Transforming The Astor Home Board into a Higher Impact Governing Body

James McGuirk, PhD, and Doug Eadie

November 26, 2008

A COMPREHENSIVE GOVERNANCE RE-DESIGN

• Adoption of a “Board governing mission” setting forth the key responsibilities of the Board as Astor Home’s  governing body (e.g., “Serves as the steward and guardian of the Astor Home’s values, vision, mission and resources;” “Monitors Astor Home operational performance [both programmatic and financial] against clearly defined performance targets”) 
  
  
• Establishment of a new structure of  Board standing committees that correspond to the Board’s broad governing functions and that consist only of Board members:  Board Operations; Planning and Program Development; Performance Oversight and Monitoring; External Relations/Resource Development; and Audit
  
  
• Adoption of a set of standing committee guidelines aimed at ensuring committee effectiveness (e.g., every board member’s serving on only one standing committee; all matters coming to the full Board through the standing committees; regular rotation of committee chairs and members)
  
  
• Assigning responsibility for the Board’s management of its own governing performance (primarily setting performance targets and monitoring performance) and for maintaining a close, positive, and productive Board-Executive Director/ CEO working partnership (principally through an upgraded CEO evaluation process) to a particular committee:  Board Operations
  
  
• And revising the Astor Home Bylaws to support implementation of the governance improvements

These governance changes represented a real paradigm change at Astor Home: from a Board that was unclear about its role, tended to serve as an audience for finished staff work, and was under-involved in key decision making processes such as strategic planning to a Board that provided much stronger leadership within the framework of a clear, detailed “governing mission.”  As this is being written, these changes in Board role and structure have been implemented.  The Board’s governing mission is guiding the Board’s deliberations, and the new standing committees are functioning as true “governance engines” that operate within the framework of the guidelines that were adopted.    These changes might appear undramatic at first blush; they are certainly well within the mainstream of nonprofit governance.  However, asking very busy Board members to devote the time and energy required to get a new committee structure up and running effectively and to take on a far more active role in managing their own governing performance was a significant change challenge, no matter how committed the great majority of Board members were to higher-impact governing.

WHERE MORTALS FEAR TO TREAD

Over our combined 50-plus years of experience as nonprofit executives and consultants, we have learned that large-scale, well-planned, and systematically managed change tends not to happen - not in the real world anyway.  The odds are so heavily against it that you will not meet many fellow travelers on the change road.  Of course, in the rapidly changing, always challenging world that all of us live and work in these days, people and organizations are constantly changing, often in important ways.  However, more often than not, in our experience, such change happens TO people, rather than being planned and managed BY them.  Take, for example, a nonprofit agency whose state funding has been cut back dramatically due to a souring economy.  This is certainly change – but unplanned and unwanted change, to be sure.

No reader is likely to be surprised by what we have just observed; nor are the reasons for a lonely change road all that hard to figure out.  For one thing, you are not likely over the course of a lifetime to meet many people who truly love changing in major ways; in our experience, the normal desire to avoid extreme discomfort, much less to risk failing at doing something new, is widespread among all types of human beings.  Then there is the very common ego attachment to the way things are, which often creates counterproductive nostalgia that exhibits itself as tremendous inertia that can slow or kill change.  For example, one of us was recently working with a board and CEO on implementing a new committee structure for the board.

BEATING THE ODDS AT ASTOR HOME

Astor Home could never have made the far-reaching changes in the Board’s governing role, structure and processes that were launched in February 2007 by taking the traditional path:  merely have a consultant come up with recommendations for change and then attempting to sell Board members on their merits.  Attempts to drive change from outside are notoriously ineffective, in our experience, quickly succumbing to resistance from board members and executives who feel only scant ownership of the proposed changes.  Instead, rather than relying on the high-risk, outsider-driven approach,  Astor Home employed a meticulously-designed “Governance Task Force” consisting of seven Board members and the Astor Home Executive Director/CEO as the vehicle for coming up with the recommended changes in the Astor Home Board’s role, structure and processes.  With the assistance of a governance consultant who facilitated Task Force meetings and prepared material for Task Force review, the Task Force developed the governance improvement recommendations that the Board adopted in February 2007.  The success of the Governance Task Force as a governance change vehicle was largely due to 5 factors: 

1.The Astor Home Board Chair not only headed the Task Force but was also an enthusiastic advocate for stronger governance and was an active participant in the Task force’s work.

2. The Task Force employed a rigorous, transparent methodology in carrying out its charge, thereby lending credibility to its recommendations for strengthening the Board’s governing role and structure.  It was patently obvious to other Board members that the Task Force hadn’t rushed to judgment or advocated pet, preconceived solutions in coming up with the recommendations.

3. The Astor Home Executive Director/CEO, drawing on his extensive governance and change management experience, played a very active “change agent” role from beginning to end:  taking the lead in finding the consultant to serve as “Governance Counsel” to the Task Force; developing the detailed Task Force charge; working hand-in-hand with the Task Force Chair and Governance Counsel in developing Task Force agendas; exercising rigorous quality control in reviewing materials developed for Task Force meetings; and serving as Governance Counsel’s liaison with the Astor Home Senior Leadership Team.

4. The Task Force was provided strong assistance by the consultant serving as Governance Counsel, including the preparation of draft sections of the Task Force Action Report for review and facilitation of Task Force work sessions.

5. And all Task Force members participated in presenting their recommendations at the February 2007 Board meeting:  peers presenting to peers, rather than an outside consultant attempting to sell the Board on change.

We believe that the Astor Home experience in using a governance task force as a change vehicle can provide your nonprofit with a model that, with appropriate tailoring, you can apply in your organization in both designing change and ensuring its implementation, overcoming the odds that make traveling the change road a lonely experience.

GETTING THE GOVERNANCE TASK FORCE UNDERWAY

On October 31, 2006, Astor Home Board Chair Steve Kelly appointed the Governance Task Force, charging it to “generate an Action Report for presentation to the Board of Directors, consisting of detailed, practical recommendations for strengthening the Board’s governing role, structure, and processes.”  In his charge, Steve pointed out that Astor Home was “blessed with highly qualified, strongly committed Board members who are quite capable of moving toward higher impact governance.”  Therefore, he continued, the work of the Task Force was aimed at “turning an already excellent Board into an even stronger governing body.”  The Task Force consisted of six Board members in addition to the Chair, Steve Kelly, and Jim McGuirk, the Executive Director/CEO. 

The first step the Task Force took was to have the Task Force Chair and Executive Director identify a consultant to assist the Task Force as “Astor Home Governance Counsel.”  The consultant selected as Governance Counsel to the Task Force brought 25 years of  experience in working with nonprofits of all shapes and sizes in fashioning and executing governance improvement strategies.  Early on, the consultant facilitated Task Force agreement on the key steps in the process of developing the Task Force Action Report to the Board:

1. Reach detailed agreement among Task Force members on the “design guidelines” that should govern the work of the Task Force and on the highest priority governance issues that the Task Force should address in fashioning its action recommendations.

2. Within the framework of the design guidelines and governance issues, fashion concrete action recommendations.

3. Fashion and execute a strategy for presenting the Action Report to the full Board in February 2007.

Since early Board agreement on the Task Force design guidelines and the analysis of governance issues deserving attention were a critical step in building Board ownership of the ultimate Task Force recommendations, we would like to take a closer look at each of these building blocks.

TASK FORCE DESIGN GUIDELINES

The design guidelines, which were developed over the course of the first two Task Force work sessions were intended to establish a framework for Task Force deliberations in the form of key definitions, principles, and assumptions.  By making the guidelines crystal clear at the get-go, the Task Force undoubtedly saved quite a bit of time that might otherwise have been wasted in debating possible changes as the process moved forward.  The preeminent guideline – indeed, the foundation stone for the whole Task Force effort – was a definition of the Board’s governing role:

“To play the leading role (working closely with the Executive Director/CEO and the Executive Team) in continuously answering 3 preeminent questions that determine what the Astor Home is all about:  (1) Where should the Astor Home be headed – and what should the Astor Home become – over the long run in terms of customers/clients, programs, services and products, finances, organizational structure, etc.?  (2) What should the Astor Home be now and in the near term?  (3) How is the Astor Home performing – programmatically (with special attention to client satisfaction), financially, and administratively?  In answering these key questions, the Astor Home Board of Directors makes judgments and decisions that flow along 4 broad governing streams:  (1) board operations; (2) strategic and operational planning; (3) performance oversight and monitoring; and (4) external/stakeholder relations.”

Having reached agreement on this broad definition of the Board’s governing role, the Task Force then worked out more detailed guidelines to govern its work, for example:

• The Task Force’s recommended enhancements in Board role, structure, and process should be aimed at moving the Astor Home Board toward higher-impact governing.  High-impact governing  work is defined as Board decisions and judgments that:  (1) involve Board members creatively and proactively in leading the Astor Home as a nonprofit corporation; (2) capitalize on the Board as a precious Astor Home resource, taking full advantage of Board members’ knowledge, experience, expertise, and diverse perspectives; (3) make a significant difference in the affairs of the Astor Home; and (4) effectively address the preeminent strategic and operational issues facing the Astor Home.
  
  
• In fashioning its recommendations to strengthen the Astor Home Board of Directorss’ governing role, structure, and processes, the Task Force should take taken full advantage of recent significant advances in the rapidly developing field of nonprofit governance, and of the real-life governance improvement efforts of other nonprofit agencies around the country.
  
  
• The Task Force’s recommended Action Steps avoid grandiosity and over-reaching.  Rather than engage in radical reform, the Task Force should focus on updating the Astor Home Board’s role, structure, and process in the interest of higher-impact governing, while retaining practices that work well.

GOVERNANCE ISSUES

The Task Force devoted two lengthy work sessions to reaching consensus on the key Astor Home governance issues that needed to be addressed in the Task Force Action Report to the Board.  Everyone understood that, without detailed agreement on the highest priority issues, there would be a clear and present danger of falling into the all-too-common trap of debating preconceived solutions to undefined problems.  Governance Counsel provided the Task Force with a preliminary issue analysis based on his in-depth interviews with Task Force members, his review of extensive Astor Home governance documentation (such as the bylaws and the minutes of several Board meetings), and his experience in working with many similar nonprofit corporations.  Taking this preliminary analysis as a starting point, the Task Force hammered out a detailed issue statement, which dealt with such issues as:

• The Board’s need to realize “ its tremendous leadership potential more fully in practice.”  
  
  
• The absence of a detailed, agreed-upon description of the Board’s primary governing responsibilities and its detailed governing functions
  
  
• The need to update the current structure of Board standing committees to “correspond to the major streams of governing judgments and decisions” that make up the Board’s governing work:  strategic and operational planning; performance oversight and monitoring; and external/stakeholder relations.  “The absence of a contemporary standing committee structure is the primary impediment to the Board’s fully realizing its tremendous governing potential.” 
  
  
• The Board’s need to devote more systematic attention to “managing itself as a governing body, regularly developing its composition to ensure strong corporate governance (particularly through developing and periodically updating a profile of desirable Board member attributes and qualifications and establishing clear Board membership diversification targets) and managing its own governing performance (setting governing targets and monitoring the Board’s governing performance).” 
  
  
• The Board’s need for a “more fully developed” in three key governing areas, in which Board members are clearly under-involved: strategic planning; operational planning/budget development; and external/community relations
  
  
• The need to pay more “systematic attention” to managing the working relationship between the Board and the Executive Director.
  

SHIFTING FOCUS:  FROM “PRODUCT” TO SALES

The full-fledged Governance Task Force Action Report that was transmitted to the Board a two weeks before the February 2007 Board meeting was a carefully crafted , highly detailed document almost 50 pages long that was intended not only to clearly explain the action recommendations, but also to provide Board members with a detailed framework for understanding the actions they were being asked to take:  the process the Task Force had employed in developing the Action Report;  the design guidelines that directed the Task Force effort; and the key governance issues that the recommendations were intended to address.  The Action Report also provided implementation counsel and useful backup information (for example, detailed functional descriptions of each of the recommended new standing committees).

Even though we wanted the Action Report to be self-explanatory, the Task Force assumed that it would not speak for itself.  So a detailed PowerPoint presentation covering the key points in the Action Report was developed, and it was agreed that the Task Force all Task Force members would be involved in making the presentation and in answering their colleagues’ questions.  Feedback after the February 2007  Board meeting indicates that the Task Force presentation  had its intended impact:  telling one and all that the Task Force really did “care enough to send the very best” and signaling that Task Force members were strong advocates of – and “change champions” for – their recommendations.

THE PROOF’S IN THE PUDDING

The overwhelming support for the Task Force recommendations at the February 2007 Board meeting  (the various enabling resolutions moved by the Task Force were  unanimously adopted) and the subsequent translation of the Task Force Action Report into actual Astor Home practice certainly appear to validate the work of the Governance Task Force.  Most importantly, since adoption of the new governance structure, the Board’s governing work is much more focused and efficient.  There is no question that engaging a Task Force of senior volunteers as change champions really did make a significant difference, especially in legitimizing the recommendations. 

It’s quite possible that the same results might have eventually been achieved without the Task Force, but we feel confidant in saying that it would very likely have taken much longer and the change journey would almost certainly have been more painful.  So our counsel to the reader who is contemplating tackling change of the magnitude of the Astor Home’s governance reforms is at least to seriously consider engaging volunteer leaders in a task force, as part of a carefully orchestrated process involving well-planned interaction with the full Board – as a very practical mechanism for overcoming the many obstacles you are likely to encounter along the change road.

James McGuirk is Executive Director/CEO of the Astor Home for Children, and Doug Eadie is president & CEO of Doug Eadie & Company.  Readers can reach Jim at JMcGuirk@astorservices.org and Doug at Doug@DougEadie.com.

 

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