrace it. When it is practiced, the chief executive receives one set of clear directives from the “board as a whole” and does not receive directives from multiple sources within the board. Board members realize that they are not to lobby the chief executive about their positions on issues but need to interact with each other to craft expectations for the chief executive that are officially approved by the “board as a whole.” Expectations of the board for the chief executive are thus unified and clearly defined. Accountability of the chief executive to the board is enhanced. This principle, when embraced and practiced by the board avoids potential confusion and conflict about expectations for the chief executive.
This second principle for effective board delegation to management is drawn from the principles of the Policy Governance® model of board operations. However, it can certainly be followed by any board whether it practices the Policy Governance® model or not. I would encourage any board that has not officially embraced this principle to seriously consider doing so.
For reference, the seven principles for effective board delegation to management follow.
Seven Principles for Effective Board Delegation to Management
- Be clear about the recipient of board delegation to management.
- Embrace the “group authority” of the board with delegation to the chief executive coming from the “board as a whole.” (This principle and the following principles assume the board is delegating to a chief executive.)
- Clearly state the board’s expectations for performance of the chief executive.
- Clearly delineate the scope of authority and discretion being delegated to the chief executive.
- Empower the chief executive to make decisions within the defined delegated scope of authority.
- Track and evaluate the performance of the chief executive in relation to the board’s stated expectations.
- Recognize positive performance of the chief executive and take corrective action when indicated.
For information about the Policy Governance® system, please go to www.BoardsOnCourse.com/policy-governance.