The Journey to Good Governance

Governance Associations Now July/August 2015 By: Katha Kissman and Beth Gazley

There has never been so much pressure on boards to live up to stakeholder expectations. Most association executives have a book or two on good governance on their shelf. Yet many still ask, "We know what we are supposed to look like, but how do we get there?" New ASAE Foundation research provides some answers, examining associations that have made the journey.

Deepak Chopra reminds us, "The highest levels of performance come to people who are centered, intuitive, creative, and reflective—people who know to see a problem as an opportunity."

We've all had days when it's hard to see the opportunity in every challenge. However, in nonprofit governance, change often begins by recognizing what seems to be hampering a board's performance. A board member may think, "Something is not right on this board. Why can't we get more done?"

Awareness is a good start. Next—and harder—is getting the status quo to change.

In Managing Change, Todd Jick writes, "There are no sure-fired instructions for successful change." Perhaps, but having done the research on governance change, we do find a clear set of options. Our goal with Transformational Governance: How Boards Achieve Extraordinary Change (Wiley/ASAE, 2015) is to help association boards manage the path to a better governance model.

The study is built on focus groups and structured interviews with more than 100 association leaders who represent the full diversity of association life. These individuals were referred by governance experts or participated in the ASAE Foundation's 2013 Good Governance Survey. When we reapproached them to ask if they would help us understand how they got to high performance, a large and generous group were willing to share their stories.

By collecting real-life case examples and analyzing them in the context of the strategic management literature, we discovered that successful board change reflects several common principles. We learned, for example, that transformational governance change, in many cases, requires profound internal restructuring of bylaws, roles, policies, board meetings, and board member eligibility.

The initial identification of a need for change takes many forms. It follows growth and leadership transitions—some planned, some not—and can be proactive or reactive. Change occurs as a result of internal or external events, association mergers or acquisitions, restructuring or downsizing. It happens in healthy associations as well as those that are struggling.

Regardless of its origins, the process of governance change has some common characteristics. Managing governance change successfully typically involves three key activities: listening, planning, and supporting those affected.

Diagnosis and Learning

Many association leaders described a process of appreciative inquiry to identify the positive qualities they already possessed that would support successful change. They began by acknowledging strong cultures of learning and self-assessment, a healthy reserve of trust between staff and board members, or a culture of adaptation because it was the nature of the industry or profession they were in.

One study participant described an early but crucial decision point when she relied on her association's existing culture to move forward.

"I had built a good deal of social capital to take the organization to the next step," she said. "We had done all the buffing and polishing that we could, and I knew we had to go to the next step [to change our governance model] to really make change. I also knew that we had [the right] board president at the time … to make it happen. When I first presented the 'call to action,' it was eerily quiet. I was very worried—I blew all my social capital in one fell swoop. Then the conversation started."

This comment highlights another important point: that governance change begins when the status quo is challenged but really takes off when other constituents understand its link to larger organizational needs. This sentiment became a consistent theme in our study—governance improvements were about more than board-specific needs. Most often, governance changes were required to secure the future of the entire organization.

Action Planning

A first conversation may be to ensure the majority of stakeholders agree that planned change is desired, even if the objectives are not yet clear. That conversation might include these elements:

Identifying the problems the organization faces. Problems are best expressed as real threats rather than a lack of specific solutions (which come later). Some boards and CEOs in our study reported member dissatisfaction, apathetic board members, missed opportunities, and other real threats to their association's future.

Developing a clear change vision. John Bryson, an expert on nonprofit strategic planning, emphasizes the importance of clarifying an organization's mission and vision early in the planning process. Without a clear understanding of the goal, the ensuing planning process may not be productive. This lesson applies equally to change at the board level.

Considering the impact change will have on employees, members, and other stakeholders, and then planning for it. In several instances, boards planned for slower change processes than they truly desired to ensure their "old guard" members felt supported and respected as they adapted to a new status quo.

Committing to manage the process through a thoughtful strategy. This is the stage where board members make a commitment to see through the change vision regardless of circumstances. For example, in one remarkable case, an association's board committed to seeing through an agreed-on bylaws change that would terminate their roles and create an entirely new board.

Moving from awareness of a need to a plan of action—to planned change—is important because it's the best way to maintain control over the outcome. Boards can create the change they want by implementing these nine components of planned change:

  • Establish a change leadership team.
  • Document the case for change.
  • Develop a preliminary vision for the change.
  • Define the impacts on those affected by the change.
  • Create a preliminary implementation strategy and action plan.
  • Identify measures of success.
  • Develop a communication strategy.
  • Develop a training strategy.
  • Develop a method for measuring results.

Support for People Affected by Change

Change engenders passion and emotion. Disagreements or conflicts may erupt. Paying attention to these dynamics and actively honoring the human element require commitment, compromise, and work. This takes active management.

Recognizing that a board is a team is a first step. These often relative strangers, who come from different backgrounds and geographic locations and who have varied personalities, come together possibly only four to six times a year. Adapting to complex group dynamics while serving the mission, dealing with operational goals, and making important decisions in a limited amount of time require strong leadership, focus, and heartfelt work on the part of every person involved. Board members who make a commitment at the outset to understand relationships, trust fellow members, and accept a common purpose will find that banked social capital pays off later if and when the board has to change the status quo.

And success comes from a willingness to embrace the journey, not just the destination. Our research saw this happening best when organizational leaders embraced a love of learning. Leaders found enjoyment in the feeling of self-efficacy that came with facing new challenges with a much bigger skill set—that is, through the board's greater capacity to learn. Doing the background research on governance models, employing outside expertise, and using data to build strong evidence-driven arguments for a better model gave boards confidence along the sometimes arduous journey of convincing others to change.

We also heard from change agents who understood the need to invest in managing people to bring others along on this journey with patience and respect. One leader told us, "Change takes time and patience. I had to get my ego out of it. I could not be defensive. It wasn't going to be solved with one step."

The Journey to Results

One surprise to us was that while successful associations ended their journey with clearer agreement on strategies, their collective goals were often not so clear at the outset. Board leaders could tell us at the end that they were now more strategic, representative, nimble, knowledgeable, and able to serve their members better. But they may not have set out with such a clear vision of the goals.

Nonetheless, many in our study found the following were necessary to achieve the smart, resilient, flexible, strategic, and entrepreneurial board of directors they became:

  • They simplified bylaws and relied more on ad hoc task forces to structure flexibility into their decision making.
  • They met more often to maintain the pace of change.
  • They used their time more wisely, with more carefully structured meetings.
  • They recruited and prepared board members more carefully, to ensure board members brought more than representative value.
  • They invested in self-education and self-evaluation.

This journey requires a real commitment of time and energy. Two-thirds of study participants reported a time commitment of three or more years to implement governance changes. Boards often reported spending more time governing.

But that investment produces worthwhile returns. Our research strongly suggests that for those that see the journey through, operating in less rule-bound and more nimble and efficient governance systems will generate greater collegiality, more successful staff hires, and a more successful alignment of mission and culture.

[This article was originally published in the Associations Now print edition, titled "Getting to Good Governance."]

Katha Kissman

Katha Kissman is president and CEO of the Harbor Branch Oceanographic Institute Foundation and is a BoardSource senior governance consultant.

Beth Gazley

Beth Gazley teaches nonprofit management at Indiana University-Bloomington and has been a long-time research collaborator with the ASAE Foundation and consultant on nonprofit management and governance.