Saturday, August 30, 2014

CEO Overassurance: “Far Rosier Than Reality”


I’ve asked dozens and dozens of seasoned CEOs and board chairs, “If you could get a do-over, what would you do differently in your early years of board leadership?”  


Here’s a collection of their thoughts—and insights from the governance literature:

A CEO told me: “I wouldn’t lie to my board!” (On the expressive side of the four social styles, this leader painted a picture far rosier than reality.)

The co-authors of Boards That Lead caution directors, “Most chief executives are constitutionally optimistic, and since by definition their role is to surmount challenges, the tenor they bring into the boardroom is likely to be relentlessly upbeat. Taking executive overassurance into account will aid directors in detecting nascent troubles ahead, but it is only one piece of a very complicated puzzle.” (Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem)

Another CEO, wishing she could revisit missed opportunities, responded, “I would spend more time with individual board members.”

“When asked what they would do differently, retired CEOs most often say, ‘I would give more time to developing the board,’” writes David L. McKenna in Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations.

And here’s my answer to the re-do question: “I would have been more intentional in mentoring and inspiring board members with niche books. That would have created greater ownership of our vision and mission.”

“Avoid Management-by-Bestseller Syndrome that requires everyone to read this month’s trendy book. Instead, build a management library in your office and recommend specific titles to specific people for specific problems or opportunities.” (See The Book Bucket chapter in my book, Mastering the Management Buckets.)

You can create a life-long learning culture on your board by inspiring at least one board member, per meeting, to give a five to seven-minute book review on a key topic: governance, spiritual discernment, leadership, trends, risk, finance—whatever your need is.  Leaders are readers!

Carl Bard said, “Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending.” (Wow. That’s the Good News!)

QUESTION: If you could get a do-over, what would you do differently in your early years of board leadership? What will you do in the next 90 days?

Tuesday, August 19, 2014

Rooting Out Boardroom Dysfunction

Board leaders “can anticipate at least one major crisis during their tenures,” predict the co-authors of the excellent book, Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem.

Can you prepare for your next crisis? Yes. The first step is to “Root Out Dysfunction,” which is also the title of the fourth chapter. The authors explain:

 “In our experience, as many as half of Fortune 500 companies have one or two dysfunctional directors.” They identify three types:
     • “Some see themselves as the smartest person in the room.
     • Others seek recognition.
     • Others are frustrated would-be CEOs.”

They add, “Whatever their personal motives, they tend to micromanage or take boardroom discussions down dark alleys. We have seen a director interrupt the first five minutes of a CEO’s boardroom presentation and sour the mood of both board and management for the remainder of the day. The result is to impair, even negate, a board’s capacity to lead the firm. As in any group, a dysfunctional member can sabotage the entire team.”

The book cites a study of board members in Australia which summarized dysfunctional directors into these colorful categories:

  • Nonstop talkers: board members who “sought to demonstrate their exceptional knowledge”
  • Hobbyhorse jockeys: directors who are “overly focused on the one topic they knew well”
  • Hand-grenade throwers: board colleagues who “were contentious and obstructive”
  • Captives of compliance: this group “stressed rules over judgment”
  • Egocentrics: the “self-referential” types on your board
  • In over their heads: those directors who “simply did not understand their firms challenges”

Charan, Carey and Useem add, “That such excesses emerge in even the bluest of the blue-chip boardrooms is not surprising. Directors bring the same array of human foibles to the boardroom as do people to any room, though one would expect that the oddest of the oddballs would have been screened out.  What is more surprising is that so few steps are taken to limit the damage.”

So what should Christ-centered boards do when dysfunction is alive and well? First, read this chapter. It’s excellent. Next, ask your board chair to address the issue with the offender in a one-on-one conversation. According to corporate coach Marshall Goldsmith, every leader has blind spots and it’s possible your dysfunctional board member has never been graced with frank feedback.

"Love should always make us tell the truth.
Then we will grow in every way
and be more like Christ, the head."
(Eph. 4:15, CEV)

QUESTION: The authors suggest that “a boardroom norm on acceptable discussion and personal behavior can be of special value here, guiding directors on where their leadership ends and management begins.” Do you have a boardroom norm that every board member has affirmed?

Tuesday, August 12, 2014

Resigning from the Board: The Tipping Points

Is there a tipping point in board service when it’s time to exit the board?

How should board members spiritually discern if their engagement is inadequate (or even mediocre) and a resignation might be in order? How do you know when it’s time to free up space for new board blood and new energy?

Attorney Jon Ruybalid says there are “thought patterns and questions that can help a board member determine if the time has come to resign.” In his August/September 2014 column, “In the Name of the Law,” in InSite® magazine, published by Christian Camp and Conference Association, he gives five poke-in-the-rib statements to consider:

  • You have stopped reading the board meeting materials in advance.
  • You realize that you use board meeting discussions to challenge other directors, find errors in their thinking, criticize decisions and try to gain negative support.
  • You do not recognize names of staff members or programs that are brought up at a board meeting.
  • You wonder to yourself if board membership is worth it because you are not getting much out of it.
  • You are not able to support board decisions that are inconsistent with your preferences.

If you’re not getting much out of board service, says Ruybalid, who has represented nonprofits for almost 20 years and serves as CCCA’s legal counsel, he adds,
“Board service may have become [more] about your personal benefit rather than the benefit and service to the organization,
staff and those impacted by its ministry.”


Are you at the tipping point yet? Is there someone on your board who needs a God-honoring nudge (or wake-up call)? According to the ECFA 2012 Governance Survey, with responses from 1,600 CEOs, board chairs and board members of ECFA-accredited organizations, asking under-performing board members to exit was the “most challenging problem” of 20 effectiveness indicators.

Heed King David’s aspirations for his son in 1 Chronicles 29:19 (The Message):
“And give my son Solomon an uncluttered and focused heart so that he can obey what you command, live by your directions and counsel, and carry through with building The Temple for which I have provided.”

QUESTION: Are you fully engaged—with an uncluttered and focused heart—in your role as a board member? If not, what are you going to do about it?

Thursday, July 24, 2014

Don’t Be Overwhelmed!


This summer I’m featuring several “re-runs” of past blogs.  Last year on April 27, I related a story about “The Board and the Bachelor Farmer,” and I included this powerful verse from Matthew 10:42 (The Message):


Jesus said,
“This is a large work I’ve called you into,
but don’t be overwhelmed by it.
It’s best to start small.
Give a cool cup of water to someone
who is thirsty, for instance.
The smallest act of giving or receiving
makes you a true apprentice.
You won’t lose out on a thing.”


To read the encouraging story about the bachelor farmer and a board's faithfulness, click here.

QUESTION: Discuss these three words from Matthew 10:42: large, small, called.

Thursday, July 17, 2014

Could I Fire You? No Problem!

I was in the last phase of what I call “dating a board prospect.” I had been cultivating Dan’s interest and engagement in the ministry I led for about 18 months.  Dan was also a good friend—but good friends don’t always make good board members.

So over dinner with Dan, and his wife, I’m ready to make the big ask—would he be open to serving on our board, if the Nominating Committee recommended him to the board?

Good news: Dan was willing to serve.

More good news: Dan’s wife affirmed his passion for the ministry.

“One last question, Dan.” I paused to be sure he would take time to think about it.

“We’re good friends. But it would be important to me that, if needed, in extenuating circumstances, the board had to fire me…”

Clearly, I was moving too slow for Dan and he didn’t even wait for me to finish my sentence, which would have been, “…if the board had to fire me, could you do that, irrespective of our friendship?”

As I said, Dan interrupted me half-way through my monologue: 
“Could I fire you, John?
No problem!”

I laughed. He laughed. And all was well.

One of more than 400 “
Rumsfeld Rules,” penned or borrowed by Donald Rumsfeld, reads:

“Never hire anyone
you can’t fire.”

Perhaps we need another rule: “Never recruit a friend to your board who values friendship more than doing the right thing.”

“Most of us are unknowingly selfish when it comes to friendship,” say Jerry and Mary White in their new book, To Be a Friend: Building Deep and Lasting Relationships. In their chapter on “Virtuous Friendship,” they pose an excellent discussion question: “[Discuss] the instances in which you have practiced virtuous friendship or been the recipient of a virtuous friendship.”

Should board members and CEOs invite close friends to serve with them on a ministry board?  I can’t answer that for you—but a virtuous, God-honoring friendship should be able to handle board work.  Certainly many acquaintances over the years have become close friends—as a result of the joys and turmoil of board service.

My response: No problem!


QUESTION: What are the upsides and downsides of inviting close friends to serve with you on a board of directors?

Thursday, July 10, 2014

85 Governance Questions and 85 Answers


Just when you think you have a handle on God-honoring governance, you discover you’ve muddled yourself into a lose/lose dilemma:

   • A board member doesn’t recognize a messy conflict of interest.
   • The CEO and senior team are encroaching on the board’s role.
   • The board is meddling and micromanaging in the staff’s role.
   • Neither the board nor the CEO is focused on governance.
   • (Add your issue here.)

What to do?  Sometimes, just knowing that other boards have experienced similar issues is therapeutic. So I recommend you surf through the 85 questions and answers in the 363-page resource, The Nonprofit Board Answer Book: A Practical Guide for Board Members and Chief Executives (Third Edition), published by BoardSource.

Suggestion: bring the book to every board meeting—and pass it around the room.
It will be irresistible to your board members
in their search for proof texts!


When you scan the table of contents, dozens of relevant questions will jump off the page—and tempt you to read the crisp, well-written two- to four-page answers. While this is not a faith-based book the first edition was written by Ted Engstrom and Bob Andringa, evangelical Christian leaders who have mentored hundreds of Christian leaders in effective governance.

The 85 questions and answers are organized into seven sections:
   1. Basic Board Functions
   2. Board Structure
   3. Board Member Selection and Development
   4. Board and Committee Meetings
   5. The Board’s Role as a Fiduciary
   6. Board-Staff Relations
   7. Organizational Change

As you leverage the insights of this book, challenge your board members to then ask the next question: “Do we need to add anything to this answer that would more specifically speak to the core values of Christ-centered governance?” For example, "While competent in decision-making, are we also competent in spiritually discerning God’s direction for our future?"

QUESTION: What are the Top-3 sticky issues your board is facing—and does The Nonprofit Board Answer Book provide any answers?

Tuesday, June 24, 2014

3 Mantras to Ban from the Boardroom


“Make the lie big, make it simple, keep saying it, and eventually they will believe it.”


Variations of this idea have been attributed to numerous leaders across history (none of them admired today).  Yet I’ve noticed a tendency—even in Christ-centered organizations—to repeat, repeat and repeat various mantras. After time, most people have bought in—even if the mantras or axioms are not even biblical. Examples:

#1. The Three W’s: Work, Wisdom and Wealth.  This one suggests that a board member is doing well if he or she contributes just one of the three W’s: work, wisdom or wealth. Where’s that in your Bible?  

John Frank, author of the quick-reading 55-page book, Stewardship as a Lifestyle: Seeking to Live as a Steward and Disciple, explains it this way:

“Some may believe that if you give time as a volunteer then you do not need to be a financial donor to the organization.  While all gifts of time, leadership and volunteering are appreciated, there is no measurement system in scripture to allow a gift of one type to cancel the need to grow in one’s holistic stewardship.”

#2. Ask the Busiest People to Serve—They Get Stuff Done.  This mantra must be banned from the boardroom!  Increasingly, many boards are finding that the busiest people are too busy.  They don’t: attend board meetings consistently, do the homework, engage deeply as stewards of God’s work, or—ahem—answer their emails. 
Busyness 
Is Not Godliness!

My personal pattern is not prescriptive for anyone else—but I limit my board service to just one board at a time. Others serve on only two boards. Maybe in full retirement a gifted person can serve on three or more boards—but calendar conflicts will be inevitable. Board service must be a faith trip, not an ego trip.

#3. We Don’t Need an Annual Board Self-Assessment Survey. The ingredients for this common myth are part ego, part arrogance, and part negligence.  Skipping an opportunity for every board member to weigh-in on board effectiveness is short-sighted.  At best, perhaps the board is too busy with non-essentials. At worst, perhaps the board is not open to a discernment process when the Lord can speak into areas of Christ-centered governance that need improvement.

Peter Drucker wrote, “Self-assessment is the first action requirement of leadership: the constant resharpening, constant refocusing, never really being satisfied.” 

QUESTION: What other board mantras are you living by, perhaps unintentionally, that are neither biblical nor healthy?