Hello again, Prof. Vic Murray here, and welcome to Week 2 of the third course in the Coursera specialization, Improving Leadership and Governance in Nonprofit Organizations. This course focuses on factors that impact the ability of the board of directors to carry out its role and responsibilities effectively. Last week, Prof. Harrison covered the important topics of board structure, operating procedures, and meeting leadership. This week, the focus is on one of the most difficult challenges to board performance, creating the ideal mix of board members, and providing them with the training to make them as effective as possible. This lecture is divided into two parts. The first part will address the culture of the board within the following questions. What do we mean by culture, board culture, and why is it important? How do boards develop and pass along culture? What shapes board cultures? Can board cultures be intentionally changed and, if so, how? With regard to leadership, the following questions will be addressed. What is leadership? What is leadership in the context of governing? What do effective nonprofit leaders involved in governance do? Why are some less effective than others? How can leadership be managed for higher performance? What is the cost of not developing leadership? We'll end with questions to inform your peer-to-peer discussions about culture and leadership this week. What is culture and why is it important? Well, culture is a set of shared, taken-for-granted attitudes and assumptions, perceptions, and beliefs about how one should think, feel, and act in a social setting. Those within a culture are often unaware of its influence on them. A culture of a board of directors refers to the informal and largely unconsciously held set of shared attitudes and beliefs about, "How we do things around here." A board culture can be strong or weak, and it can be composed of a large number of elements or just a few. If the informal culture is strong and encompasses a wide range of attitudes and beliefs it can impact almost all aspects of board behavior, from how it views the organization's mission, clients and funders, to how members behave toward one another and go about making joint decisions. Now that we've defined culture, board culture, and talked a little bit about why it's important, and the fact that it's difficult to change; I want to turn your attention to a chapter in the Cornforth and Brown text, Nonprofit Governance, Chapter 6 by Debra Baker Beck, called Learning To be, Learning About. This is a chapter that examines culture, but specific sociocultural learning theory as a framework for understanding how board members learn about, and how they act in governance, and she uses a case study approach to do this. She has two purposes with this chapter: One is to understand board learning within the context of a board meeting and two, to articulate the factors that contribute to an environment where generative governance can take place, and so this is the focus of her chapter. She reviews the literature and provide some very important quotes, I think, that help us better understand the concept of board culture. One of them is a quote by William Brown and his colleagues that talks about the concept of culture within the framework of authentic activity, and it's really the only way that members really gain access to the point that enables them to act meaningfully and purposefully in governance. A quote by Richard Chait talks about board culture as so important that it matters more than structure, and that an environment of trust and respect, open inquiry, candor, and lively discussion, an environment that respects diversity in different points of view and minimizes power difference in social status, that these are all qualities that matter more than structures, like how large the board should be or the number of meetings that it should have or whether certain office, say, should have term limits. Axelrod goes one step further and describes the norms that are important to creating a culture that's conducive to productive and creative or what you're reading about in Governance as Leadership: Generative Governance. She highlights the need for mutual respect, trust, and inclusiveness, the capacity to explore divergent views in a respectful manner, the willingness to gather information, and the presence of feedback mechanisms that can help the board engage in continuous improvement, and then the commitment to decisions, plans and actions, and accountability. The question of how boards develop and pass along culture was addressed in her chapter. Some of the ways that boards do this is through orientation, through organizational stories, through mentoring and role modeling these behaviors, through firsthand experiences with services or work, with opportunities to get to know each other. I've been at a conference all week at the Midwest Center for Nonprofit Leadership; and we've spent a lot of time talking about culture. David Renz gave a presentation the other day on strategies for strengthening your board and growing a culture of effectiveness. He says that boards really need to talk about what drives or shapes their board's culture. What a culture is the board trying to cultivate? What type of culture does it have? Is it intentional in developing this culture or not? So what shapes board cultures? In Deborah Bach's chapter, she talks about some of the factors that shape learning in a culture where generative governance can take place within the context of meanings and talks about a number of factors: One of them being the importance of questions, of board members asking questions and that leading to greater clarity of roles and responsibilities. But this question looks at other key influences. What shapes board cultures? The first here is the influence of founders and long time serving board members. They're a key influence on the culture developed in the board and how board work should be done. The next is influence of powerful external stakeholder groups with expectations that the board hold certain values or engage in certain practices. We see this coming from clients, members, funders, regulators, and so on, that in these expectations help to shape board cultures. Another is the influence of core groups within the board. These could be referred to as cliques, it's formed around shared interests among a small group of board members, it could also be that you have a very large board. Again, I said I was at a conference and I met a staff member in an organization who has a board of 120, and of course, the core group is down to the Executive Committee of about 40 of those members. So a core group can grow this way, or it could be a clique that forms around shared interests among a small group of board members who then unofficially pressure others to conform to their views of the way of the world or the way of the governance world. Then finally, the influence of those in key leadership roles, so the influence of the Chief Executive Officer and the Board Chair, they also help to shape board cultures that develop. Can board cultures be intentionally changed and, if so, how? Well, our research on the effects of online board performance assessment suggests that yes, that culture can be changed and we see evidence of the changes that boards are making after assessing performance and culture through our impact assessments. But not all boards are changing. In fact, we also ask a question about changes that the participants wanted to see in their board that the board didn't make. One of them that comes up most frequently is in the area of board culture and wanting to see more collegiality within the board. The board working and acting more as a team. The answer to this question is maybe, and that the first step in really changing a culture is to recognize that it exists and identify its elements, but to have a tool or some kind of diagnostic to do that. The board checkup is one of those tools and in fact, it's one of the best practices that has been empirically linked to improvements in board effectiveness. Our research and that of others suggests this might be a good place to start. But I will say that we have had reports and people assessing performance and taking on some of these issues, that it might be more than some people bargain for. We have also seen that at this time, that some people voluntarily decide to leave the board. This isn't what they signed up for and so they learn through this process that what the role and expectations are in governance, and then they make a decision whether they want to continue to participate in that or leave. But it's important in surfacing a board performance, challenges and elements of culture, issues that challenge culture in particular, that in surfacing those elements, that it be safe and that the process be anonymous. With the checkup we've created that it's not even possible for Vick and I, to know who completed surveys. We don't collect IP addresses. Any individual takes a checkup, their responses are anonymous and we believe that this explains why we found when we've observed boards and gone in and independently assess boards that the perceptions and the issues that are reported through the checkup match up with our observations, that people really are being truthful and honest in their perceptions. It's also part of the design of the instrument as a behavioral diagnostic, which really requires a low level of judgment in identifying whether these issues exist, is there a core group among in your board that seems to be making all the decisions, and some of the other issues that you'll notice in the chapter on board culture. I think I would like to point your attention to board sources report and it's on the course wiki Leading With Intent. Their 2015 report on their National Index of Non-profit Board Practices. A summary, one of the key findings of this assessment is that high-performing boards really do pay attention to culture and board dynamics. This is a quote from their report, "The real secret to board success. Leadership culture is difficult to measure. A productive leadership culture requires having the right people on the board, achieving clarity around roles and responsibilities and educating and engaging board members. Strengthening the culture requires leading with intent, thoughtful planning, determined dedication and collective commitment from executive board chairs and board members to this." As I mentioned, there are tools available like the board checkup, confidential self-assessment, a free self-assessment that boards can use to do it, but they can also use outside consultants. They can work with professional consultants, they can also work with universities, we offer at the University at Albany and I know in other universities, service learning experiences, University of Oregon, Kent University of Missouri, Kansas City, where students can be matched up with boards to provide an independent view on board effectiveness and to help boards really be intentional about their development efforts. There are many ways that tools and practices to help boards become intentional. If so, more likely to change the culture of their board. Most literature on the leadership function of nonprofit organization boards concentrates on the role of the board as a whole. This emphasis is because legally speaking, the board is the final authority for the organization, even though it may delegate some of its authority to a Chief Executive Officer. Similarly, it recognizes that no one board member may legally act as a representative of the entire board on a given matter unless been given the authority to do so by the board. I always have an example of a board chair who met with me to talk about the fact that she hired the CEO and she did it in isolation, once after the board had done a self-assessment, she had come to me to talk about concerns that she had acted outside of her authority. Many boards really lack understanding of the formal authority of the board and the informal of individual leaders within it. These are people like the board chair who have significant influence over how the board works, and so play key roles in identifying or selecting a Chief Executive Officer, but don't really have the authority to make the decision of who to hire and so on. I reviewed the larger leadership literature several years ago and found a very useful definition of leadership in the context of governance and boards and groups by Stogdill. His definition is, "That leadership, in an organizational context, consists of more than one person and it is the process of influencing the activities of an organized group and its efforts toward setting and achieving goals, and for leadership to exist, there must be a group with a common task or objective, and at least one member must have responsibilities that are different from the other members." If all members have the same role, there is no leadership, according to Stogdill. Some of the key organizational variables in leadership are responsibility, what members are expected to do, work performance, what members actually do, and the methods they use to do it, formal interaction, who members are accountable to and the people they need to cooperate and interact with within the organization, and informal interaction. This is where we can get into culture; the way things are done, the people they actually work with and cooperate with in the performance of their tasks. So leadership can be viewed from these perspectives. What do effective leaders involved in governance do? Well, this question really gets at leadership competencies. What are the competencies of highly effective leaders who are involved in governance? So I'll spend the next few slides talking about the competencies, drawing from the empirical research to suggest what effective nonprofit leaders involved in governance do. First is effective chief executives, and drawing here from the work of Herman and Heimovics seminal work in the field, and this is from The Block School in University of Missouri - Kansas City. They found that board centered chief executives tend to have effective boards and that the competencies of these executives are that they facilitate interaction in board relationships, they show consideration and respect toward board members, they envision change and innovation for the organization with the board, they provide useful and helpful information for the board, and they promote board accomplishments and productivity. Drawing from the research that Vic Murray and I have conducted on board chairs, effective board chairs assist the board in identifying and developing strategic goals. They see the big picture and they lead the board in this process; they create a safe climate where issues can be discussed and they look for and acknowledge the contributions others make to the board and organization. They also confront and resolve inadequate performance on the board, and they do so in a respectful way; they're open to new ideas and information, they're fair and impartial, and they seem to know how to provide the right autonomy and independence for the board and the CEO to perform their work, and they make people feel like a valuable member of the team. Some of the specific traits of effective board chairs are this commitment to the organization and not distracting it or the board from its goals. They're devoted in terms of time, clear about their role, they're capable of seeing the big picture, and clarifying issues, and handling them in a collaborative way. In a way going back to the slide on [inaudible] on these interactions, we see board chairs playing interventionist, interplay, and influential roles. But going one step further, what are the competencies of effective board members or leadership volunteers? Bob Herman has done some work. There's a publication called Emerging Areas of Volunteering by ARNOVA, and he's produced a chapter on board members as volunteers. I encourage you and we'll put a link up to that on the course Wiki page. But there's been some empirical research on effective leadership volunteers by the National Learning Initiative out of Canada. Some of the competencies they identify are that effective leadership volunteers be motivated to serve, that they be recruited for the right reasons, and empowered for the service of the mission and for others. That they help create and share in a vision, and align strategically with it, that they are informed, that they consider best practices, and contribute to this vision through their work. Another is developing effective relationships, and that they nurture a healthy organization and work environment, that they're socially aware and maintain effective relationships. Then create value, that they're open to innovation, and creativity, and change. That they're able to translate theories and plans into action, and are responsible and accountable for it. Why are some leaders less effective in their leadership roles than others? There are several reasons, explanations for this, and one of them is that they may lack leadership experience in the non-profit governance contexts. They may be effective in their day jobs, but lack experience of leading in governance and at the board or group level. They may really just lack some of these competencies for the leadership role, or they have the right competencies, but maybe they're exerting too little or too much influence in the role. So could be that they just lack information and support, and knowing how much influence to exert. They might not know that they are ineffective. In our study of board chairs, our research reports perceptions of chairs from the perspective of the key actors that interact with chairs. But when we looked at the data from chairs themselves perceptions, we found it was difficult to determine who was effective and who wasn't because all of the chairs have responded to our research perceived themselves as effective in the role. We knew from the people they interacted with that wasn't necessarily true. It just could be that they lack information and feedback that's necessary to fully develop in the role. How can non-profit leadership be managed for higher performance? Well, as we alluded to in the last slide, one explanation for less effective leadership is that leaders simply don't have the information, they simply don't know that they're ineffective, and so the recommendation here is to implement a system of performance feedback for non-profit leaders. But to keep in mind that performance assessment in the context of leadership at the governance level is complex. It's complex at any level. You have as we've discussed a diversity of leaders, leadership roles, and different types of interactions in governance that requires leaders to do different things at different times for different situations. Different leaders contribute effectiveness in different dimensions of the organization, and no one leader or actor contributes all that is required for effective non-profit governance. That you really have a collaborative governance situation with people doing different things. But going back to the definition by Stogdill, each has a different role and doing different things to advance the organization and the board towards its goals. Performance assessment in this context would require some method criteria for evaluating leadership effectiveness, collecting data and analyzing it, and generating some information that feeds back to leaders. But also then, in terms of performative assessments, but also then could be aggregated to determine the impact of leadership and give recognized people for the value of their contributions. What about criteria? You've decided you're sold on this process of assessing performance, you don't feel it's fair that your leaders haven't had that feedback, you want to develop this, you think it's going to return value. Well, what could you do? What tools are available? How can you think about this? How can you talk about this? How can you make decisions about it? Even use it to understand leadership effectiveness challenges, intentions between people on how we really should lead this organization, and how leadership really should be around here. What you see is the competing values approach to leadership effectiveness. This is taken from Quinn, Faerman and others, their colleagues. It's from the Becoming a Master Manager, and it's a competing values approach. I will put a link up on the Wiki. But essentially you have different leadership competencies and effectiveness criteria in different dimensions, different schools of organizational thought, and leaders play different roles. You can observe these behaviors, you can codify them, you can assess them, and they have a tool to do that. But one thing to point out is that oftentimes you'll see tensions within these different perspectives. You'll see, particularly in non-profits between the open systems internal process whose mate see smaller grassroots, organizations really tending toward the open system model and towards leadership effectiveness, this competency to be adaptive, to be responsive to needs. On the opposite, the tension is around control, and hierarchy, and having to establish internal procedures and processes structures, some more things to control the organization and some tension there and perhaps resistance. This competing values framework can be useful in surfacing and talking about some of the tensions. Well, if we implement these structures, will it change how responsive we are to our members, or to the public, or to the people who we serve. This really is a useful tool in a number of ways and really reducing some of the tensions in around leadership and that there really is no one best way to lead. What this diagram shows, are these different competencies in these different schools of thought. Again, drawing from Quinn and his colleagues of the Master Manager and really to show that there are a set of effective behaviors, and there are a set of ineffective or less effective behaviors, and they tend to be polar opposites. This is consistent with our research on board chairs, but it's also consistent with leadership at the governance level and study by Loblaw and Gillies. Really, either not exerting enough or exerting too much influence in the role in any one different situation. You can see examples of too much, and you can see where there's just simply not enough. This is useful to know that it may be that we need this, we certainly need this behavior, but the performance assessment could be used to give the leader information to either step it up, do more, or to information that they're doing too much. Maybe this approach to leadership, assessment and development may be useful in preventing us from swinging from one ineffective leader to another. Maybe we could develop leaders in that they're on the right track, but they just need the information to get there. How do you get there? I also think The Master Manager by Quinn and his colleagues is very useful, it contains all development strategies in each of these dimensions, that I have used and we have tested in boards and could be very useful. Some of them are in our guidebook, but many are in the Master Manager. There's some here on this slide, and I've adapted this from John Rohrbaugh, colleague I work with, and his work on groups. You can see some of the best practices in each of these dimensions, and to build collaborative competency. Orientation, skill building, team-building, conflict management, performance feedback. Create competencies to help the organization adapt and change to do stakeholder analysis, to work on forming alliances and collaborations and how to do that, discussions, development around creativity and brainstorming idea generation, how to negotiate and bargain, how to think and be more politically astute externally. Then finally on the bottom to control, developing information resources, looking at structures and records, and making sure you're compliant with the law. But that you also have procedures that are essentially your operations manual for the board that help the board reach leadership competency and help members fulfill their roles and do their duties of due diligence care. Part of that is through performance assessment function, gathering that information. Then finally on the compete side, and I think a lot of the work already has been done, but around vision, mission and strategy planning, and paying attention to the advice of Chait, Ryan, and Taylor on not just creating a plan or rubber stamping a plan, but also in generating and asking questions, and working collaboratively with the CEO in the development of that. What is the cost of not developing leadership? I just came out of a small group session that I facilitated at the Governance Conference at the Midwest Center for Nonprofit Leadership, and many of the things that are on this slide we talked about. An informal group that has evolved that runs things, a passive or overly aggressive chair, or a CEO that dominates the board or withholds information from the board, all of these and many others can negatively affect governance behavior in a number of ways. One boards lack the information to meet their due diligence function and carry out due diligence assessments of performance. Board meetings that are poorly facilitated or poorly attended affect board discussion and decision-making. The board could end up in a leadership as governance situation where the CEO is really managing and governing the organization and the board really isn't governing at all. Leadership ineffectiveness can be very costly for the board and organization that fails to address it. There is no financial indicator on the cost of leadership or board ineffectiveness in the nonprofit sector, but in the corporate sector there's been an estimate by Donaldson who said that leadership ineffectiveness at the governance level, of corporate boards, amounts to a seven trillion dollar loss in the aggregate value of American corporations. It may not be as high in terms of money, but certainly significant for the organizations that fail to address it. Here we are at the end of the last week of the course, the last lecture, and our last peer to peer discussion. Here are three questions to discuss this week: In our guidebook, we discussed a number of reasons that might explain perceptions of leader ineffectiveness in the eyes of those who interact with leaders. Have you come across situations where you perceived a leader as more or less effective? Can you describe the situation and what the person did to leave you with this impression. Two, in your eyes, what do effective board chairs do? When do they become ineffective? Finally, what can boards do to develop leadership at the governance level? Or, does it even matter? Here are few questions to talk about this week.
