Tuesday, May 14, 2013

Board Members as Loyal Opposition?

(Note: Many of us are always looking for another angle or analogy in thinking about the important role that the nonprofit board plays. Here is a take from Canadian governance that might be of interest. Note that the "loyal opposition" should not be considered the same as devil's advocate which seems a common role for some "helpful" board members. - Bryan)

When it comes to governance, boards of directors tread a very fine line. Those who seek to lead the organization run the risk of usurping the role of the CEO. Those who follow the CEO's lead run the risk of abdicating their responsibility and joining the ranks of management. In fact, the true value of governance lies neither in leadership nor in followership, but in the unique role of "loyal opposition."

For many years, boards of directors of Canadian corporations and public institutions were criticized as being "parsley on the fish" (decorative but not useful) or an old boys' club, where protection of fellow members and mutual back-scratching ranked ahead of any other obligation. Largely ignored by organizational theorists until ten or fifteen years ago, boards are now intuitively understood to be important, but their function is still not fully conceptualized. This lack of clarity is problematic for individual directors striving to exercise due diligence and fiduciary responsibility and for regulators and quasi-regulators seeking to establish guidance on good practice.

Read the full article here.

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