Should the Board simply TRUST that all is well?

I had a very interesting discussion recently with a professional association's Executive Director (the chief staff officer). The association was having difficulty retrieving some important association documents from a member of their Board.



My first question was, "Why is a Board member in possession of the documents in the first place?" I was informed that in response to some difficulties with previous employees of the organization, the Board decided to have a Board member hold onto them -- someone they trusted. Clearly, that didn't work for them, did it.



This whole issue comes down to the Board's responsibility to ensure effective management. And, in my view, ensuring effective management simply can't be limited to identifying someone in whom the Board feels comfortable placing their trust.



Simply trusting that something (the right thing) will be done has burned more Boards than I could possibly identify if I blogged every day for the rest of my life. Trust is nice, but it provides little or no protection.



The failure here is that the Board has no policies in place to guide the both the staff and the Board on their financial management and administration activities. And I say Executive Director, because administration is a staff job, not the job of the Board. Policies are the rules - the Board needs to make the rules clear, then monitor the Executive Director's compliance with those rules. That is how they can ensure effective management of the association. Setting the rules (policies) and monitoring compliance with those rules is a critical governance responsibility that too often is overlooked - the failure of corporate, private, public and not-for-profit sector organizations can often be tied to this critical omission.



Sandi L. Humphrey, CAE

sandi@sandihumphrey.com