Too many directors bring the wrong mindset to their role.
They dive down into the operational detail of management’s work. Act as if management is spending their money.
It’s not.
A board exists because there are too many individual “owners” to sit around the table and look after the organisation.
Instead, the owners appoint a board to “look after” the organisation. To ensure management focusses on delivering their governance outcomes, under their key role of resource allocation. Cognisant of the growth, risk and change issues facing the organisation.
In context of Modern Governance it may be best to view ownership from a broader perspective. To extend beyond members or shareholders to include all stakeholders. Staff, customers, the broader community, and all the relevant regulatory authorities.
Shareholders and members are just one vested interest. Board members acting from that one singular perspective might be misusing their position. Or be prone to accusations of bias.
One of the fiduciary responsibilities of each director is to: Act in good faith and in the best interests of an organisation as a whole and for proper purpose.
Indeed, through bringing only an “owners” mindset, some directors lose sight of the “stewardship” nature of governance – the need to govern beyond this year’s result and to leave the organisation is a better place.
In doing so, they act as if management is spending “their” money and can overstep the mark. This can muddy the waters between management and the board. It can lead to friction, distraction, and a loss of focus on the broader governance outcomes.
“It’s not your money” is one of the GovernRight Models used to illustrate how to embed the Seven Pillars of effective governance into their organisation.
To highlight the Modern board’s roles and responsibilities.
It ties in with the First Pillar - Right Roles, Responsibilities, One Team.
It underpins one of the foundation best practice outcomes of the GovernRight framework:
“A governing body that understands its role, with a should know mindset”.
If some of your board are not bringing the right mindset to meetings it is a sign that they do not understand their true role to act for all.
In which case, come with us on the GovernRight Path to Modern Governance. To understand how you can embed effective governance in your organisation.
The perfect starting point is to book your team into a GovernRight Aware Workshop, to
understand the challenges of modern governance.
start your journey to Build and Embed Modern Governance into your organisation, and drive better, more effective organisational outcomes.