Transcript of One Question Podcast – Important questions a Board can ask itself:
Welcome to the One Question Podcast from O’Brien Governance Design. We specialise in corporate governance for the public and not-for-profit sectors. I’m Will Francis, and in each episode I ask Trish O’Brien a different question about corporate governance. So what’s our topic today, Trish?
Well, we’ve talked about the important role the Board plays in asking questions and they do that to assure themselves about certain things, but also to support the executive in thinking through how something is being approached. And I really like the idea of the Board having a set of prompts to hand that will help them and how they make decisions. And so the question we’re going to discuss today is what questions can Board members pose to help them to make significant and difficult decisions?
And how do you think that will help the Board? Because surely they’re being asked to make all sorts of decisions all the time?
You know, first of all, you’re right, the Board makes lots of decisions and often those decisions, they’re quite routine and they don’t actually require any support as such. Sometimes the Board is being asked to make a significant decision and, you know, that could be a decision that it knew it was going to have to make or it could be a decision that it didn’t anticipate having to make. And I think that in either context, it can be really helpful to have an external and kind of objective reference point. So kind of a series of decision making criteria as it were to just run those decisions through. And I think that could be done by posing questions.
So if we first take an example where they’re being asked to make an important decision that they knew about in advance, what kinds of questions are you thinking would be helpful?
Okay. Well, if we take the example of a public sector body, or a not-for-profit organisation, maybe they’re developing or revising an approach to some aspect of its business. And maybe the Board has been told at the start of the year that this piece of business will be coming to it at some point for review. So it’s not a surprise, but if we imagine that it’s an important policy or procedure and they want make sure that they’re satisfied with what’s in front of them. So, the kinds of things the Board might want to ask about are you know, has consultation taken place to support the decision? Has there been some consultation undertaken by the executive before they’ve presented it?
If appropriate, has data or research been provided to the Board to support what they’re being asked to look at? Is what they’re being asked to look at, is the decision they’re being asked to make, to approve this thing, is it consistent with the mission, vision, values of the organization? So, you know, if we imagine a value could be inclusivity, maybe the policy or procedure is excluding rather than including, is that an issue? Have the risks associated with the decision been considered? So again, if this is a new policy or procedure coming through, that could change the risk rating of that particular issue. So has that been thought through? Has impact been considered? And, you know, often you find that new approaches might be approved or decisions are made to change things, but the impact isn’t always looked at in great detail.
So has the internal impact and the external impact been considered. Another point might be, you know, if something is quite complex and something is going to change within the organisation and some new procedure is coming in, does the Board have the expertise to make the decision? So, you know, Board members are there for good reason, they’re very expert, but they also sometimes require some external assistance or support in making a decision. So, are they actually in a position to make this decision, and on the other side of it, does the executive actually have the expertise to implement this thing when it happens? So, you know, again, if something is going to change, does the staff need some professional development to implement this change, you know have progress indicators been identified to sort of inform the implementation?
So again, if approach is changing, how is the Board going to stay in touch with that? Are there indicators of how that change should be progressing over time and has the best approach communicating the decision again, in this case, a new policy or procedure has that been considered? And this is often where things fall down. Change is made, it’s not communicated particularly well internally, maybe not well communicated externally, maybe the rationale hasn’t been explained. So again, just having that objective set of things to kind of run through so that the Board can satisfy itself, that those kinds of angles have been considered when they’re being asked to make a big decision.
And what about a situation where a Board has to make a decision that it wasn’t expecting, but that might have big implications?
And that happens, of course. It’s not always welcome. In extreme cases, you know, we’ve seen media attention when Boards have had to make very difficult decisions, and lots of decisions have to be made that are less public. But they’re no less difficult, you know, you could have quite difficult human resource issues for instance, or something else.
Yeah. So what kinds of criteria or questions could be applied in those instances?
So again, I mean, we don’t know what the thing is, and we don’t know what the unexpected nature of it might be, but in a way, it doesn’t matter. And I think that’s part of the point of having these kinds of objective questions, because some of them will apply some of them won’t. But, they do help you to think through. So some of the things might be, you know, does this decision need to be made now? So you might have something being put in front of you as a Board, but actually are you being pushed into making a decision? Is it the right time to make the decision? Could the decision be deferred, etc.? Another thing might be, has this decision been made previously? Now I know this sounds quite strange, but sometimes Boards are asked to revisit decisions.
You know, you feel that you’ve made a decision or you gave a clear direction and it’s coming back to you again. So, you know, just good to call that out sometimes and say, well, has that actually happened? And why are we visiting this? Will the decision set a precedent? Very important to think about when you’re in the heat of the moment, when you’re in the heat of the issue. And you know, the Board is maybe being maybe not necessarily pressurized, but it has to make a decision about something. But it has to also think about what are the implications of this in the future? Is this setting a precedent. Does the Board have enough information to make the decision? Has the executive documented the thing that has to be decided and has it included options? So, you know, the executive will certainly make a recommendation to the Board, but maybe also it should be giving it options to show that it has actually thought out a couple of different ways that this thing could be approached.
Has there been enough time given by the Board to discussing the issue. You know, if Board members feel something’s being pushed through, and there hasn’t been enough consideration given maybe it should be halted and a special session held where more consideration is given. And then, has the best approach to communicating this decision being considered? And again, going back to communication and particularly if this is a difficult issue, has it been thought through how the decision has been come to, what the rationale was for that? And, and has it been considered how that’ll be communicated internally and if appropriate, how it will be communicated externally?
Yeah. Makes sense. So are you advocating that a Board has a series of these types of questions on standby that they can then bring out to support them in making good governance decisions?
Yeah, exactly. And you know, when important decisions need to be made, particularly if they’re unexpected, it can be just so easy to become focused on the specifics of the case and to kind of lose sight of that bigger picture and having a set of criteria or questions on hand, they can really help just to work through a decision from different perspectives. And to bring some objectivity back if needs be. I think the other thing about these questions, they won’t all apply, but they will act also as prompts for Board members to think about other questions and to just open up the discussion so that everyone is getting the assurances that they need.
Yeah. I see how that works. And some of these unexpected situations could be quite emotive for some people. They could touch the nerves of certain sort of specialist people on the Board and not so much other people. So this is a kind of standard way, isn’t it? To just rigorously unpack a new and unexpected situation and make sure that it’s being well considered and the right decision’s being made in the right way.
Yeah. And I think you’ve put your finger on it in the sense that, you know, we’re all people, we all have experiences. It’s very hard not to bring your subjective experience into things. And decision-making can become very difficult then if everybody is just thinking about it from their own experiences and their own perspectives. So, it just, and particularly if you’ve got a split view in a Board, or even if you’ve got a fully consensus view, just laying out those questions, thinking those through, I think that really can improve the quality of decision making and make everybody feel that they they’ve had their voices heard.
So we’re coming up to the last episode in our series of 10, what are we going to be looking at for the final episode in this series of the podcast?
Yeah. So for our last of 10 … we’ve looked at several dimensions of corporate governance that are connected with the Code of Practice and with the Charities Governance Code. And we’ve tried, I think during these podcasts to sort of promote the idea of seeing connections between these different dimensions of corporate governance. I think it might be just useful to take the opportunity to focus on those connections and to draw them out a bit further. And I think if we could maybe do that, we might be able to help the Secretary to the Board better explain to the Board and contextualise for the Board, why these types of governance codes matter and how they can kind of actively help them fulfill these important governance roles that they have.
Great. Well, that sounds like a great way to wrap up the series and I look forward to it.
Great. Thank you very much, Will.
You can find out more access resources, templates and the full one question guides. It’s O’Brien GD dot I E. Thanks for listen. Bye.