Tuesday, June 16, 2020

QUESTION 8: Why Do We Need a Lead Director Anyway?

A Nonexecutive Chair Might Help Your Board Prevent Sins of Omission and Sins of Commission!

Question 8 recommends a trending approach in for-profit boardrooms, often when the CEO is also the company’s Chairman. For this reason (and other reasons), the author suggests that boards name a “Lead Director”—a board member who has the time and requisite temperament to enhance the work of the board and the relationships between the board and the CEO. While this is very rare in nonprofit organizations, the chapter is still worth the read.

QUESTION 8 of 14: Why Do We Need a Lead Director Anyway? Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan (Order from Amazon)

Ram Charan says that boards need effective leadership. “No group of people, be it an orchestra, a basketball team, or a project team, ever becomes high-performing without a clear leader, and boards are no exception.”

The author urges for-profit boards to consider appointing a Lead Director or nonexecutive chair. It’s “different from most other leadership positions,” he writes. “It’s subtle and respectful and based on trust instead of formal power. Exercised properly, it takes the board to higher ground, and thus the leader earns tremendous respect among her peers.”

But whether your nonprofit ministry board names a traditional board chair—or a Lead Director—the selection process for Christ-centered boards requires time, discernment, and due diligence. Heed David McKenna’s wisdom in his book, Call of the Chair: Leading the Board of the Christ-centered Ministry (read my review).

McKenna writes: “The chair for a Christ-centered ministry must be called of God as well as elected by the board. When the time comes for a board to elect a new chair, all business should stop while the members reflect in silence and ask that the Spirit of God might give them discernment in their selection.”

Then this: “In the induction of the chair that follows, there should be the question, ‘Has God called you to this leadership position?’

“The prayer that follows should seal that call with the sacredness of the moment. If done in a consecration service for the board, its officers, and its members, the significance of the chair is communicated throughout the organization.”

With that God-honoring leadership selection process in place, it’s then worth considering how Ram Charan’s thoughts might enrich your board’s effectiveness. He notes that a Lead Director must have the “temperament, personality, and skills to build positive board dynamics in the boardroom.” But he adds, “That person should have no greater influence on the board decisions than any other [board member].”

A Lead Director with the right skill sets (I would add, with the appropriate “3 Powerful S’s”—Strengths, Social Styles, and Spiritual Gifts) will be immeasurably more effective than the CEO when addressing the myriad of boardroom issues. All boards have “unwritten rules of the board’s social dynamics,” he says—and thus that unwritten protocol often exacerbates “sins of omission”—where the boards stands idle as the organization falters.

But—you might push back—can’t a traditional board chair (not the CEO) also be immensely effective? “Why do we need a Lead Director anyway?” Charan builds a very intelligent case why boardroom dynamics and relationships require a Lead Director with a superb skill set. (And let’s be honest—many of us have endured innumerable board meetings led by less-than-competent board chairs.) The author notes that a Lead Director—who is savvy to the social dynamics of the board—will also help steer the board away from “sins of commission.”

This chapter delivers a Lead Director job description—a narrative that focuses on three key areas:
Judging the Issues (intellectual honesty is a prerequisite)
Making Meetings More Productive (communicating with all board members in between meetings to fashion the right agenda; and to keep the discussion on track—with several helpful questions for prodding unfocused board members)
Building the CEO-Board Relationship (example: “He or she is the one who gives the CEO feedback following executive sessions and sometimes provides coaching to the CEO.” Plus: sometimes it will be the Lead Director who delivers the feedback to a board member who acted inappropriately in a board meeting.)

Two more helpful snippets: Charan believes it is critical that the Lead Director speak to every board member in between meetings so you don’t have “a two-tier board” which can lead to “power struggles between competing factions.” And because this position takes a large hunk of time, “a term of three years for a Lead Director seems about right.” 

BOARDROOM DISCUSSION: Is our current board chair job description appropriate—in light of the demands on the board during these challenging times? Should we consider researching the concept of a Lead Director—or another scenario that would help our board be more effective?


• SURVEY: A recent ECFA survey noted that 52% of boards said only one person was considered when the board selected their current chair. Forty-six percent of boards said two or more candidates were considered. Download the 60-page report, Unleashing Your Board’s Potential: Comprehensive Report from ECFA’s Nonprofit Governance Survey, by Warren Bird, Ph.D.

• CHAPTER: Click here to read Lesson 25, “Align Board Member Strengths with Committee Assignments: Leverage the Three Powerful S’s,” from Lessons From the Nonprofit Boardroom: 40 Insights for Better Board Meetings, by Dan Busby and John Pearson.

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