Monday, February 3, 2014

Competency 1: Understanding the management vs governance difference

Today, I launch a weekly series expanding upon the core nonprofit board/governance competencies that I outlined in my last post. Each Wednesday, for the next 10 weeks, I will offer additional insights into one of the competencies.

Core board competency 1: The capacity to recognize and respect the functional differences between management and governance.

One of the bigger challenges for many nonprofit board members is remembering that their ultimate responsibility is governance, not management of day-to-day activities. Understanding and respecting the difference is critical to boards focusing their energies.

There are at least a couple of reasons that boards can sometimes teeter over the management edge. 

One, we haven't done a great job of articulating what nonprofit governance really involves. When their real responsibilities are unclear, smart adults will turn naturally to what they know best, e.g., the kinds of management roles that they assume in their daily work lives. What clarity we do have has tended to fall on monitoring roles, which frequently translates into obsessing about every line item in the financial statement (and the slippery slope into queries about day-to-day activities).

Two, management functions usually are more visible than governance roles. We can see "management" and respond, whereas governance invites more abstract kinds of thinking. When we dip our toes into the management pool, we often can identify "evidence" that we are doing our job. Well, not our job....

Now, I realize that the line between management and governance can be a fine one. I also realize that, for some smaller and/or newer nonprofits, there may be literally no one else to perform management functions.

But remember: governance is the sole responsibility of the board. If we're so distracted by the day to day that we neglect the future, we are neglecting our ultimate purpose - and the future of our organizations and our community.

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