Boardspan Library

Accountability: Drawing The Line

by Abby Adlerman


We’ve all heard the adage “nose in, fingers out” to describe the proper way to serve on a board. In other words: board members should monitor and advise management, not trample on their turf. But, like other proverbs, this one glosses over a much more complicated reality.

When it comes to interactions between directors and management, so much depends on the specific needs of the organization, the skills of the executives at the helm, the board’s access to information, and directors’ inherent competencies. Finding the right balance between too much board participation and not enough is key. But how?

First, success starts with a clear understanding of roles. Which tasks fall on management’s side of the line? Which on the board’s? Some responsibilities, such as strategy, straddle the diagonal. But who sets strategy? Who monitors its implementation? Who makes recommendations in real time for adjustments? Everyone should know who is responsible for what, and why.

Second, lines can be redrawn, and should be when necessary or appropriate. Organizations must be dynamic in order to respond to challenges and opportunities. If a board needs to address responsibilities typically held by management, everyone should know why and for how long. (A board that constantly feels the need to intervene may be—consciously or not—covering up more systemic failures that need to be addressed by a change in management.)

On the other hand, organizations that are performing well can look ahead to long-term goals and strategies, shifting their diagonal to be more forward-leaning. A board in this situation has the freedom—and responsibility—to focus on the future. What problems are on the horizon and how can the organization better prepare for them? What opportunities are opening up in the market and how can the company best pursue them?

Of course, a board should never forego its responsibilities to oversee and monitor—to nose in—but neither should it lose sight of the deft touch its fingers can provide in steering towards the future.

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Abby Adlerman is CEO and Founder of Boardspan.

 

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