Good day and welcome to high-performing boards, what they look like and what they do. It's my pleasure to be with you presenting this material to you. I'm Mark Engel with Association Management Center. I've been in this non-profit governance space for about 38 years. I had the opportunity to study high-performing boards at Case Western Reserve University where I earned a doctorate of management degree studying these boards. So we're going to share with you a little bit today, you know, what do these boards look like and what do they do. But we always have to be mindful to start with where is the association in the stage of life. Most of the organizations that will be involved with this video are beyond the conception stage. That's infancy where we started the organization, the founders got together, rolled up their shirts and say we need to do a few things to advance our community. So that conception infancy stage it's highly likely your organization is past that. You've moved into the adolescent stage, young adults or adulthood stage and those stages are defined actually by process. By respecting the fact that process matters we need to get the right people engaged at the right levels. Sometimes that's subject matter expertise, sometimes that's leaders within the community that you serve and oftentimes that's a professional staff to support advancement of to drive organizational performance. So we see the organization moving from adolescence to young adult into adulthood. Adulthood is when the organization is esteemed as the go-to source for information in your community and it's highly likely at that point and even in the young adult stage you have high competence to support the member involvement. Professionals in marketing and finance and strategy etc to really advance the principles and the effectiveness of the organization. So the stage in association life is a very important fundamental to start with. We often ask board members to say where do you think your organization is within this migratory process of going from the early stages actually through adulthood. But we don't want to assume everybody knows what governance is. What does it look like? We like to start with the principles of there are incorporation elements. You have articles of incorporation filed with the state which gives you a tax status and the general principle of who you are and what you're going to do and then you have the bylaws which identify in our agreement with your members of the authority structure within the organization. In the old days bylaws were ad nauseum levels of detail and pages and pages of things you can't do. In fact we always talked about holding a tight grip around control. In fact if you google the word you'll governance you'll find out it is about authority and control. But the concept that we see advancing in today's environment is how to relinquish that control to distribute that authority within your meaningful work groups. That's a different context of governance today than it was likely when your organization was founded. In fact those folks on the right side, governance as leadership, Chait and colleagues out of Harvard have done a wonderful masterful job of talking about governance as leadership instead of the tight rein of control. We're going to see how that manifests throughout the process of good governance. But what does governance really look like? We do like that old slide of that authority and control and realizing that it has shifted entirely in this day and age. We have three real good researchers in this space of Will Brown, Nancy Axelrod, and Amy Edmondson. Will Brown with Texas A&M has studied non-profit governance with the dependent variable of what drive organizational performance. Brown found there were two critical elements. Bored spending time on strategy and embracing a culture driven by strong interpersonal relationships. We'll spend some more time on that in a few minutes. Nancy Axelrod takes it a step further talking about that cultural element of how we do our work. And in my doctoral research we really found out that is a critical element to advancing performance in association boardrooms. But the third element around Amy Edmondson's research is really about the team safety. And we have to understand that high performing organizations in our space of associations have to have that environment and it's part of it's a cultural environment of being able to have meaningful conversations and protecting that space that team safety element. What does that look like? These three are critical principles and how good governance is done today in the high performing boards context. Let's spend a little bit more time on it. But this is a tool from board source which I really think is a great blueprint of what are the six essential ingredients around governance. Board meetings, being prepared for them. We'll spend some time on that. Strategy work, how those pieces come together and inform our work together. Understanding and appreciating a streamlined structure. We're seeing as we talked just a minute ago about that capacity to distribute authority to meaningful work teams. That streamlined or flattened structure is so powerful today in this environment. The composition of the board and staff. Who is in leadership positions for us? How did they get there? What are their competencies and backgrounds? The leadership of the board and the organization. And this particularly talks about that dyad of board chair and CEO and that relationship. And then the mission. Are we on task with who we are and what we say we're going to do? This is a great resource provided by board source and it's available on their website. As far as the three critical elements that bring governance together, we talk about strategy, culture, and structure. And the board's unique fiduciary responsibilities to safeguard and advance those elements. Around strategy, what is the organization uniquely qualified to advance? For example, Jim Collins, that strategist for the corporate community, talks about the hedgehog concept of what are you best at? What are you passionate about? And where do you make your money? Focusing critical time and strategy is mission critical for good governance. And we'll see how high performing boards do that in a minute. The structural elements are the systems and the mechanisms that come together that either enable you or disable your organization to accomplish your strategic objectives. That's where we talk about the authority, the responsibility, and accountability and how those come together to advance your work or to create barriers for how you're getting your work done. The cultural element, as Nancy Axelrod spoke to earlier, how do we get things done? Or what roadblocks that delay or deny advancing strategic objectives? Sometimes this is around power, influence, and relationships. What is keeping us from advancing ourselves and the performance of our organization? Of course, the cultural elements do fluctuate with changes in leadership over time. So what do high performing boards, what do they look like? And we have some studies that reveal this information. Beth Gaisley, some research for the ASAE Foundation, and our research that Will Brown and I conducted after that, validated that the average size board for high performing boards is 15. Now that data point is at least three years old, and we believe in today's context that number is decreasing as we have seen in prior studies. It used to be 17, then it went down to 15. My suspicion is next time we measure that, it'll even be down possibly to 13 and so on. The other element that Brown and I found in our research was that boards are being comprised based on competency today, not longevity, not popularity, but based on competency and balance, being mindful of the talent we need around the board table, the leadership teams, to advance strategy for the organization. So it's no longer a reward for the length of service or the popularity of a candidate as it is aligning the competencies and backgrounds we need. And to do that, we found in our research also the movement towards uncontested slates for board members. In other words, if you have three openings, you have three candidates, not a lengthy list of those to choose from as far as the public membership, if you will. And then we also found that the board is now electing the officers. And when we think about it, the critical skill set to facilitate the leadership of the organization, who best knows those skill sets and the availability of talent, but frankly, within the board. That's why this research that the ASAE Foundation published a couple of years ago from Brown and myself really revealed these critical elements and what they look like in the boardrooms today for our community. But what do they do? And when we saw that we had that originally stages of life cycle where you saw that the associations moved through towards from adolescence to the full authority, if you will, the mature organization, what do they do? We find that boards in high performing areas think rather than they do. And so the construct of who is at that board table are the visionaries, the strategists, as opposed to the people who have the ability to roll up their shirt sleeves and get work done. So again, it moves towards a thinking board instead of a doing board. It allows us to distribute authority to our meaningful work teams to get consequential work done. It's basically a flattening of the structure when we think of it in that context. And how do they do that? And now we're going to spend a little bit more time deeply in some of these slides that support this around agenda management, encouraging healthy debate in the boardroom, being respectful of processes, protecting the culture as Axelrod talks about and Edmondson, and then that partnership with staff, which is actually another video we have in this series, but we'll focus a slide on that as well. So in our research with high performing boards, we found out that they really identified that valuable board time constructing the agenda around these four elements. Consent agenda are things that are routine items. They're necessary, but they're not necessary for face-to-face or Zoom discussions. We can do that with a consent agenda by approving these items. The fiduciary element are things that require us to take action, whether it's a budget approval, a 990 approval, some nominations and appointments, for instance, but where we've earned time or where we earn our stripes at the board levels and they're on the strategy and the generative elements. We're going to share a slide in just a minute of what that looks like. But when we did a qualitative assessment of how these boards, high performing boards are spending their time, they're spending most of their time in that generative and strategy domains. In fact, some of them are advancing consent agendas electronically in advance of a meeting, handling the fiduciary items by routine appointment too. So where are they spending their time when they're together? This is a sample agenda. We don't have time to go into detail of it, but you'll see they have generative discussions upfront. We say this is the ability for high performing boards to look up and out of what is going on that's going to be impacting their community in the future. We don't even know enough about these issues yet. How do we frame these discussions so we can be thoughtful of preventing somebody from doing something to us and actually taking proactive steps of doing something for us? That's the construct around generative discussions, looking up and out into the future. The strategy issues are things that we already know about. In fact, we probably have in our strategic plan, you can see they have their success statements around each of their strategic pillars and they have some issues that they need to remove barriers, reprioritize, or allocate some resources to get some key strategic objectives accomplished for them. And then they move down to the operational parts of the agenda with reporting and general information. And you'll see in this group, they even approve their budget in this construct of more operational elements because they ask the strategic questions upfront. Is there anything we need to do to change our allocation of financial resources at this time? If the answer is no, it made their budget approval process much easier. And they did have a process, a deep process for doing that in advance. And then they recap the decisions made. At the board level, we have a lot of discussions and likely fewer decisions. In fact, our research showed that high-performing boards make fewer decisions. And that's because they're spending on strategy overall, allocating those resources and prioritizing issues. And so when they do that, that allows the meaningful work to be done at the committee and task force level. They're doing that consequential work. So the committees and task forces have more authority to advance that work. It's an interesting construct when you think about how we're spending our time at the board level. The next element is how we do that. And what we find is that meaningful work is done by encouraging diverse viewpoints. How do we do that? And I love this context from Cicero, where he talks about diversity and council and unity and command. And his concept, this was around bringing the army generals together and saying, let's discuss our plan and beat it up. But boy, when we walk out of this tent, we better be in lockstep or we're going to be divided and conquered. Same construct in leadership at the board level. Let's discuss these plans. Let's make sure we are in alignment. We've got the opportunity to challenge each other on it and then walk out of here in lockstep. And that's actually one of the fiduciary responsibilities, right? So regarding that element to have constructive conflict in the boardroom, we do realize, and this is through our doctoral research, there's two elements to this, affective and cognitive. And the affect is when we get personal and it's emotional. The cognitive is when it's substantive, it's validated, it's researched. Those two elements are important in realizing our discussions either move and advance strategy or deny strategy. In fact, what we found in our space, studying high-performing organizations, that the affective discussions are equally, if not more important than the cognitive. Doesn't mean we're not preparing ourselves with good, valid data and information to make a cognitive decision, but we have to be mindful that when we undermine the capacity to advance strategy in association boardrooms, affective elements, emotional elements undermine the ability to make a high-quality decision. So we need to be mindful of what is the role of that. So when we did talk about process, we did talk about looking up and out and that ability for the generative discussions. In today's environment, we have all sorts of ways to capture information, get input, whether it's scanning and getting membership data inputs, reports, and so on. If we have a house of delegates or a membership body that we can also inquire of and have them help flesh out some strategic elements, if you will. Our work groups of committees and task forces, that prior agenda that I showed you from that trade association, they had the capacity to go into their committees and say, what would it look like if we were to move from defense, responding somebody doing something to us all the time, to offense and doing something to advance our community? That's more than a subtle change. The ability to pose those types of questions, looking up and out across our organization is very powerful in driving strategy advancement. Of course, we need to make sure the issues are on mission, that they're consequential to consume board time, that they're prioritized and resourced appropriately. This is what our research found in high-performing organizations. It is about process. I mentioned the conflict of affective and cognitive conflict to improve decision quality. Proper understanding of the issues before us is a critical variable that impacts decision quality in association boardrooms. Do we understand what's before us? Have we inquired properly in order to make consequential decisions? The other element around process and time is if we're dealing with strategic issues, we don't need to be rushed to make a decision. Are we ready to make a decision? Have we vetted the issue? Have we aligned the information and the robust talent that we have to vet these issues appropriately for us? Those three elements of process and time, well-managed conflict and understanding, improve decision quality in a meaningful way. That's what our research of high-performing association boards revealed. And again, back to the culture element, our favorite Drucker slide where he talks about culture eats strategy for breakfast, being mindful of how we do our work. Again, when we researched our space, and Nancy Axelrod did a nice job of unpacking this, we found that that level of trust is mission critical. It's the baseline for coming together to make quality board decisions. If we don't have trust within the board capacity and that board staff partnership, then we cannot advance our work. We don't become team oriented. We start worrying about why people are saying something instead of what they're saying. So we can build on trust, advance our teamwork. We get to candor and constructive conflict in our board deliberations. That improves decision quality. We have to be mindful that without trust, we can't advance to the other three. So they are building blocks upon each other. Nancy has a wonderful article in the Boardroom Culture Counts that unpacks that deliberately. Back to Chait and colleagues about governance as leadership. When we talk about this board staff partnership and what this looks like, we talk about the CEO engagement and the board engagement and right sizing it. We're aiming for that upper right quadrant of governance as leadership, where the board engages in a constructive partnership with the CEO, respectful of the talents that the member volunteer leadership brings, and the staff competence and insight to advance strategy, how those pieces come together. Again, we have another video that gets further into that detail of the board and staff partnership. But we know it's mission critical in advancing organizational performance for associations. That's all we have time for today. We do have resources on our website. You can click the orange link there. But we appreciate your time and talent in contributing to the success of your organization. So thank you for being part of a leadership journey for your organization.

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