Index to Ram Charan’s 14 Questions + 3 Next Steps

Is Your Board Owning Up?

Over the last 14 weeks, I’ve highlighted the insights and wisdom from Ram Charan’s practical book for board members, Owning Up. While the book is written for corporate for-profit boards, nonprofit ministry board members will also find the book extremely insightful. During these COVID-19 months, I pray your board will be diligent and faithful in reflecting on and acting on these 14 questions.

And see below for a way to leverage these questions in the boardroom, at a board retreat, or even in a virtual board meeting using the “10 Minutes for Governance” exercise.

INDEX TO 14 BLOGS: Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan (Order from Amazon)

Click on the links below to read the blogs for each of the 14 chapters in Owning Up:

[  ] Question 1: Is Our Board Composition Right for the Challenge?
[  ] Question 2: Are We Addressing the Risks That Could Send Our Company Over the Cliff?
[  ] Question 3: Are We Prepared to Do Our Job Well When a Crisis Erupts?
[  ] Question 4: Are We Well Prepared to Name Our Next CEO?
[  ] Question 5: Does Our Board Really Own the Company’s Strategy?
[  ] Question 6: How Can We Get the Information We Need to Govern Well?
[  ] Question 7: How Can Our Board Get CEO Compensation Right?
[  ] Question 8: Why Do We Need a Lead Director Anyway?
[  ] Question 9: Is Our Governance Committee Best of Breed?
[  ] Question 10: How Do We Get the Most Value Out of Our Limited Time?
[  ] Question 11: How Can Executive Sessions Help the Board Own Up?
[  ] Question 12: How Can Our Board Self-Evaluation Improve Our Functioning and Our Output?
[  ] Question 13: How Do We Stop From Micromanaging?
[  ] Question 14: How Prepared Are We to Work With Activist Shareholders and Their Proxies?
Here are three ideas for inspiring more lifelong learning with your board (and how to continue the learning from Owning Up):

IDEA #1: Appoint a “Leaders Are Readers Champion.” Click here to read the four-page chapter, Lesson 38, “Great Boards Delegate Their Reading” in Lessons From the Nonprofit Boardroom. Click here to read Kent Stroman’s blog on this lesson. He quotes the U.S. Navy Seals, “Under pressure you don't rise to the occasion, you sink to the level of your training. That's why we train so hard.”

IDEA #2: Ten Minutes for Governance. Many boards are featuring a “10 Minutes for Governance” segment at every board meeting—to keep lifelong governance learning on the front burner. Rotate the leadership among your board members and assign a relevant chapter for your next board meeting. The board member/facilitator can present five minutes of content and then ask the board (in groups of two or three) to discuss a key question for five minutes.

Click here to read the four-page chapter, Lesson 39, “Invest ‘10 Minutes for Governance’ in Every Board Meeting” in Lessons From the Nonprofit Boardroom. Click here to read guest blogger John Walling’s color commentary. He quotes Richard Kriegbaum: “Leadership is a complex field and no one resource can meet all the needs of every leader in every situation.”

IDEA #3: Board Retreat Worksheet. At your next board retreat, select five or six key chapters from Owning Up and assign board members to each question. Provide a “Read-and-Reflect Worksheet” template for Owning Up or another governance book of your choosing. 

Board retreat templates for six governance books are included in “Tool #13: Board Retreat Read-and-Reflect Worksheets” (one of 22 tools) in ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board. To order the book, or to read more about this tool, click here for the blog post on Tool #13.

Bottom Line: Is your board “owning up” to its God-given responsibilities as stewards of your ministry?

QUESTION 12: How Can Our Board Self-Evaluation Improve Our Functioning and Our Output?

“The Acid Test of Effective Corporate Governance”

A board member, clearly proud that he had invested 250 hours on board work the previous year, told Ram Charan, “We put in a lot of hard work.”

But Charan, wisely, pushed past the rhetoric and non-measurable metrics—and instead—threw him this zinger: “Let me ask you something. What would you say are the one or two things your board did that really made a difference for the [organization]?”

You guessed it. The board member “…took a long pause and looked up at the ceiling. He seemed lost in thought, like he was struggling to come up with a concrete answer. As I waited for him to respond, I realized that he probably had never thought about his board work in that way.”

QUESTION 12 of 14: How Can Our Board Self-Evaluation Improve Our Functioning and Our Output? Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan (Order from Amazon)

Board members “should not confuse hard work, as commendable as it is, with meaningful results,” writes Ram Charan. That insight is just on the first of 14 wisdom-packed pages in Chapter 12 on the critical need for boards to conduct self-evaluations.

Charan adds, “The board’s output—the quality of the decisions it makes and actions it takes—is the acid test of effective corporate governance.”

Don’t confuse inputs (meeting frequency, meeting length, etc.) with outputs. Boards should “explicitly state that the central purpose of their board self-evaluation process is to continuously improve their ability to govern effectively.”

Peter Drucker agrees: 

“Self-assessment can and should convert good intentions and knowledge into effective action—not next year but tomorrow morning.”

The Drucker quote is from the robust 30-page resource, “Tool #5: The Board’s Annual Self-Assessment Survey,” in ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board. According to ECFA’s research (see page 32), 31% of board members said YES to this question: “In the last two years, have you had an outside person help your board look in the mirror to do self-assessment for how it could improve?”

Tool #5 gives you multiple options in three major sections:
• Section 1: Do-It-Yourself
• Section 2: Facilitated by a Consultant or Board Coach
• Section 3: Template: “Best Governance Practices” Survey

If you opt for the Do-It-Yourself approach, Tool #5 gives you seven options, including this free assessment from ECFA:

CLICK HERE to complete the NonprofitBoardScore™, a tool developed by ECFA. The online survey will give you instant feedback and allow you to re-take the evaluation over and over (perhaps every six months or at least annually). Email the link to everyone on your board—and encourage each board member to save and print the results for discussion (and action!) at your next board meeting. 

READY FOR CANDOR? If you have a healthy board—competent in Governance 101 practices—and you’re ready for a challenge, ask your Governance Committee (or Executive Committee) to consider peer evaluations at least once a year. Very common in for-profit governance, peer evaluations are very uncommon within nonprofit ministry boards. Read Ram Charan’s suggestions in Chapter 12 first—and then discern if your board is ready to go deeper.

According to the Harvard Business Review article, “What Makes Great Boards Great,” by Jeffrey A. Sonnenfeld, it is the soft side of board governance that distinguishes high quality boards from the rest of the governance rat race. He labels it a “virtuous cycle of respect, trust and candor”—but, he warns, even that can be broken at any point. For your first peer review, perhaps ask a board coach to help you set the guardrails.

To paraphrase Proverbs 9:7, “Teach a wise board member, and he or she will be the wiser; teach a good board member, and he or she will learn more.” 

BOARDROOM DISCUSSION: What do we want to learn from our next board self-evaluation? Ram Charan writes that board members “should not confuse hard work, as commendable as it is, with meaningful results.” What are the one or two things our board has done in the last six months that has really made a difference for the ministry?

CHECK OUT THESE HELPFUL ECFA RESOURCES

• READ: Lesson 1, “Wanted: Lifelong Learners. Would you trust a surgeon who stopped learning?” in Lessons From the Nonprofit Boardroom. (Click here to read the four-page chapter.) In his color commentary on this lesson, Ralph E. Enlow, Jr., writes, “I find that the fatal combination of passivity and agenda clutter conspires to crowd out efforts to walk the talk of continuous board development.” (Read the blog.)

• TOOL: With 30 pages and more than a dozen self-assessment options, check out “Tool #5: The Board’s Annual Self-Assessment Survey,” in ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board. (Read more here.)

QUESTION 5: Does Our Board Really Own the Strategy?

“Don’t Come With a Buttoned-Down Strategy Document”

Here’s one of my Top-10 favorite governance quotes:

“There is nothing more important for a CEO
than having the right strategy and right choice of goals,
and for the board,
the right strategy is second only to having the right CEO.”

That wisdom is from Ram Charan and it’s very timely during the COVID-19 marathon. Ironically, Charan references another crisis in this chapter. “The financial crisis of 2008 laid bare a long buried truth: that many boards do not really own the strategy of their company.”

QUESTION 5 of 14: Does Our Board Really Own the [Ministry’s] Strategy?
Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan (Order from Amazon)

Why is strategy so important—and why should your board own the strategy?

Good News. The CEO of ABC Ministry urges the board to expand into three more countries. This new initiative aligns with the organization’s written strategy and three-year rolling strategic plan. The board’s due diligence process considers this bold move during two consecutive board meetings (with focused time for prayer and discernment)—and approves.

Bad News. The CEO of XYZ Ministry brags that “ideation” (a good thing) is her top strength from the Gallup StrengthsFinder assessment. But with no prioritization filter, the latest idea-of-the-week lands on the board agenda—with no vetting. In the absence of a written strategy or strategic plan, the board authorizes a considerable chunk of future donations and this non-budgeted brainstorm becomes a boondoggle. Yikes.

The best boards, writes Ram Charan, orchestrate comprehensive strategy discussions at board meetings—with ample time for Q&A. “Don’t come with a buttoned-down strategy document,” board members are requesting, “talk to us about the knotty issues you’re grappling with; tell us what’s on your mind.”

Rather than a 200-slide PowerPoint (snoozer!), Charan recommends a staff/board process that culminates in a five- to seven-page strategy document (about 2,000 words). Read the four-step process in this chapter and learn how to use a two-day board retreat for the fourth step: “Conduct a Strategy Immersion Session.” After one-on-one discussions on earlier drafts (CEO with individual board members), then meet in groups of four at the retreat, and ask:
   • “What three things do you like about this strategy?
   • What three things do you not like about this strategy?
   • What three ideas do you propose that the strategy should seriously consider?”

Read the entire chapter to leverage Charan’s very, very practical—but thorough—approach to engaging the board in strategy.

Example: Noting that strategy should always be in the back of board members’ minds, he writes, “It helps to have the strategy brief or a two-page sheet of bullet points in the binder for every meeting.” 

That two-page strategy brief would have helped XYZ Ministry. Board members—steeped in the importance of strategy—would have asked their CEO, “How does this new idea align with our written strategy?” (Short answer: It doesn’t—so please go back to the drawing board and our strategy documents.)

If you only read one chapter in Owning Up, read Chapter 5. And beware! “The shelf-life of a strategy is shortening,” says Charan. “The board’s objectivity and diverse viewpoints can help management detect a bend in the road” and other opportunities to grow or pull back—based on risk assessments.

As you prayerfully discern God’s voice for your ministry’s strategy, couple Ram Charan’s practical insights with Randy Samelson’s six-step plan from 1 Chronicles 28-29, in his helpful book, Breakthrough: Unleashing the Power of a Proven Plan (read my review). He urges board members and ministry leaders to ask the Key Log Question: “Other than money, what one opportunity (or obstacle) if captured (or removed) would most advance your mission/vision?”

BOARDROOM DISCUSSION: Randy Samelson says a credible plan has three elements: 1) It is written. 2) It is measurable. 3) It is responsive to the unexpected. (Oops! How responsive is our current strategic plan to the COVID-19 marathon?)

MORE RESOURCES: Check out these helpful ECFA resources:

• BLOG: Click here to read the guest blog by Bruce Johnson from Lesson 2 in More Lessons From the Nonprofit Boardroom, “Engage Board Members in Generative Thinking. They rely on generative thinking in their day jobs but are rarely asked to think collaboratively in the boardroom.” (Click here to read the chapter online.) Johnson reminds us, “No one joins a board because they love hearing reports. People join a board because they want to make a difference, they want to contribute to an organization or church they love.”

• TOOL: Consider summarizing your strategy and strategic plan with a one-page 11” x 17” template, “The Rolling 3-Year Strategic Plan Placemat,” Tool #14 from the book, ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board. Click here to read the color commentary on Tool #14.

QUESTION 3: Are We Prepared to Do Our Job Well When a Crisis Erupts?

The Board’s Role With Unknowable Unknowns

Wow! Question 3 is way too timely! In this 14-part series from the must-read governance book, Owning Up (read my review), Ram Charan says there are two kinds of crises:
   • Crisis #1: The Knowable Unknowns
   • Crisis #2: The Unknowable Unknowns

He elaborates on the these two types: “…those that are knowable, meaning they happen from time to time but at unpredictable intervals and with varying ferocity, and those that are unknowable, meaning no one has even imagined such an event.” 

QUESTION 3 of 14: Are We Prepared to Do Our Job Well When a Crisis Erupts?
Owning Up: The 14 Questions Every Board Member Needs to Ask (Order from Amazon)

Whether COVID-19 was predictable or not, Ram Charan says “Boards have to prepare for both the knowable unknowns and the unknowable ones in order to minimize disruption to the [organization], damage to the brand and [organization] reputation, and loss of hard cash.”

A plethora of experts and not-so-expert prognosticators are weighing in on Zoom webinars, white papers, and memes—and often (my opinion) giving inappropriate directions for the foggy journey ahead. The good news: CEOs and board members can pick their flavor-of-the-week expert and find agreement for their own opinions. The bad news: CEOs and board members can pick their flavor-of-the-week expert and find agreement for their own opinions.

Reminder: “In their hearts humans plan their course,
but the Lord establishes their steps.” (Proverbs 16:9, NIV)

Charan’s crisis wisdom is worth reading:

#1. Benchmark Crisis Practices. It’s never too late to get ready for the next crisis. For the knowable unknowns: “They should not be a complete surprise, and some expertise will exist somewhere to deal with them. Boards need to benchmark these practices as a preparedness measure.”

#2. Address Internally Inflicted Situations. Some crisis situations are, sadly, created by management (hasty hires, overly optimistic cash flow forecasts, revenue bucket imbalances, inadequate or no customer research, etc.). Boards can also stumble and create or exacerbate problems. “Every board needs to decide which categories are important enough to prepare for ahead of time.” How? See the next point.

#3. Establish a Crisis Committee. Charan writes that boards must ensure that management has “a core group that forms a crisis committee comprising the CEO, general counsel, CFO, and a public relations and communications officer.” He adds, “In each case, there must be a point person in charge and a game plan that can be deployed instantly.”

#4. Rehearse! Rehearse! Rehearse! It’s too late to “rehearse” for the front end of COVID-19. But it’s not too late to be prepared for the next knowable unknown crisis. Charan recommends that boards prepare “a list of advisors or experts available to the board 24/7 and keeping contact information current can save valuable time in the heat of the moment. Rehearsing a crisis can test how well the mechanisms and processes are working.”

The Board’s Role With Unknowable Unknowns

I urge your CEO and board chair to read chapter 3—even in the midst of the current unknowable unknown crisis. Charan advises, “Here the board can be an important check on management’s interpretation of events, because even the best CEOs can sometimes be too optimistic or have blind spots.”

As your board members pray daily (we hope) about Plan B or Plan C, heed these insights from the author:
• “The board should also help management imagine what the domino effect might be, projecting what other problems might arise as the one thing triggers something else.”
• “Waiting for management to make a move is a mistake. Management, after all, has never been tested under the conditions of an unknowable unknown, and the board cannot assume they know how to respond.” 

BOARD DISCUSSION: In chapter 3, Ram Charan cites a board that met six times in two months during a crisis. Is your board meeting at appropriate intervals during this COVID-19 unknowable unknown?

MORE RESOURCES: Check out these helpful ECFA resources:

• BLOG: Click here to read the guest blog by David Wills from Lesson 19 in Lessons From the Nonprofit Boardroom, “Never Throw Red Meat on the Board Table. Boards need advance preparation to fully address complex issues.” (Click here to read the chapter online.) Wills notes, “The currency of great boards is great discernment.”

• TOOL: The book, Owning Up, is featured in Tool #13, “Board Retreat Read-and-Reflect Worksheets,” from the book, ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board. Click here for the color commentary on Tool #13.

QUESTION 2: Are We Addressing the Risks That Could Send Our Organization Over the Cliff?

The Seemingly Improbable 100-Year Flood!

During this COVID-19 marathon, I’m encouraging board members to address 14 critical boardroom questions from the savvy wisdom of Ram Charan’s must-read governance book, Owning Up. (Click here to read my review.) The second chapter (just 13 pages) is so, so timely. Wow. 

Ram Charan urges boards to look at risk through five different lenses. He notes, “…keeping in mind that the seemingly improbable hundred-year flood might well occur during your board’s tenure.”

QUESTION 2 of 14: Are We Addressing the Risks That Could Send Our [Organization] Over the Cliff?
Owning Up: The 14 Questions Every Board Member Needs to Ask (Order from Amazon)

Examine risk through five lenses:

#1. The Financial Vulnerability Lens. “The board should watch cash flows—everybody knows cash is king—as an early warning signal of distress.” (Raise your hand if you agree that having more cash on hand would have better prepared you for this COVID-19 marathon.)

#2. The Strategy and Operations Lens. “Monitoring is not just about making the numbers, but also about talking through the risks.” The author adds, “If you have no appetite for risk, you shouldn’t be on a board; it will inhibit the CEO from making bold and necessary moves and potentially company-saving bets.” Yet he also warns that boards must watch both ends of this continuum: CEOs who tilt toward greater risk and CEOs who are risk-averse.

#3. The Political and Geopolitical Risk. Here, Charan recommends assembling advisory boards to ensure there is expertise where needed. If your ministry operates internationally—or depends on people or resources from another country—are you prepared for the what-ifs?

Do local, state, and national politicians understand the important work you do? Does someone on your team have relationships with these decision-makers? As Dan Heath writes in Upstream, “You don’t want to be exchanging business cards in the middle of an emergency.”

#4. The Reputation Lens. Ram Charan is prophetic! “In this age of transparency, an idea or rumor can spread instantly across the Internet like a virus.” He adds that some boards and organizations “have been blind to the factors that caused their reputations to fade, even though they had plenty of time to do something about it.” Do you have an action plan for addressing Internet rumors?

#5. The People and Culture Lens. The author warns, “Boards must also watch for a toxic culture that enables ethical lapses throughout the organization.” To check the temperature of your culture, Charan suggests boards follow the lead of General Electric and conduct periodic “pulse surveys.” ECFA, for example, participates in the “Certified Best Christian Workplace” process—and is one of many ministries that have earned that certification.

So how is your board assessing risk? Charan suggests you establish a “stand-alone risk committee, which would work with the audit committee.” And consider this: if you’re “climbing out of hot water, the board might even suggest that the CEO hire a chief risk officer.”

I urge your board to delegate their reading so at least one board member and one senior team member dives deep into this important book—and, especially, this important chapter. Then, set aside time at your next board meeting—or even between board meetings with a Zoom call—for special prayer and discernment, as you trust God on how best to prepare for the next crisis. It will come. 

BOARD DISCUSSION: Is “risk assessment” on your board’s agenda—at least once a year?

MORE RESOURCES: Check out these helpful ECFA resources:

• BLOG: Click here to read the guest blog by Danny de Armas from Lesson 35, “Is Your Board Color-Blind to Hazardous Conditions? What color is your boardroom flag?” in Lessons From the Nonprofit Boardroom. (Click here to read the chapter online.)
• TOOL: “The Board’s Annual Financial Management Audit: 20 True/False Statements the Board Must Address Annually (Tool #6),” from the book, ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board.

QUESTION 1: Is Our Board Composition Right?

“A Board Full of Generalists
Is Not Good Enough Anymore”

This week while we’re still enduring the COVID-19 marathon, I’m launching a series of 14 pesky boardroom questions—over the next 14 blogs. I’m leaning on the savvy wisdom of Ram Charan’s helpful governance book, Owning Up. (Click here to read my review.) The first chapter (just 18 pages) is jam-packed with boardroom insights. He writes:

“The role of the board has unmistakably transitioned from passive governance to active leadership with a delicate balance of avoiding micromanaging. It’s leadership as a group, not leadership by an appointed person.” He adds, “With the right composition, a board can create value; with the wrong or inappropriate composition, it can easily destroy value.”

QUESTION 1 of 14: Is Our Board Composition Right?
Owning Up: The 14 Questions Every Board Member Needs to Ask (Order from Amazon)

Here are three takeaways:

• Plan for Board Succession. Address “the anticipated requirements of the board composition over five to ten years. Staggering the ages of directors on a board is important—that’s why a ten-year view is needed.”

• Recruit for Expertise (but don’t recruit micro-managers). Charan recommends using a skill assessment matrix “…because a board full of generalists is not good enough anymore.”

• Conduct Deep Reference Checks. “Standard reference checking is not enough. Governance committees must make the commitment to vigorously check a candidate’s references by talking to other people in the board’s own social and professional networks.”

The author asks board members to annually conduct their own reality check: “Are You Staying on Your Board for the Right Reasons?” Chapter 1 also notes the biggest red flag to avoid—a board nominee with a big ego. 

So is your Christ-centered board appropriately addressing these board composition issues? Urge your Governance Committee, or Executive Committee, to read this chapter and ask these questions:

1. Do we have a plan for board succession? Is there a spiritual discernment component to our board member recruitment process?
2. Is our board composition wide enough and diverse enough to address our needs five years from now? Is boardroom group-think common or uncommon? Do we hear from God about our board prospects—or just the loudest-talking board member or the largest donor?
3. Do we consistently go deep when checking references—including a board prospect’s pastor, small group leader, and/or other influential people in his or her life?

It’s been said that “there are no dysfunctional organizations—only dysfunctional boards.” Thus, creating and leveraging the right board composition is critical. God-honoring boards will give high priority to board succession best practices.

BOARD DISCUSSION: What ONE next step is the most critical for our board—this quarter?

MORE RESOURCES: Check out these helpful ECFA resources:
• VIDEO: ECFA Governance Toolbox Series No. 1 - Recruiting Board Members: Leveraging the 4 Phases of Board Recruitment: Cultivation, Recruitment, Orientation, and Engagement (online video, viewing guide, and facilitator guide)
• BLOG: “If You Need a Board Member, Recruit a Board Member,” by Bruce Johnson, in the 40-week series, Lessons From the Nonprofit Boardroom Blog
• TOOL: “The Pathway to the Board: Six Steps on the Pathway to Board Service,” from the book, ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board

TOOL 9 – The Board's Annual Evaluation of the Top Leader

“Spotting, Catching, or Exiting a Falling CEO”

Heed this caution from Ram Charan and his co-authors of Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way:

“…it is useful for [board members] to keep a weather eye on early signs of executive deficits. Assuming that the [organization’s] central idea has been well formulated in the boardroom, three embryonic indicators, if ignored too long, often mushroom into far more:
   • lack of strategy,
   • failure to execute, and
   • wrong people calls.”

TOOL #9: THE BOARD'S ANNUAL EVALUATION OF THE TOP LEADER
Review these templates—and then customize your annual process so it fits your unique situation and your unique top leader! (One size doesn’t fit all.)

Tool #9 in the new resource, ECFA Tools and Templates for Effective Board Governance, is one of six assessments in Part 2 of this jam-packed 271-page resource. Conducting an annual evaluation of the top leader (CEO or senior pastor—the one person who reports directly to the board) will help boards “to keep a weather eye on early signs of executive deficits.” 

But the annual performance review is so much more than that. It’s also an opportunity to affirm the top leader, further leverage his or her strengths, and—sometimes—recommend a coach to enrich your CEO’s leadership in targeted areas.

This tool features a robust 22-page section with seven helpful resources and tools:
   1. Two Books: Two Insights
   2. Understanding the Context for the Top Leader’s Annual Assessment
   3. One Approach for the Annual Assessment of the Top Leader (Consultant Help)
   4. A Common Assessment Finding: “Delegation Deficiencies”
   5. Two Resources: BoardSource Online Assessments and CarverGuide7
   6. Four More Books: More Insights on Assessment of the Top Leader
   7. “Cut-and-Paste” Template for Online Survey: Top Leader Annual Assessment

The 10-page “cut-and-paste” template for an online survey can be dropped into most survey tools such as SurveyMonkey or others. Section D of this survey encourages boards to review their CEO’s top-five strengths from the CliftonStrengths®/StrengthsFinder assessment—and then respond to a Yes/No question, “In your opinion, do people around our CEO help him maximize these Top-5 strengths?”

There’s also space for seven open-ended questions, such as “What should our top leader STOP doing in his/her leadership role (or style) in order to become a more effective leader for the organization?” This add-water-and-stir assessment template parallels many of the 20 core competencies detailed on my Management Buckets website.

Why address strengths? According to strengths gurus Tom Rath and Barry Conchie, “While the best leaders are not well-rounded, the best teams are.” (Read my review of Strength Based Leadership.) Don’t inappropriately evaluate your CEO on strengths or spiritual gifts that were not God-given. No leader is the complete package. Instead, leverage the unique God-given gifts of your CEO—and inspire your CEO to build a well-balanced team.

Order the tools book from Amazon by clicking on this title: ECFA Tools and Templates for Effective Board Governance: Time-Saving Solutions for Your Board, by Dan Busby and John Pearson. The book gives you full access to all 22 tools and templates—formatted as Word documents so you can customize the tools for your board’s unique uses.

BOARD DISCUSSION: Why strengths? The authors of Strengths Based Leadership write, “The odds of an employee being engaged are a dismal one in 11 (9%). But when an organization’s leadership focuses on the strengths of its employees, the odds soar to almost three in four (73%).” Are we leveraging our CEO’s strengths? Are we leveraging the strengths of our board members?

MORE RESOURCES: Guest blogger Ed Morgan notes in his color commentary on “Spotting, Catching, or Exiting a Falling CEO,” that “…the cardinal sin of omission by the board is the lack of yearly evaluations against board-approved goals.” Read more in Lesson 26 in Lessons From the Nonprofit Boardroom: 40 Insights for Better Board Meetings, by Dan Busby and John Pearson.

The Big Difference Between Micromanaging and Appropriate Questioning

While I’m a big believer in ongoing research, I don’t need a high-priced researcher to answer this question:

QUESTION:
What do nonprofit CEOs whine about the most?

ANSWER:
Board members who meddle and micromanage.

Now before CEOs cast all the blame on one or more dysfunctional board members, please note that sometimes CEOs and senior staff invite those board members into the weeds—unwittingly. Staff that deliver board reports with TMI (too much information), data-heavy PowerPoints, or  nagging problems—with no recommendations—are often too tempting for some board members: “Everyone—grab a rake and start weeding!”

Warren Bird, ECFA’s  vice president of research and equipping, recently reminded me about Ram Charan’s helpful insights in “How Do We Stop From Micromanaging?” (see chapter 13 in Owning Up: The 14 Questions Every Board Member Needs to Ask. Read my review here.)

Ram Charan gives these guidelines for appropriate questions in the boardroom:
• “The difference between micromanaging and appropriate questioning is not always a bright line. What really defines micromanaging is not whether a director [board member] is digging into details. It’s really a question of which details and for what purpose.”

• “Is the director making a small point, like nit-picking expenses? Or is the director drilling down into the details that help reveal a higher-level issue—detecting a structural change, getting at the root cause of a problem, or questioning the effectiveness of a process?”

• “Asking questions of an operating nature is not in itself micromanaging, as long as the questions lead to insights about issues like strategy, performance, major investment decisions, key personnel, the choice of goals, or risk assessment.”

Charan also notes that “not all directors are self-aware.” So when Into-the-Weeds Syndrome is alive and dysfunctional in your boardroom—share this wisdom from Ram Charan and facilitate a healthy conversation on the difference between micromanaging and appropriate questioning.

Consider aligning this discussion with one of your organization’s core values or a Scripture that speaks to the value of listening to the counsel of others, such as Proverbs 11:14. Or, share the “Delegation Prayer” from Richard Kriegbaum’s powerful book, Leadership Prayers, including this:

“By your grace, my leadership will either
enhance or restrain the work of your Spirit in those who lead with me,
making them more effective or less effective.”

BOARD DISCUSSION: What guidelines should we adopt so, in most cases, we can agree on the difference between micromanaging and appropriate questioning?

MORE RESOURCES: Rich Stearns shares wisdom on helping board members avoid the weeds in his guest blog, “Apply for a Staff Position and You Can Deal With That Issue!” based on chapter 20 in Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson.

Best Board Books #5 - Owning Up: The 14 Questions Every Board Member Needs to Ask

Here’s a very, very practical book (in my continuing series on best board books)—with serious pokes-in-the-ribs for your board. Guaranteed!

Book #5: Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan

Governance Guru Ram Charan wrote in 2010, “The financial crisis of 2008 laid bare a long buried truth: that many boards do not really own the strategy of their company.”  So rate your board on a scale of 1 to 5 (5 is high). “How strongly does our board own our strategy?"

That’s just one of 13 other pokes-in-the-ribs from the author of numerous other business and governance books including The Attacker’s Advantage and Boards That Lead.

The author says that “if you have no appetite for risk, you shouldn’t be on a board; it will inhibit the CEO from making bold and necessary moves and potentially company-saving bets.”
The “go-to adviser” for corporate boards and CEOs, Ram Charan, says that boards must “own up” to its accountability for the performance of the organization and reinvent the content of their work and modus operandi.  He preaches, “Governance now means leadership.” 

Board governance often has fuzzy boundaries and is never easy—but this excellent author/authority has 14 cringe-type questions. Charan doesn’t waste words—firing this question onto the board table in the first paragraph of Chapter 1/Question 1, “Is Our Board Composition Right for the Challenge?” 

He writes, “The role of the board has unmistakably transitioned from passive governance to active leadership with a delicate balance of avoiding micromanaging. It’s leadership as a group, not leadership by an appointed person.” He adds, “With the right composition, a board can create value; with the wrong or inappropriate composition, it can easily destroy value.”

He recommends that every board member and board prospect complete a “skill assessment matrix” to assess the board’s overall strengths and weaknesses. “The process is important because a board full of generalists is not good enough anymore,” he warns. Reference checking of board members (well beyond the basic level) is now an absolute necessity. The biggest red flag to avoid: a board nominee with a big ego.

The discussion of board member succession is worth the price of the book. Insights: 1) the process may take up to three years; 2) many CEOs are limiting their service on other boards to just two, or often just their own board; 3) to get the right mix of board members—for rapidly changing needs—many boards are encouraging incumbents to step down early. (Not easy—but critical.) Perhaps most critical: “Board service is always more attractive when the prospective director knows the board has its act together—that the board is thorough in covering its bases and functions well as a group.”

Effective boards will want to use this book at an annual board retreat—or address one or two questions per board meeting over the next year or more.  The book can also be read topically, based on your current hot issues. I started with Question 13, “How Do We Stop From Micromanaging?”  All 14 have zinger qualities to them. My favorites, based on my board consulting work, include:
   • Question 11: How Can Executive Sessions Help the Board Own Up?
   • Question 12: How Can Our Board Self-Evaluation Improve Our Functioning and Our Output?
   • Question 2: Are We Addressing the Risks That Could Send Our Company Over the Cliff?
   • Question 4: Are We Well Prepared to Name Our Next CEO?
   • Question 5: Does Our Board Really Own the Company’s Strategy?

The best practices for the strategy question are both brilliant and practical—but the CEO will need to dramatically increase face time with board members. But the pay-off could be huge. He notes, “Strategy should always be in the back of directors’ minds. It helps to have the strategy brief or a two-page sheet of bullet points in the binder for every meeting.”  

Then Charan cautions us, “If the board and the CEO have lasting substantive differences, they have a choice: stay with the strategy or replace the CEO. Consider that management has a shelf life too, just like the strategy.”

BOARD DISCUSSION: After reviewing Charan’s 14 questions, what is the most important question we need to address at our next meeting? Will answering that question require a spiritual discernment process--or are we just too timid about addressing it?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.

Best Board Books #1: Boards That Lead

Board members and CEOs often ask me to recommend the best book on board governance. Of course—one size doesn’t fit all. There is no one “perfect” book for every board. It depends on many factors, as Dan Busby and I point out in “Lesson 38: Great Boards Delegate Their Reading” in Lessons From the Nonprofit Boardroom.

How would you rate your current board members’ competencies and experiences?
• Do most have previous board experiences that were healthy (not dysfunctional)?
• Does your board agree where they are on the continuum from Policy Governance® to hands-on boards? 
• Is there alignment with the 10 or more traditional roles and responsibilities of the board?

Your answers would help me suggest the “best” book for you—whether for everyone to read before your next board retreat, or for a quick “10 Minutes for Governance” book review by one board member at your next board meeting.

Over the coming weeks, I’ll suggest some of the most insightful books on board governance—some “secular” and some Christ-centered. Pick one that fits your board’s culture and needs.

BOOK #1: 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

You can read my book review by clicking here. Here’s a taste: Learning boards will discover vast insights and practical next steps in Boards That Lead:

   • Boards should ask new CEOs to draft a succession plan immediately (and the annual self-assessment should measure progress).
   • Caution! Leaders can change dramatically when they get the brass ring.
   • Nothing can make up for the wrong choice of CEO.
   • Ten principles for finding the right CEO (Warning: “Review outside consultants carefully to prevent conflicts of interest.”)
   • In risk management, why quantification alone is a false crutch.
   • The value of a one-pager with agenda/decision highlights sent before every meeting
   • The learned art of what to feed to the board
   • How to coach new board members to stay at the right “altitude” in board meetings
   • How to get maximum value from an advisory council or board (They quote Roger Kenny who says advisory boards are “like the Marines: They get you on the beach.”)

And then this PowerPoint-worthy wisdom: 

“Execution is where management starts and the board stops.”

BOARD DISCUSSION: Is our CEO “feeding us” the appropriate and right amount of information, inspiration, and context for our “heavy lifting” topics prior to each board meeting. What do you appreciate? What would improve this process?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.

Succession Planning: Does Your CEO Need a Coach?

Note: This is the sixth of 11 blogs featuring practical wisdom from the new ECFA Governance Toolbox Series No. 4: Succession Planning. Free to ECFA members, you can download the resource and video by clicking here.

Principle No. 6: Invest in Growing Your Leaders (Every Leader Needs a Coach)

Bill Conaty and Ram Charan preach this memorable one-liner in their powerful book, The Talent Masters: Why Smart Leaders Put People Before Numbers:

“Only one competency lasts.
It is the ability to create a steady,
self-renewing stream of leaders.”

These two business leaders list 12 “Leadership Pitfalls” in The Talent Masters, including “not developing your own succession plan.” Boards should memorize the list and be alert to staff members practicing this pitfall: “’Running for office’—which is totally transparent to everyone else.”

So on your journey towards succession plan readiness—how high is your board setting the bar on these two big ideas?
   1) Grow your CEO.
   2) Inspire your CEO to grow leaders.

I know. I know. The daily to-do list pushes succession preparation way down. Critical budget needs leave inadequate funds for leader development. Stop! Reflect! Pray! Consider this wisdom:

CFO to CEO:
“What happens if we invest in developing our people
and then they leave us?

CEO: “What happens if we don’t, and they stay?”

Or this from Jack Welch, quoted by Jeff McManus in Growing Weeders Into Leaders: Leadership Lessons from the Ground Level: “Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.”

Or this from Paul to Timothy: “And the things you have heard me say in the presence of many witnesses entrust to reliable people who will also be qualified to teach others.” (2 Timothy 2:2, NIV)

Principle No. 6 includes four discussion ideas for inspiring your CEO to grow—so when succession happens, your next CEO will take the baton of a healthy, God-honoring organization. 

Check it out here: 

DOWNLOAD: ECFA Governance Toolbox Series No. 4: Succession Planning – 11 Principles for Successful Successions: “Every CEO is an Interim CEO.” The toolbox includes 
   • Read-and-Engage Viewing Guide (20 pages) – photocopy for board members
   • Facilitator Guide (10 pages)
   • 4 short videos (4-5 minutes each)
   • Additional resources and succession planning tools

BOARD DISCUSSION: Does your CEO need a coach? According to Soderquist Leadership, “92% of executives who received coaching said they would be willing to be coached again.”

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.