The Place of Governance

A question regarding Board members. What distinguishes their work from that of management and operations?

Why do we separate the various functions of organisations into governance, management, and operations? What makes them separate, where do they intersect, and why do they appear at times to collide? In this paper we introduce these functions from the point of view of schools, being separate entities in themselves, how each of the three functions impacts school life and health and how we can determine who is responsible for what.

John Forman, from Forman Baxendale Consulting, Governance and Management consultants, explores these questions to help with the understanding of the place of Governance in schools.

Board nature or nurture?

Governance is both enabled and restricted by the laws regulating incorporation i.e. co-operatives, associations and companies laws, plus each entity’s own Constitution. Incorporated entities all have governing bodies (boards, councils, management committees) made up of people appointed in compliance with the constitution; they form the legal responsible body acting in a guardianship role. The board / council / committee members share this responsibility whilst they have no individual rights to act on behalf of the entity, except where duly delegated or authorised by the governing body. These individuals are ultimately legally responsible for performing their governance duties to the standards required by law.

The legal nature of governance is thus largely set whilst issues of greater and lesser magnitudes continually impact the performance of boards, all sizes, in all industries, for profit and not for profit, because they are comprised of individuals who hopefully bring a diversity of experience, background, expertise etc., are appointed by various means and bring their differing personalities to the table.

Directors have significant responsibilities in law whilst they hold a limited tenure, are not employees (being unpaid volunteers in schools) and possess relatively few individual rights apart from those necessary to make sound and informed judgements.

It is becoming increasingly common for non-government schools to seek ‘independent’ board members. Many are excluding parents from their boards. Many are excluding staff and staff family members. Small schools in small communities may have great difficulty filling board positions if they exclude parents.

In many schools stakeholder groups can appoint their nominees to the board. This can invite potential for conflicts of interest if appointees carry stakeholder expectations. It matters naught how one is appointed to a Board, the law expects independent enquiry, independent thought and considerations for the highest good of the whole (real and perceived conflicts of interest should be managed). Somewhat counter to this is the oft quoted benefits of directors having ‘skin in the game’, which may be interpreted in the For-Profit sector as significant financial skin at stake (e.g. share holdings).  In our NFP sector ‘skin in the game’ might be an expectation of significant commitment to organisational purpose and values.

Building (nurturing) healthy culture

Often disharmony in schools reflects a loss of trust between Board and management, management and operations staff, parents and teachers or any combination of the above. Whereas role differentiation is important, distrust among and inside stakeholder groups creates unhealthy ‘us and them’ positioning with students the likely ultimate losers.

Culture does not go missing, only awareness goes missing. That which we walk past we accept and it takes little or no effort to develop poor habits which in time become our cultural practices.  Building and maintaining healthy practices requires work.

‘Stability enables change. Without stability change = chaos.’ (Source forgotten!)

Policy & procedure around how we meet (rules of engagement) help prevent sloppiness and unhealthy cultural practices.

A Board sets the example, the expectations, the framework / medium within which a culture grows; just as a teacher sets the culture of his or her class.

A definition of right conduct in our schools has no impact if only framed and hung. “Values don’t need to be explicitly stated, but they do need to be explicitly demonstrated”.[1]

 To what extent as a director do you actively supervise whilst keeping your hands out of management? As a whole to what extent is your board disengaged or overactive?

Governance graphic 1

Structure moves with the times

No ideal template exists for the incorporation and organisational structure of schools. Like all things, structures (a term used to describe forms of incorporation, lines of authority, governance, operations and who gets to decide what) need to change over time. As any organisation grows greater differentiation and specialisation of roles is needed, more authorities should to be delegated and more supervision processes put in place.

Structures hold form and to a solid structure many things can be attached, added, altered. Internal walls can be shifted to accommodate our changing needs.

Structures should bring form to behaviours because behaviour will enhance or damage our quest to achieve purpose. Behaviours are our demonstrated values.

‘Freedom within a framework is empowering’.[2] Blink. Malcolm Gladwell

Structures built to hold a school’s operations should enable the exercise of greater creative expression in the classrooms.

Good fences make good neighbours.’[3]

Structures should include clear delineation of authorities between the Board, the school management, committees and individuals; increasing trust which is a foundation block in well-functioning teams.

Three Parts

The parts of a whole organism (individual or group) are not straight forward or simplistic in nature. In nature we see organisation by role description; for instance, one queen bee, her close attendants, many worker bees and a regiment of soldier or guard bees. We describe this as hierarchical structure. The best organised in nature are more likely to survive.

Life equals Activity. Activity equals Change. We grow and change as people, often barely remembering who we were in decades past. As an organism (school) grows, it needs to change – to act its age; responding appropriately to its environment. Somewhere this must be foreseen. A Board is not a stakeholder in the common sense – it is more an overseer and protector of the Purpose.

Where it is the teacher’s task to educate in a manner enabling their students’ growth to their full human potential, it is a Board’s task to assist the school entity’s development to its full potential.

Governance is a specialty role in itself; it is a profession with its own skill set.

A governing body can and is expected to delegate responsibility for operations to more expert managers, who will in turn employ personnel to deliver the organisation’s mission. Structures inside this summary vary greatly.

Steve Jobs said his success largely depended on him employing people who knew more (expertise) than he did – they decided and advised; he listened to and empowered them.

Time and Focus

Governance graphic 2

A Board’s attention should mostly focus on quadrant’s 1 & 3. All board level considerations should include the potential future impacts of decisions being made now. If too much of a board’s time is spent in quadrants 2 & 4 it will be spending too much time Managing and interfering with Operations.

The first question for board decision-making is ‘Why is this on the Board’s agenda?”

Governance graphic 3

When taking a future focus i.e. on the development of our organisation’s potential, we engage more of our creative / imaginative selves. This is often called the ‘generative’ work of governance.

That said much of a board’s focus could easily be described as boring or mundane. Generally, these are matters to which a systems approach can be taken e.g. reporting & reviewing. This work is largely confined to ensuring the school meets obligations imposed by its primary legal responsibilities and supervising its delegated authorities. ‘Compliance’, ‘risk’, ‘financial’ (solvency & sustainability) and ‘supervision’ responsibilities complete the five commonly acknowledged categories of governance focus.

A growing expectation of Boards is that they will conduct reviews of their own culture and effectiveness, including occasional externally engaged reviews.

Appointments to a board can present new challenges because board meetings are a space where vigorous discussions may take place followed by agreement, after which a board speaks with one voice. This should be part of the induction process for new or prospective directors, along with other statutory obligations such as the declaration and management of real or potential conflicts of interest.  

Decision Making

The overall process of decision-making i.e. information > discussion > decision > monitor / review will vary between Governance and Management in that final management decisions will normally be made by a person delegated responsibility to decide. Management issues will more likely require greater flexibility, responsiveness, immediacy and to be free of the constipation risk associated at times with requirements for consensus in committee.

Governance graphic 4

 

Operations

Operations in a service organisation such as a school are conducted by the professionals and skilled specialist staff engaged for delivery of education, maintenance, I.T., finance etc.

These people deliver the expertise of our service; they are the ones doing the work for which the school exists; the engine room. Issues will arise daily, often requiring daily or immediate resolution.

  Governance graphic 5

The Challenge(s)

Governance work is different. It requires us to develop different qualities.

Within schools we have engaged in damaging conflicts over issues ranging from our deep and fundamental philosophical understanding to issues seriously trivial. It takes effort to ensure conflict in decision-making is replaced by empathetic listening, healthy and open discussion, debate and agreement.

The work we bring to our schools should include self-reflection and internal development, otherwise the school’s work is weakened.

Written by: John Forman http//:www.formanbaxendaleconsulting.com.au

References:
[1] Trent Innes, ‘Lasting the Distance’ (August 2020) Company Director 64.
[2] Malcolm Gladwell, blink the power of thinking without thinking (Penguin, 2006).
[3] Robert Frost, ‘Mending Wall’ in Tendencies in Modern American Poetry (McMillan and Co, New York 1920)