Boards Stepping Into Management Roles
- Dec 2, 2018
- 3 min read
What an honour to have someone I hadn’t heard from for a few years, respond to one of my recent posts. Not only is Rod St Hill a former lecturer of mine (Christian Heritage College), he was also the Dean, School of Business and is now the CEO of Leaders Institute, an organisation leading a team who are developing our next generation of leaders in agriculture and accounting. Rod's guidance and willingness to share of his expertise and knowledge assisted me greatly in my units of study.
In comment to “Board & CEO Engagement” (November 25, 2018) Rod pointed out that “At start-up stage and when the environment is turbulent or when there is a crisis, the board may need to do quite a lot of 'micromanagement'”
He is 100% correct - a Board, from time to time, will needs to step away from a Governance approach to take on a Board of Management model, managing an organisation in greater detail – maybe even moving to a micromanagement model.
There are many reasons that a Board may need to step back into a Management role including:
Organisational start-up
Appointment of a new CEO
A senior manager leaving whose strengths are not shared by the CEO
Organisational crisis
Organisational restructure
Significant changes in strategic direction
Turbulent operating environment
Significant changes in cultural direction.
On some occasions, sometimes through no fault of their own, or sometimes through (more frequent than should necessary if only all organisations were well governed) an organisation will find itself in a position where its Board is required to step into an organisation wide management role. Experience tells me however, on the majority of occasions, the Board only need take a management approach to a specific area, department or business unit of an organisation, achieving this through a delegated individual or Board sub-committee.
Example 1:
An organisations CFO resigns, and the CEO does not have strong financial experience, training or background. On this occasion the Board may need to step in, either through the Treasurer or Board Finance Committee, to fill the CFO gap until a new CFO can be appointed, and remaining in that role until the new CFO finds their feet. All other areas of organisational oversight are retained by the CEO.
Example 2:
The Federal Government has a significant policy change to grant funding for a particular community sector. The organisation, near overnight, loses 60% of its revenue and is fighting for its very survival. On this occasion the Board may need to step into organisation wide to oversee a new strategic direction, financial model, fundraising focus, staffing model and a variety of other potential changes.
The extent to which a Board may need to step in is determined by:
CEO strength, experience and skills
Other staff experience and skills
The significance of the impact the event has on the organisation
Additional changes the Board wishes to implement as a result of the event.
Any requirement by a Board to manage the whole, or part, of an organisation in detail should be accompanied with a plan that includes:
Board/CEO relationship parameters for that period
Desired outcomes
Key milestones
Key Performance Indicators for both the Board and CEO
Timeframe – with a planned end date
Review process
Exit strategy.
A Board stepping into a Management role should not be feared. Conversely, a Board also needs to be mindful to not extend their Management role wider than is necessary, or to stay in that role for longer than is beneficial to the organisation.
As always I’d love to hear your feedback.
If this is an area in which TakeControl Solutions may be of assistance to your organisation please do not hesitate to contact me.
Dwayne Wescombe
Managing Director TakeControl Solutions
Comments