Leadership and Governance

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Leadership and Governance Ralph Michell, Head of
Policy, ACEVO

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ACEVO

• Who are we?
• What keeps our members awake at night?
• Why?

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Boards and CEOs

• CEO is at a pivotal point in the organisation
• Board act collectively as the CEOs line manager,
  but in reality often delegated to the chair
• Focus for information flow to and from the board
• CEO has a crucial role in governance whether or
  not they are on the board

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Governance vs Management

• Governance vs Management

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Governance vs Management

• Management is defined in opposition to
  governance, the day to day activity involved in
  implementing the higher-level, longer-term
  decisions of the board
• Governance is also a more reflective and
  intellectual activity than management, requiring
  a more far-sighted and less hands-on approach

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Bob Garratt

• The problem is that virtually all the boards I
  have seen do not see directing as a proper
  job. It is often seen as an add-on luxury to be
  fitted in after the real work of managing is
  done, or as the reward for a long and successful
  executive career. The idea that this is a new and
  different career step for which they need to
  retain rarely occurs to them.

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Reserved powersof the board

• Example from a medium sized charity with an
  experienced staff team.
• The board's key functions, which cannot be
  delegated, are as follows
• Developing strategy
• Agreeing the organisations vision, values and
  strategic plan,
• Approving, through the budget, the allocation of
  resources to achieve the objectives set out in
  the strategic plan,
• Agreeing or ratifying all policies and decisions
  on matters that might create significant risk to
  the organisation, financial or otherwise.
• Monitoring implementation
• Setting and maintaining a framework of
  delegation, performance monitoring and internal
  controls,
• Approving the appointment, employment and
  remuneration of the organisations chief
  executive.
• Compliance
• Ensuring compliance with the organisations
  objects, purposes and values, in accordance with
  its governing document,
• Ensuring that the organisation complies with all
  relevant laws and regulatory requirements.

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Chair and CEO relationship

• Chair CEO relationship

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Chair and CEO relationship

• A microcosm for the governance of the whole
  organisation
• Its crucial to invest time, thought and energy
  in the relationship between chair and CEO. It
  needs hard, honest work this can be difficult
  but it is absolutely necessary.
• Debby Ounsted, Chair of the Joseph Rowntree
  Foundation
• Good recruitment and induction is critical for
  both chair and CEO

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Chair and CEO relationship

• Cadbury specifies two fundamental conditions for
  an effective chair/CEO relationship
• First, that the chairman and the chief executive
  see their jobs as complementary and not as
  competing they have to ensure that their
  responsibilities match to make up a coherent
  whole.
• Second, that the two individuals have to trust
  one another.
• There is not a clear definition of what is the
  role of the chair and the role of the CEO, they
  need to each define this for themselves

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Chair and CEO relationship

• The following priority areas should be addressed
  by every chair and CEO in building an effective
  working relationship
• Mission chair and CEO need to develop and
  communicate a shared understanding of the
  organisations purpose and strategic priorities,
• Roles these should be defined and respected,
  with the emphasis on preventing gaps, overlaps,
  and any territorial disputes,
• Results the relationship should have a positive
  impact on the organisation, rather than being
  (merely) positive and enjoyable for the
  individuals,
• Mature communication dispassionate and high
  quality communication are essential. Emotions
  should be kept firmly in check passionately
  expressed views can be damaging in some contexts,
• Public unity chair and CEO should aim to present
  a solid and united public front on issues of
  fundamental importance,
• Mutual support the chair and CEO should ensure
  each other is aware of any important and relevant
  information, and be willing to act as
  confidential sounding boards.

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Chair and CEO relationship

• It is precisely because there is so much common
  ground between the two posts that the mapping of
  their respective territories should be the
  starting point.
• Cadbury
• There is a great delicacy in defining the roles
  of chair and CEO within third sector
  organisations. It doesnt really matter who is
  performing the role of leader in most contexts.
  Whats important is that you know who is.
• Baroness Jill Pitkeathley, a founding member of
  ACEVO
• New chairs often inherit their CEOs, who may
  only have been recruited just before the new
  chair. They may well be able to work together
  effectively, but organisations should be wary
  about such timing. Ideally the new chair should
  have a role in appointing a new CEO.
• Catherine McLoughlin, Chair of Age Concern

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If it goes wrong

• If it goes wrong

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Common governanceproblems

• Poor chair-CEO relationship
• Boards getting too involved in management
• Trustees fulfilling representational rather than
  governance roles
• Boards dont have the right information to make
  the decisions they need to make
• Poor induction, training and appraisal
• Lack of shared vision for the whole board
• Founder syndrome
• Poor chairing
• Board members are intimidated by experts
• Poor diversity of skills

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Trustees matter

• So be prepared to be inducted, trained,
  appraised, invest time
• But its about people getting on, not rocket
  science
• Theres lots of support available (charity
  commission, trustee network, ACEVO, NCVO)
• And its fun, good for you and good for the
  world.

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• QA