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Leadership and Governance Ralph Michell, Head of Policy, ACEVO

Leadership and Governance Ralph Michell, Head of Policy, ACEVO. ACEVO. Who are we? What keeps our members awake at night? Why?. CEO is at a pivotal point in the organisation Board act collectively as the CEO’s line manager, but in reality often delegated to the chair

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Leadership and Governance Ralph Michell, Head of Policy, ACEVO

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  1. Leadership and Governance Ralph Michell, Head of Policy, ACEVO

  2. ACEVO Who are we? What keeps our members awake at night? Why?

  3. CEO is at a pivotal point in the organisation Board act collectively as the CEO’s line manager, but in reality often delegated to the chair Focus for information flow to and from the board CEO has a crucial role in governance whether or not they are on the board Boards and CEOs

  4. Governance vs Management Governance vs Management

  5. Governance vs Management • Management is defined in opposition to governance, the day to day activity involved in implementing the higher-level, longer-term decisions of the board • Governance is also a more reflective and intellectual activity than management, requiring a more far-sighted and less hands-on approach

  6. Bob Garratt “The problem is that virtually all the boards I have seen… do not see directing as a ‘proper job’. It is often seen as an add-on luxury to be fitted in after the real work of managing is done, or as the reward for a long and successful executive career. The idea that this is a new and different career step for which they need to retain rarely occurs to them.”

  7. Reserved powersof the board Example from a medium sized charity with an experienced staff team. The board's key functions, which cannot be delegated, are as follows: • Developing strategy • Agreeing the organisation’s vision, values and strategic plan, • Approving, through the budget, the allocation of resources to achieve the objectives set out in the strategic plan, • Agreeing or ratifying all policies and decisions on matters that might create significant risk to the organisation, financial or otherwise. • Monitoring implementation • Setting and maintaining a framework of delegation, performance monitoring and internal controls, • Approving the appointment, employment and remuneration of the organisation’s chief executive. • Compliance • Ensuring compliance with the organisation’s objects, purposes and values, in accordance with its governing document, • Ensuring that the organisation complies with all relevant laws and regulatory requirements.

  8. Chair and CEO relationship Chair – CEO relationship

  9. Chair and CEO relationship • A microcosm for the governance of the whole organisation • “It’s crucial to invest time, thought and energy in the relationship between chair and CEO. It needs hard, honest work – this can be difficult but it is absolutely necessary.” • Debby Ounsted, Chair of the Joseph Rowntree Foundation • Good recruitment and induction is critical for both chair and CEO

  10. Chair and CEO relationship • Cadbury specifies two fundamental conditions for an effective chair/CEO relationship: • First, “that the chairman and the chief executive see their jobs as complementary and not as competing… they have to ensure that their responsibilities match to make up a coherent whole”. • Second, “that the two individuals have to trust one another”. • There is not a clear definition of what is the role of the chair and the role of the CEO, they need to each define this for themselves

  11. Chair and CEO relationship • The following priority areas should be addressed by every chair and CEO in building an effective working relationship: • Mission: chair and CEO need to develop and communicate a shared understanding of the organisation’s purpose and strategic priorities, • Roles: these should be defined and respected, with the emphasis on preventing gaps, overlaps, and any territorial disputes, • Results: the relationship should have a positive impact on the organisation, rather than being (merely) positive and enjoyable for the individuals, • Mature communication: dispassionate and high quality communication are essential. Emotions should be kept firmly in check: passionately expressed views can be damaging in some contexts, • Public unity: chair and CEO should aim to present a solid and united public front on issues of fundamental importance, • Mutual support: the chair and CEO should ensure each other is aware of any important and relevant information, and be willing to act as confidential “sounding boards”.

  12. Chair and CEO relationship • “It is precisely because there is so much common ground between the two posts that the mapping of their respective territories should be the starting point.” • Cadbury • “There is a great delicacy in defining the roles of chair and CEO within third sector organisations. It doesn’t really matter who is performing the role of leader in most contexts. What’s important is that you know who is.” • Baroness Jill Pitkeathley, a founding member of ACEVO • “New chairs often inherit their CEOs, who may only have been recruited just before the new chair. They may well be able to work together effectively, but organisations should be wary about such timing. Ideally the new chair should have a role in appointing a new CEO.” • Catherine McLoughlin, Chair of Age Concern

  13. If it goes wrong… If it goes wrong…

  14. Common governanceproblems • Poor chair-CEO relationship • Boards getting too involved in management • Trustees fulfilling representational rather than governance roles • Board’s don’t have the right information to make the decisions they need to make • Poor induction, training and appraisal • Lack of shared vision for the whole board • Founder syndrome • Poor chairing • Board members are intimidated by experts • Poor diversity of skills

  15. Trustees matter • So be prepared to be inducted, trained, appraised, invest time • But it’s about people getting on, not rocket science • There’s lots of support available (charity commission, trustee network, ACEVO, NCVO) • And it’s fun, good for you and good for the world.

  16. Q&A

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