When Ownership Goes Awry On Your Board

The feeling of ownership is a powerful, positive force in organizations, especially at the board level. Ownership fuels commitment to such important governing “products” as an updated strategic plan, the annual operating plan and budget, and a new policy covering the contracting process. As all really board-savvy CEOs well know, when their board members feel like owners of their governing decisions, they are much more likely to stick with them through thick and thin as they’re transformed from words to action.

Experience has taught that there’s only one sure way to turn board members into true owners of governing products like the updated strategic plan: through meaningful involvement in shaping the product – early enough in the process to make a real difference. For example, board-savvy CEOs frequently engage board members in identifying strategic issues – both challenges and opportunities – at the front end of the strategic planning process, typically in a retreat setting, before specific goals and strategies have been formulated. By contrast, if board members are engaged only at the tail end of a process, as an audience for finished staff work that they’ve played little or no role in shaping, the likelihood of their feeling like committed owners is virtually nil.

So ownership is for the most part a powerful force for good, which is why CEOs spend lots of time thinking about processes that will foster ownership among their board members. But ownership can go awry, causing real problems, if it’s the wrong kind of ownership: the kind driven by individual board members’ ego satisfaction and comfort rather than a commitment to effective governance. To take a real-life example, a few years ago I was facilitating a retreat discussion about how a new board planning committee, replacing the old-time finance committee, might engage board members at the policy level in shaping the annual budget document – well before getting into detailed cost projections. At the break, a long-tenured board member who’d chaired the finance committee for the past ten years pulled me aside and – her voice quivering with emotion – told me in so many words that she wasn’t about to sit back and watch us dismantle her finance committee after years of learning the ropes as its chair. What was patently obvious was her attachment to an ego-satisfying, comfortable role as chair of the finance committee – a role she wasn’t about to lose without a battle, no matter how compelling the case for a new planning committee might be.

What can you do to prevent unhealthy, ego-driven ownership from developing on your board? In my experience, three steps have proved useful: (1) establishing and enforcing term limits – typically a maximum of two consecutive three or four-year terms; (2) rotating committee chairs annually or biannually; and (3) avoiding the recruitment of board members on the basis of functional expertise (for example, reserving a board seat for a financial expert to whom other board members will defer when dealing with financial issues).

Doug Eadie