"Some Blunt Talk About Governance"

So how should associations be governed today? The answer is: simply. But arriving at the ideal model requires shared recognition of three trends that we believe will and should shape a better future.

• Geography will no longer be a significant factor in board selection. Rather, quality and diversity will be. With increased mobility, ease of travel, and superb communication systems at our command, geography is virtually moot. What's more, within trade associations, members who represent small companies (or large companies) have much more in common than those who live west of the Continental Divide (or in the Southeast). Having local bodies choose their representatives seldom guarantees a high-quality board. Rather, it often produces a board embarrassingly similar to the U.S. Congress - incapable of acting because it has no overall strategic objectives and is consumed with parochial interests.


• The board will lead the organization to places previously unknown to members but will not attempt to manage the journey. In other words, trustees will determine what is worth doing, not how to do it.


• Associations will limit the true cost of governance to 6 percent or less of the total expense budget. Determining the true cost requires figuring all expenses, including all staff time spent before, during, and after meetings; all supporting committee and task force costs; and an accurate allocation of overhead, such as rent, postage, telephone, and so forth. Studies have uncovered actual costs of governance that run as high as 30 - 40 percent of the expense budget. This is unconscionable and unethical. Limiting these expenditures frees an association to expand its offerings for the members or who they are supposed to serve.

In many associations, putting these three basic trends in motion may require some changes in structure. However, we overwhelmingly find that the more important changes are in culture - how the association really does its business. Among the needed modifications:

1. The board should be composed of leaders and rising stars as diverse as the industry, profession, or cause it represents. What's more, these leaders should be selected nationally, which means saying goodbye to the regional selection of board members. If directors are elected from particular geographic areas, there is no way that the board's total composition ensures that key differences in interest areas, approach, age, gender, ethnicity, or background are fully represented within any given six-year cycle. To ensure representation across the membership spectrum - by design, not by default - a nominating committee should be in place year-round, working like an executive search firm to bring forward the best and brightest based on carefully established, widely disseminated, and eminently defensible criteria.


2. One or two seats on the board should be allocated for outside directors who can bring important new perspectives to the table.


3. The full board and senior staff should receive annual training on roles, rights, and responsibilities. Note: This should be very different from orientation, when board members learn when they meet and what the expense-reimbursement policies are. Every two years, this special training should be expanded to include an operational and cultural assessment process. Unfortunately, boards tend to reach out for a magic wand only when their situation is near terminal. This is generally more traumatic, more expensive, and less effective than ongoing monitoring of operations and practices, overt and covert, in a culture where learning is more important than blaming.

4. The board must then do what boards should do:


• Establish clear success measures in every area: programs and services, public policy, human resource development (members, prospective members, leaders, and staff), fiscal strength, and image and identity.


• Provide the resources to achieve success.


• Hire, support, and provide for the annual evaluation of the chief staff executive. This means giving the CEO the resources and authority, then stepping out of the way while holding him or her accountable for performance.


• Serve as the eyes and ears by staying in touch with grass-roots, lapsed, and prospective members. This will ensure that the gulf that almost always exists between what leaders and members want is dramatically narrowed.


• Check the board's traditional neediness at the door. The CEO's focus must be on the relationships that will ensure success across the long haul. This means freeing the executive to spend valuable time with staff, the general membership, and key outside contacts. The board should always get a piece of the CEO's time, but not most of it.


• Celebrate and appreciate success, applauding trustees' role in the process and communicating their enthusiasm to the general membership.

Why, despite the plethora of books, articles, and seminars, is governance virtually unchanged from the 19th-century model that basically created what we have today? Understanding the key reasons is vital:

• The unwillingness of CEOs to help shape good governance out of fear of seeming uncooperative, unfriendly, unwilling, incompetent or - worse yet - controlling. The true control of any organization belongs to those who identify the future direction and allocate the resources to get there. That role should belong to a smart, strategic board in partnership with a smart, strategic chief staff executive.


• The tradition of entitlement inherited by each new generation of board members, who expect the best suites in the house, the limo at the door, and exciting venues for their meetings. Even if these luxuries are not part of the package, needy board members often expect whatever amount of attention they want from any staff member at any time for any purpose.


• The lack of preparation for the up-and-coming chief elected officer so that she or he, when in the key volunteer position, can work effectively with the CEO in keeping the board focused on its primary functions.

With the need for speed-to-market evident in every facet of our lives today, it is essential to break the bad-governance cycle. CEOs who lead are the ones boards will increasingly seek. During a recent search for a trade association CEO, we were told that the organization wanted a strong individual because "sometimes we have to be led." The most effective CEOs have the guts to identify when a system or practice is about to break within any part of their operation or culture. The necessary companion skill is the ability to focus the board's attention on what needs fixing - and to inspire the board to repair the fault line before the next earthquake.

Linda Shinn, CAE, and Dadie Perlov, CAE, are principals of CMG, a full-service consulting firm with offices in Indianapolis, Indiana, and New York City. E-mail: lshinn@virtualcmg.com and dadie@virtualcmg.com.

From the "Executive Management Forum." Posted with the permission of the American Society of Association Executives.