Fixing the Dysfunction: Making Bad Decisions

The fifth in a series of seven talking about 7 common dysfunctions of a board and how to fix them.

Granted, the quality of the decisions a board makes lies in the eyes of the beholder. I may love a decision that you hate, but that does not necessarily make it good or bad.

However, a board who routinely goes against the advice of staff or whose decisions put the organization in jeopardy signals a problem. Thankfully, with the appropriate diagnosis, you can fix these problems.

• Board members lack sufficient knowledge. If the board continues to make poor decisions, they may not have the information needed to make better decisions. This could come from having the wrong expertise on the board (see #2) or from not providing the board with sufficient background information to make a more informed decision. I find it curious that we have a system in which we give important oversight and decision-making power to individuals who do not work in a given industry and often have little to no knowledge of the work of the organization. This makes it incumbent on the staff to provide sufficient information to the board so they can make informed decisions – and on the board to read, digest, and integrate this information into their decision-making practices.
  
  To improve decision-making and board function on every decision, you should regularly provide your board information on:

  • Your current programs including their importance, who they serve, and why they exist

  • Trends and best practices in your industry

  • Trends in the broader environment in which your organization exists, including funding forecasts

  • An HONEST assessment of your organization’s strengths and weaknesses; the board cannot make a sound decision if they think your organization walks on water when it barely treads water

  • Organizational financials – the good, the bad, and the ugly. Your finance committee should regularly review and verify financial data and report any irregularities or red flags to the full board.

• Wrong mix of individuals on the board. In addition to providing the right information to your board, you need the right expertise and dispositions among your board members to properly interpret these data and make good decisions from it. You can give me all the financial reports you want; I’ll look at the bottom line and otherwise see gobblety-gook. Make sure you have a finance person (or two) on your board, experts in your mission, a legal expert, and others who have knowledge of any changes or challenges that you might face. (That is, thinking of moving? You probably want someone with facilities knowledge.) Similarly, make sure your board has a good mix of dispositions. While harder to gauge when recruiting new board members, a board of all “yes people” will get little accomplished. You need a mix of critical thinkers, idealists, realists, creative thinkers, facilitators, and diplomats to keep the conversation moving and look at all sides of an important issue.

• Board members do not trust their staff. While the board should not rubber-stamp all the ideas and decisions of the staff, constantly going against the advice of staff suggests that the two do not have similar agendas or visions for the organization or that the board does not trust the staff. A good strategic planning process can provide the opportunity for the board and staff to discuss the important larger issues facing the organization, including its mission, aspirations, and how to get there. Beyond that, a good working relationship between the staff and board starts with the board chair. I recommend that the board chair and executive director meet at least twice a month if not weekly to share concerns, get advice, or celebrate. With the chair and executive on the same page, the work of the board seems to fall better into place. Remember that the board chair manages the board, so he or she can help communicate the executive’s vision to the rest of the board and provide context or information when important decisions need to get made.

• Poor discussion and decision-making among board members. Your board needs to trust each other as well to have a good, spirited conversation in which they respectfully disagree and challenge each other’s opinions. Poor decisions often result from people not speaking their minds or a dominating personality shutting them down. Healthy discussions start with a skilled facilitator as the board chair, one reason why this position can make or break a board and organization. You can also help your board have good discussions by giving them ample opportunities to discuss the “small” issues before they have to tackle a big one like a merger or financial challenge and letting them get to know each (and trust) each other as people. If they spend every meeting listening to reports, they lack the experience and trust to have these important discussions when they arise.