Generative Governing Increases Board Effectiveness

There is urgent interest in the problems of boards, and a growing demand for more accountability. Boards do not think about or debate governing; they just do it. Many boards look for more effective governance in the form of new board structures. Generative governing provides a different approach. Most relevant, it offers a new governing mode and mindsets, with their related practices, to old challenges.

It’s in deciding what the real problem is that leaders exercise their most significant power. Leaders influence their organizations by:

• framing the problem
• determining what the organization should pay attention to
• providing ways of looking at it

While formal organizational processes like mission setting, strategic planning, or program development are sources of power, effective leaders understand that framing the issues drives these processes. This aspect of leadership is generative thinking.

Generative governing

• Generative thinking raises profound questions about governance:
• If governance is about setting organizational purposes and monitoring progress toward those purposes, then don’t boards need to be engaged in this work?
• Can boards be governing if they do not take part in generative thinking processes?

In 2004, Richard Chait of Harvard University and BoardSource advanced the concept that there are three modes of governance. We set out the board’s purpose, role, responsibility and core work of these modes of governance on our website. Boards govern more effectively when they take a leadership approach to their work.

1. The fiduciary mode — the stewardship of tangible assets. This mode is the bedrock of governance. Fiduciary work makes sure that organizations are faithful to its mission, accountable for performance, and compliant with relevant laws and regulations. Without fiduciary mode, governance has no legitimacy. If a board fails as fiduciary, the organization — not to mention its shareholders, stakeholder (i.e. donors, clients, employees, or community) — could be harmed. This is the central focus of most board work.
2. The strategic mode — develop the strategy with management to set the organization's priorities and course and to deploy resources accordingly. Without the strategic style, governance has little power or influence. Some boards are more about staying on course than setting the course.
3. The generative mode — boards and management frame problems and make sense of ambiguous situations. This shapes the organization’s strategies, plans, and decisions. Most organizations lack frameworks and practices for this work and boards become bystanders to it — even though it is central to governance. Governance must focus on optimized alignment of its structures to overall strategies. Few boards are good at being engaged in generative governing.

Today’s complex organizations demand that boards that govern in multiple modes. Consequently, unless boards govern in all three ways, they are not genuinely providing effective oversight.

Good Governance

Good governance means that the board makes sure that all resources increasingly contribute to achieving the organization’s mission and vision. Our governance alignment program provides analytics and methodologies provide boards and management with the tools to rapidly model, assess and optimizes your organization. This requires generative thinking and governing.

• Generative governing requires boards to:
• frame problems and make sense of ambiguous situations
• move from the boardroom to active learning
• recruit and embrace a wider array of diverse board talents
• ditch Robert's Rules of Order for a different type of discourse and adopting a norm that values frank discussion and disagreement in the boardroom
• govern to explore and reinterpret the past
• find new patterns, new ways to frame old problems, and new sources of ideas to set a different course for the future

A board that excels in one mode but flounders in another one will govern far less effective than a board that ably works in all three. When boards overemphasize one mode they exclude others (a common problem), the net results are worse, not better, governance. Most of all a board’s effectiveness increases as the board members become more proficient in more modes and management becomes more proficient in governance alignment.

Our governance alignment program provides ongoing good governance at your organization. You will also find that our post Goal Alignment Program – A Breakthrough in Governance Analytics offers valuable insights.