Blog : Insight

Board members, it’s time to let go

Board members, it’s time to let go

BOB

If we want approaches to governance that help us act boldly with a focus on mission and impact, we need to look beyond the board much more systematically and radically. That means we don’t just need diverse boards, we need permeable governance.

Look into almost any governance guide for charities or social enterprises and they will be all about the role of the board. I don’t deny the importance of a well-functioning board but I do think such a narrow lens is a big problem. If we want organisations to focus on their mission and be attuned to the needs and realities of those they exist to support, we need approaches to governance that are ‘permeable’ – that go beyond traditional organisational walls to recognise, value and balance the inputs of everyone not just those ‘inside’ the organisation but those ‘outside’ too.

The Charity Governance Code for example, has been helpful in focusing not only on traditional governance topics of risk management and compliance, but by giving greater emphasis to areas like purpose, diversity, openness and organisational culture. Yet every section of the guide starts with what the board needs to be leading. I ask myself: how can a group of volunteers, very often distant from the day to day, lacking in diversity and with extremely limited amounts of time, ever hope to lead effectively on all these areas?

“The board thinks it’s leading on strategy, but in reality we’re leading the process and the options they choose from, so it’s little more than a formality with some tweaking around the edges,” said one large charity CEO I spoke to recently.

My experience is that most boards get fed a story the management want them to hear. This isn’t some conspiracy, it’s just that senior management teams are so much closer to day to day. Boards have a role to play in strategy e.g. by providing outside perspective, but to pretend they might be in the best position to direct that strategy is often fallacy. Indeed, the board members are rarely best placed to scrutinise management either – partners, funders, beneficiaries, service users and the general public are usually closer. We just don’t often put much energy into listening to those views – or ensuring what they say ‘bites’ (or to put it another way, these voices are all too easily ignored).

“There’s a mistaken view within civil society that governance is about the board. It’s too often seen as a place, rather than a process – governance involves everyone within and around the organisation,” says Julia Unwin CBE, former CEO of the Joseph Rowntree Foundation and chair of the independent inquiry into the Future of Civil Society.

If we want approaches to governance that help us act boldly with a focus on mission and impact, rather than act conservatively with a focus on self-preservation, we need to look beyond the board much more systematically and radically.

For example, in 2011 Mayday Trust carried out an inquiry with over 100 individuals into the support received by people experiencing homelessness, entitled ‘Wisdom from the street’.  Reflecting on challenging findings, further academic research was commissioned before they embarked on an 18-month period of co-production with people working and living with MayDay.  What emerged was an entirely new approach to the support they provide, known as a “Personal Transition Service” centred on building an individual’s assets as a means for them to take control of their own lives. To implement this strategy effectively has required fundamental changes to the structures and systems within the organisation – for example, HR had to adapt new ways of recruiting and training staff; finance needed to develop the right systems to cope with costing individual interventions; data capture systems had to change to reflect the methodology behind asset based data capture.

“When we found a way to really listen to and directly involve the collective voices of people going through tough times, it transformed governance, it transformed how we set our strategic goals and direction at Mayday,” says Pat McArdle, CEO. “Our ‘Wisdom from the street’ methodology gave us clear insight into the priorities and the questions that we should be asking at a governance level.”

This process of deep listening and response started with the board recognising its limitations, letting go of primary control and understanding that genuine stretch was more likely to come from a process led from outside the organisation than within it.

We can also learn from a growing number of organisations grappling with their role in contributing to impact across interconnected systems. “Research has shown increasingly that discrete, short-term, sport and physical activity programmes don’t deliver long-term benefit,”says Deborah Potts, CEO of Active Gloucestershire“so over the next few years, Active Gloucestershire will be supporting the most inactive people and communities to identify the changes they want to see. Instead of doing ‘for’ people, we’re going to start doing ‘with’.  That means we stop leading from the front and start supporting an emerging movement of people and organisations from behind. That movement is called Gloucestershire Moves.” 

This approach has had some significant consequences for the shape of Active Gloucestershire – they are now testing a ‘virtual’ governance structure for Gloucestershire Moves led by a steering group of representatives from across the movement to which the board has formally delegated strategic decision-making.

“If we’re genuinely changing our relationship with people, we need to be willing to share any power we have and to let go of the ‘command and control’ model so comfortable for ourselves, our trustees and our funders,” says Deborah.

“I have been impressed by the way that staff and board members have stepped up and been willing to embrace the change. In many ways, we’re taking a risk. We’re reinventing Active Gloucestershire entirely.”

These examples demonstrate something well beyond a senior management team collating views from surveys or advisory boards, digesting them, presenting them and framing them for the board to then sign off. They show a genuine distribution of power as a result of a deeper focus on who and how diverse stakeholders are engaged in or leading governance processes. They suggest, for example that an assertion that ‘we need a more diverse board’ is not enough; instead it should be replaced with ‘we need much more diverse voices at all levels inside and outside our organisation’.

Julia Unwin again: “Good governance provides clarity about the connection between different moving parts. It provides guidance about how they interact. It specifies where power is, and who is accountable and for what. It builds deep connection by investing in trust at all levels. It’s always in need of attention. It’s never a destination. But it is how the very different stakeholders in any organisation are able to contribute best. And how their inevitably different priorities can be reconciled.”

This is what I mean when I refer to ‘permeable governance’.

For me this places more realistic expectations on boards, creates a more effective challenge to the senior management team, and most importantly leads to a greater focus on mission and impact.

And exploring this needn’t be a daunting task. I’ve worked with many organisations that have found all you need to start is to ask yourselves:

  • What are our key governance functions and roles?
  • Who carries out what roles across those functions at the moment?
  • Are those roles well distributed, complementary and sitting with the right people?
  • Do the structures and processes we have in place support, enable and empower those roles to be carried out effectively?

Answering those questions with real honesty – and regularly returning to them – helps map where power currently sits, opens up a debate on where it might better be placed, and leads to discussions on how to get there step by step. It could just be the beginning of a powerful shift in the way you (and your board) start thinking about what good governance looks like.

Bob Thust is co-founder of Practical Governance, trustee of Local Trust and treasurer at the Bevy community-led pub in East Brighton.

This column is part of a series published by Pioneers Post.

Looking back, looking forwards

Looking back, looking forwards

BOB

For those of us that believe in the case of placing more power in the hands of local communities, these are increasingly worrying times. In the face of massive political uncertainty, rising inequality, and a shrinking and centralising state, it is easy to feel our efforts will never be enough.

In the communities I’ve been working in over the past year it feels like it’s never been harder to do things in a community-led or participatory way. Even when communities show leadership, the past 12 months has shown that our legal frameworks, funding, and support are not enough to prevent the loss of high-profile community assets, such as the Ancoats Dispensary in Manchester that has been set aside for redevelopment despite years of activism and hard-won local ownership, or Hastings Pier in Sussex falling into private hands only months after winning a RIBA award for its community-led restoration and transformation. We have also continued to see a fall in the social infrastructure that creates community and connection, with Locality’s Save our Spaces campaign showing that an average of 4,000 publicly owned buildings and spaces in England are being sold off each year. Meanwhile, the Joseph Rowntree Foundation’s UK Poverty 2018 report, published in November, showed that four million workers are living in poverty – a rise of more than half a million over five years.

It’s hard to take responsibility for your community and feel in control of very much at all when you don’t have the places to meet or even the basic means to live.

So far, so depressing. Perhaps all this talk of community leadership and changes in the power dynamic is hot air. I fear it will be if we continue to assume that simply designing structures or processes for participation and involvement will result in local communities stepping up in numbers to change the balance of it all. The bottom line is that too often the outcomes of our work – endless consultations, surveys, community panels – amount to little more than finding ways to legitimise institutional structures that are at the root of the problems we are trying to address. Instead, we need to grasp opportunities to help define the terms of a renegotiation between the state, business, and local communities. I believe we still have a chance and, indeed, now at our lowest ebb might just be our best ever chance.

Community leadership is, though, part of the mainstream political debate again. Central Government’s Civil Society Strategy in August 2018 set aims to give people a sense of control over the their future and community; to create places where local communities are empowered and take responsibility for where they live. Shadow Chancellor John McDonnell’s recent collection of essays, Economics for the Many, says that, ‘we are seeking nothing less than to build a society that is radically fairer, more democratic, and more sustainable.’

The two-year Inquiry into Civil Society launched its findings in November 2018 and focused on four key themes in a pact: Power, Accountability, Collaboration, and Trust. Meanwhile, across social media and conference agendas in all sectors, from government to civil society, from academia to business, we can’t fail to notice the ever-rising rhetoric on movement building, distributed leadership, systems change, and inclusive growth. All of this can easily be dismissed as noise, but there do appear to be some small but tangible shifts.

People power and place-based funding have been growing as themes for the UK’s leading funders for many years.

What feels like it might be different over the past year is a realisation that if they really want to see more local power and control then they will need to change their own funding practices, too.

Take a look at the Big Lottery Fund. They’ve reconfigured how they work to have locally based funding officers out in the field. For some new funds they have abandoned formal application forms and replaced them with a conversational approach.

Alongside these changes, two of the Big Lottery Fund’s independent ‘spend down’ endowments, Power to Change and Local Trust, are maturing and turning their attention to legacy. Power to Change, a foundation I was part of building in its early days, is now exploring the future of itself and the community business movement, and is investing in major areas of economic challenge, such as housing, energy, and social care. Central Government is also starting to follow through its Community Housing Fund, investing £163m in community-led housing in England over the next two years. At Local Trust, where I am a relatively recent trustee, the Big Local programme – a radical investment that puts 150 communities across the UK in charge of at least £1m – is seeing these resident-led areas increase their confidence in placing bigger bets in similar fields, and starting to reframe the nature of their relationship and partnership with local councils in the process.

Maybe slowly but surely we are seeing the beginning of the end of funders asking organisations to come to them and then prove how they involve and are accountable to their local community, and instead coming to us and recognising the need for core funding to support community-led organisations to do this work on their terms.

Some of the hurdles we have to jump in the name of good governance actually lead you away from genuine community accountability. Where a conflict of interest can be removed by replacing community leaders with a board of distant and independent professionals, or where thousands of conversations with local people are not rewarded or supported because you aren’t the appropriate legal structure”, says Jess Steele, awarded an OBE for services to community assets in the UK, including her part in bringing Hastings Pier into community ownership in the first place.

We can hope, too, for more nuanced and collaborative approaches to investing in place, rather than dogged adherence to each funder’s own unique flavour of what community leadership ought to look like.

“Increasingly”, says Matt Leach, CEO of Local Trust, “there is recognition that legitimacy may come simply from being a long-term resident of a place, and accountability simply from the possibility of being questioned or challenged by your neighbour.”

Local authorities seem in much greater numbers to acknowledge the need to commission in ways that are not based on paternalistic, pure outcomes-based contracts, but rather based on enabling local partnerships to be responsive to need. Calderdale Council’s Vision 2024, a strategy being built over many years of conversations with local residents and a focus on empowering communities, is one example. Another is Gloucester County Council, which is increasingly embracing the principles of Asset Based Community Development across all of its work. This might simply be the result of desperation as funding continues to be cut and we see local councils like Northamptonshire and East Sussex bankrupt or close to it, but desperation can also be a powerful force for fundamental change.

Perhaps now is the time for approaches such as participatory budgeting – where local people propose ideas and vote on spending – to gain the traction we’ve seen in many international cities, and closer to home in Scotland. We might also go one step further and commit to finding ways to hand over significant resources directly to local people and trust them to spend it, building on the evidence emerging from investments like Big Local. Indeed, if these principles can influence the design of the government’s proposed Shared Prosperity Fund, intended to redistribute investment across the country more evenly after the loss of the European Structural and Investment Funds, then there are seeds of hope.

Though not often spoken of in these terms, there are also clear links between the workplace and community leadership. The Employee Ownership Association’s 2018 Top 50 Report shows that the employee-owned sector continues to grow by more than 10% a year, and in challenging economic times has showed a 7.3% increase in productivity year-on-year (compared to the 0.1% drop in UK productivity). With these results, and with high-profile converts to employee ownership in 2018, such as Riverford and Aardman Animations, will we see the benefits of employee ownership more widely adopted?

“The opportunity to, in effect, socialise private business through the extension of employee ownership is a really interesting path and one not yet trodden often enough in England”, says Ged Devlin from the Power to Change Trust, “and there are some trends to see community as the route to succession ownership. Whether this is long established organisations like Fairfield Mill looking to their community to invest and put them on a steadier footing, or George Street Community Books looking at how the community can help keep independent shops alive and serving their community.”

The desire to engage doesn’t appear to be waning either. “The appetite in communities for being more directly involved in decisions which affect them at work, in rescuing a community asset, or recognising something that previously might have been considered someone else’s problem is growing”, says Co-operative UK’s Linda Barlow, “people just don’t seem to want to be passive donors, workers, or recipients anymore.”

You would be forgiven for thinking all of these opportunities are just clutching at straws. If the state continues to centralise and shrink, if poverty continues to rise, what chance do we have?

It may seem, too, that more or less the same article as this one could have been written a year ago, or even five. But something feels different now. I think it’s because the challenges are so great that the need to fundamentally reset the relationship between business, government, and local communities and place them on a more equal footing, transferring not just responsibility but genuine power, is increasingly not a choice but an imperative. This is not just felt by those without much power but also those who currently hold it. Therein lie our opportunities, ones we need to grasp wherever we can. And if the last year has taught us anything, it’s that you can’t reliably predict the future. Who knows how the political and economic landscape might change in our favour over the next few years? So when it does, let’s be ready.

Bob Thust is co-founder of Practical Governance, trustee of Local Trust and treasurer at the Bevy community-led pub in East Brighton.

This column was first published in Stir to Action magazine

What a sofa outside a pub has to teach us about good governance

What a sofa outside a pub has to teach us about good governance

BOB

What can leaders in the social sector learn about governance from the story of sofa outside a local pub in Brighton? 

In the third instalment of his governance column, Bob Thust – a member of the Bevy Management Committee – brings to life some ideas and challenges for us all to consider, whether you’re a big charity or a small community group. 

“What’s that sofa doing out there?” one of our volunteer Management Committee members said to a group of regulars sitting outside the pub.

“The pub manager said it was fine” they replied

“Well I think it looks bloody terrible.”

The sofa did look a bit shabby to be honest, but more importantly we’d been having a lot of conversations about how to make the pub more welcoming to everyone in the community. After all, that’s at the very heart of what the Bevy, a co-operative pub on a council estate in Brighton is all about.

The pub was closed down by the police in 2010 for drugs and previous violence so we have always had to work that much harder on things like this. There was a chance having our regulars on the sofa outside could put some people off coming in.

That little verbal exchange caused a lot of trouble.  Firstly, the manager had told them they could do it. He felt undermined by a Committee member stepping in and the Committee member felt an important issue was being ignored. Secondly, these were regulars –local people who have kept coming to the pub and contribute not only to our bottom line but also helping keep some of the issues that got it closed down away from our doors.

A few weeks before a different issue had come up at the Management Committee. In order to protect the pub as a genuinely welcoming community hub we have had to develop and implement a strict barring policy. The policy was working well but when one of our regulars was barred for 6 months, there were some who didn’t agree that it was the right decision. More than that, they didn’t trust the process by which we’d come to that decision. This made the simple sofa exchange more significant than it might otherwise have been.

We ended up having an open meeting between members of the Management Committee, management and our regulars to thrash it all out.  It wasn’t an easy conversation but it was an important one.

It was clear there was a level of disconnect between the Management Committee, the management and our regulars.  What it really came down to was a question of power.  Who’s pub was this? As a co-operative, the Management Committee are in theory appointed by the membership, those that have bought shares in the pub.  It should exist to represent them and promote their interests– and in turn appoint a staff team to which it delegates the day to day management.  It shouldn’t really have an elevated status– this is the members’ pub not ours.

And of those members, we have 800 shareholders- but are they really the people that have a sense of ownership of the place and to whom we want to be held accountable?

As a committee are we sharing enough of the processes and decisions with our members? And whilst we hold fast to a rule that 70% of the committee are from the local area, is that enough to represent those that use the place as well?

It turns out that only a few of our regulars are actually members of the pub.  People didn’t feel the role of the Committee was to represent the members, and – if we’re honest- nobody really understood what the Committee talked about or what we did (or how much of our time it takes as unpaid volunteers).

rawpixel-760112-unsplash-sofa (Copy)

So we’re in the process of introducing a scheme where volunteers and supporters can become members for free and a process by which they can more easily get onto the Committee. We’ve also created a staff liaison role, and are putting up a ‘Bevy Board’ to share minutes of our meetings. We’re finding ways to ensure various parts of the community can attend as observers and commentators at meetings.

We understand better now the need to let the management make day-to-day decisions, with the Committee holding them to account on behalf of the member, and how vital it is to maintain an open dialogue.

Whilst our regulars are really important to us, we have to include all the other users of the pub too, and even more so those who live in the area but aren’t using it yet. So we’ve decided we need to do more door knocking to really listen to our local community, something we haven’t systemically done for a little while now.

We’ve learnt that of most importance to people is having a palpable sense of power, not just being able to turn up to AGMs and vote people on and off a committee (whose role made no sense to them in the first place) but on more immediate things.

What beers to serve, what events to put on, perhaps hold chats about our policies and work on them together rather than decide them on the Committee. We’re not quite sure the best way to do this yet – it’s fair to say we’re working on it.

I often describe the Bevy Management Committee as the best board I’ve ever been on. We’re not perfect – far from it – and I’m sure many governance experts would choke on their pint if they saw some of the admin processes we have in place. But we take our responsibilities seriously and manage them carefully (the admin is getting a lot better). We are rooted in our local community, we have great talent, honest conversations, there is a lot of trust between us all, and we have a lot of fun.  Over the past few years we’ve been a part of turning a closed down pub with a bad reputation into a thriving community hub – and we’re even making a profit now. But perhaps the most important thing is that we never stand still and are always challenging ourselves to get better. This is what the Bevy has taught me, and if you’ve been reading my previous columns you’ll perhaps recognise some of these themes:

  • The Board or Management Committee shouldn’t see themselves on some kind of pedestal, looking down- they are but one part of the organisation.
  • You need to work hard on developing trust – using honest and transparent communication, but more importantly two-way conversation that builds relationships between people.
  • It’s about power and the need to distribute it more evenly in ways that are accessible and meaningful.  That often starts with some symbolic, immediate and palpable decision-making, however small.
  • The Management Committee only works if it represents the community it serves. We would never have started to notice or understand potential issues without people on the Committee who were close enough to our community raise them.
  • You need to keep revising systems and processes to support your good intentions. Without them they are promises that will drift after the initial surge of enthusiasm.  If we’d just had a few chats about membership but not started changing our formal approach, for example, we might have brushed things away in the short-term but in the long-term trust could quickly evaporate.
  • Relationships and needs change over time and the processes you once relied on might not work in a year.  We can’t afford to think ‘job done’ so we need to stay open to change and build in mechanisms to constantly review how we’re doing.

I do a lot of work with various boards on governance and management – from networks, to small community groups and organisations, to co-operatives, to larger charities and foundations.  Although these issues always play out in different ways (not many of those I’ve worked with have spent much time talking about sofas outside a pub!) they are nearly always there and I’d be hard pushed to think of any case where this learning isn’t applicable to any organisation trying to create social change regardless of its size.

So, take just a moment and think to yourselves – as the leader in the social sector what’s your own version of the sofa outside the pub story? How might that have an impact on effective governance for your organisation? And how might you respond?

And for all those wondering – that sofa stayed outside (for a while) but is now firmly back inside the pub and it’s way too cold to move it.  Next summer? Who knows…

Bob Thust is co-founder of Practical Governance, trustee of Local Trust and treasurer at the Bevy.

This column is part of a series created for Pioneers Post 

The future is here and it is unevenly distributed

The future is here and it is unevenly distributed

“Power, accountability, connection and trust resonate. They are the fundamental building blocks that will allow us to rise to the many challenges we face and we all have a responsibility to act.”

Bob Thust and Esther Foreman respond to the Civil Society futures report: The story of our future – shifting power, bridging divides, transforming society. 

We both welcome the outstanding work of the inquiry over the past year and the Civil Society Futures report. There is not doubt that ‘a strong, renewed, re-energised civil society is urgently needed to shape the future now’.  The principles of the PACT – the four pillars of power, accountability, connection and trust – resonate with us as the fundamental building blocks that will allow us to rise to the many challenges we face. The emphasis too on us all, as people who work in and around civil society, bearing both the responsibility and capability to take positive action to respond is significant.

The danger, however is that we choose to respond in small, incremental ways, or only as individual organisations, or that we fail to recognise the role we have to play in fundamentally engaging and shaping the whole of society, not just that which we call ‘civil’.

In many ways it feels to us that the tide is beginning to turn, with the findings of this inquiry testament to that.  More and more people and organisations across civil society are seriously examining principles in line with those expressed in the PACT, challenging themselves to respond and most importantly putting them into practice.  Supporting many of them over the past few years, we have seen more interest in, for example alternative forms of governance, distributed decision making and campaigning, collaborative networks, systems leadership, movement building techniques, participatory budgeting, community ownership, the recognition of the importance of experts by experience and the proliferation of new tools such as co-budgeting and loomio.

It is this very shift which led us to create Losing Control, an idea which started as an event in 2017 and is now developing into a network, resources and event programme for an initial 2 year period. We are bringing together a people from across sectors to learn from and support each other in finding practical ways to let go of power to unleash social change.  One thing that has always stood out as we’ve developed this work is how many like-minded and committed people there are across sector and country boundaries – and how powerful it can be when they come together, find common ground and start plotting…

As important as our individual actions are, we need to recognise that for those actions to have truly meaningful impact the PACT can’t just be about how we in ‘civil society’ respond, but how we collectively act as a convening and converging force to engage the whole of society in this challenge – business, tech, government and the public. All have a role to play; the responsibility for the future cannot be unevenly distributed.

We also know from experience that incorporating new principles into leadership, governance, engagement and accountability is an uphill struggle and can carry a heavy resource tag.  It takes time and energy to make this happen; doubly so when challenging the very structures that make it hard in the first place. We also need to commit to practical investment in supporting collaboration across those sectors that are focused on reshaping the way our economy and democracy works, for example through promoting community and employee ownership within mainstream business.   So, if the decision makers and influencers across civil society are standing by these principles, we need to see the resources and investment that will help us to strengthen that work on the ground, looking outwards as well as inwards.

This inquiry has  made stronger and more apparent the need to focus on these critical topics and set down some clear challenges.  Let’s take that momentum and not just take action as civil society but as ALL society because it’s in ALL our interests.  Losing control is just one effort to try to support that – we will need to work together to support and build many more.

 

This post was originally published on the Civil Society Futures website as a response to the independent enquiry results.

Bob Thust is co-founder of Practical Governance, trustee of Local Trust and treasurer at the Bevy community-led pub in East Brighton

Esther Foreman is CEO of the Social Change Agency

They say culture and relationships eat strategy and process for breakfast

They say culture and relationships eat strategy and process for breakfast

BOB

But why can’t they all sit down over dinner and work it out?

Why do we in the social sector continue to pit culture and relationships against strategy and process, as if the two aren’t two sides of the same coin? Bob Thust asks us not just to understand the relationship between them, but to actually apply that in practice too.

We live in an increasingly systemised world driven by technology and ever larger organisations looking for efficiency. For all the cost cutting and risk management, as a result we are losing sight of the power of human relationships and organisational culture. Whilst I’m delighted more attention is being paid to these themes recently, I’m also worried with a tendency to pit the transactional and the relational, the cultural and the strategic, against each other as if these are opposing forces that somehow need balancing. What we need to do is stop and examine how both these approaches well, relate to each other.

It’s a familiar story. Organisations grow without focused attention to strategy or, in particular the process and systems which support that strategy.

Instead they rely on organisational culture and the strength of their relationships. These after all have seen them through many a tough time. But leaning on them has taken its toll. Without strong financial reporting and transparent recruitment and pay, disquiet has begun. They lurch from one crisis to another, each time straining the very relationships and chipping away at the very trust they have always relied upon.

Without any mechanism for accountability, the organisational culture they were so proud of has become the Chief Executive’s excuse not to change their own toxic behaviour. All of this is harming their potential impact and growth, but it is also resulting in staff feeling undervalued and overworked, lessening their commitment to the organisation’s mission and values, increasing the potential for poor customer service and ultimately storing up problems until something has gone much more horribly wrong.

Enter a funder, board member or consultant who patronisingly deems to know better and forcibly recommends the introduction of a new strategic framework with target KPIs, new reporting structures, new systems and processes in order to ‘get a handle on all this and professionalise things’. They reach for the best practice guides and standard toolkits. They purchase off the shelf systems which no-one really understands. They copy and paste policies without a second thought. They hire consultants to force everyone to apply them. They impose strict hierarchy and delegations, so every decision has to go through a multitude of layers of approval before it actually happens.

This erodes their culture and has an impact on their relationships even faster than an over-reliance on them. It takes away individual judgement and accountability for decisions, takes away creativity, the ability to respond to what’s happening, the give and take required to sustain any relationship.

The professionals and boards are happy though. Costs have been reduced and they have a nice new strategy document and risk register to show for it too. Not to worry that most of those costs have likely just been pushed down the chain onto those they are supposedly there to support. Nor that as a result they are alienating or excluding often more marginalised communities.

This isn’t just a small issue. It’s through relationships that trust is more usually developed, that genuine collaboration can take place, that innovation becomes possible.

It’s through dialogue that we often learn the most about what’s working, what’s not and what to do about it. More importantly, it really, really matters for those committed to social justice not the bottom line, for any redistribution of power or share of voice.

This may seem an extreme example, but unfortunately so many organisations I’ve worked with and for have followed this path – from small social enterprises, to larger foundations and charities. It may not quick, but it’s often a slow and steady march. After all, there are powerful forces at play here. People take comfort in set strategy and process because it can protect them confronting their fears or justifying their decisions; they can make our lives easier in the face of hard targets and a lack of sufficient resources; if those in authority have set things up a certain way and everyone else is following the process then we very rarely feel able to question it.
annie-spratt-294450-unsplash

So if a reliance on culture and relationships is an issue, and a reliance on strategy and process is an issue, where does that leave us?

It’s tempting to conclude that what we need in the social sector is some kind of ‘balance’ between the two. That analysis for me is at the heart of the problem. What we really need to do is understand the interaction and dependencies between them. It seems fairly obvious that culture will drive how likely people are to follow a process or commit to a strategy, and that any process or strategy over time contributes to defining culture for good or ill. That relationships grow when people are given freedom to use their judgement, but that they also thrive when supported by enabling processes that ensure transparency and protect accountability. If this is obvious, and it really ought to be, then why can’t we more organisations seem to be able to apply that in practice?

When organisations do the way they work results in something like this:

  1. They recognise that a reliance on trusted relationships and organisational culture alone are not enough. The Kids Company scandal that rocked civil society is perhaps a case in point. As someone said to me recently, “I’m sure Sepp Blatter was surrounded by relationships of mutual trust”. Well, quite.
  2. They reflect carefully on what kind of organisation they are what kind of relationships they want to have. They start here, because otherwise they know they will quickly end up with something that (maybe) worked for others, not for them. We often say organisations need to ‘live their values’. But, unless values are used as the starting point for making hard choices about strategy, and unless all of your processes and systems are designed specifically to support and enable them they are nothing more than meaningless words on a wall.
  3. They allow people the opportunity to exercise their judgement. They build in flex to their strategies for the unexpected and unplanned. They delegate authority as far down as possible and at as high a level as possible, and ensure they have the systems to provide decision-makers with the information they need to do this well. If the process isn’t being followed, they find out why rather than come down hard.
  4. Finally, and perhaps most importantly they review their strategies, policies and procedures regularly. Not just on paper at a Board meeting, but by asking people that have to follow them. And when they do review, they continue to ask good questions: are our strategies and process enabling the kind of culture and relationships we want to have? Are they still providing the right information and mechanisms to ensure we are held to account, most especially by those we exist to support?
As I argued in my last column, governance needs to be in constant development, adapting as organisations grow or external circumstances change. Doing that isn’t easy when conditions of funding often focus purely on the strategy and process; when most governance support is for one-off ‘big bang’ exercises rather than funding core costs over a sustained period of time; where everyone wants to peddle their definitive guide, flowchart or toolkit; where we tend to value ‘lean’ organisations rather than effective ones.

But it really is possible if you stand firm and make your case to funders, if you take your time, if you embed this kind of reflection into the day to day conversations and meetings you have.

For me, this is how we create effective, resilient and responsive approaches to governance and management. Where strategy and process become enabling rather than constraining, where positives cultures and relationships can thrive without becoming toxic or unaccountable.

Unchecked, my experience is quite different to the conventional wisdom: strategy and process is eating culture and relationships – and not just for breakfast, but for lunch too. However, reliance on a strong culture and trusted relationships alone is no cure either. Rather than pitching one against the other, let’s get them all around the table for dinner to work it out.

Bob Thust is co-founder of Practical Governance, trustee of Local Trust and treasurer at the Bevy community-led pub in East Brighton. This column is part of a series created for Pioneers Post

Time to rip up the governance rulebook

Time to rip up the governance rulebook

BOB

We’re all guilty.  Funders, commissioners, umbrella bodies, influencers continue to perpetuate boards who are shackling rather than liberating our social missions. Bob Thust calls on us to step back and apply some sanity.

The proposal was signed off, but it was a hollow victory.  This was the third time I’d had to bring this back to the board, and it was basically the same as it had started out.  If anything, it was worse.  Less ambitious and less meaningful. Less connected to what our key stakeholders had said they wanted. I could have used the days we spent discussing it making progress instead.   

I’ve been here all too often, as I’m sure most of you reading have.  But governance doesn’t need to be frustrating, constraining and unhealthy.  It can be exciting, liberating, and progressive.  And it needs to be.   

 There is an increasing acknowledgment that tackling important social issues is (and always has been) complex.  An endeavour that can’t easily be distilled into a linear and contained process of cause and effect.  To have any impact requires us to be bold, to change strategy in response to what we learn, to act fast because the problems we face are urgent.  It requires that we represent, champion and promote the voices that so often go unheard.  It requires us to look beyond our own organisations and their continued existence and stay true to our missions, whilst recognising our inability to achieve any of them alone. 

 Yet, for organisations with a social purpose the predominant model of governance is command and control that relies primarily on systems of risk management to ensure survival and achieve predictable outputs, rather than stay true to a collective purpose.  A model that too often creates bottlenecks and inefficiencies, and places ill-equipped, distant boards that suffer from a huge lack of diversity in an ultimate position of power.   

Given the challenges we face we can’t let this status quo continue. 

Our problems start with a widely held assumption that legal structures which include non-executive boards equate to stronger governance than those which don’t.  I can’t see any good evidence for this.  Indeed I tend to see more evidence to the contrary. 

Trust in civil society institutions continues to fall, the recent civil society futures interim report highlighted an increasing frustration from those in the social sector (and the people they support) feeling they lack control and are not listened to, and we regularly complain of a tendency towards risk aversion rather than bold collaboration.  Recent Charity Commission research found only 40% of all trustees felt their board contained sufficient governance skills to effectively meet the needs of their organisation.  Despite it not being clear what these ‘governance skills’ are, from boards themselves this demonstrates an encouraging self-awareness yet a worrying lack of capacity. 

 Many of the most inspiring examples of social change continue to come from places that don’t have traditional boards at all.  Buurtzorg builds on a foundation of small, self-managed teams linked to neighbourhoods that provide a range of services for older people.  Chayn is not a traditional organisation at all but a distributed, volunteer run network supporting women suffering from domestic violence around the world.   

The predominant approach to governance we have now is seems to be resulting in exactly the opposite of what we need.  And we’re making it worse…  

As a sector we exacerbate the problem,.  We focus too much of our time, research, support, funding, recruitment and expectations on governance at board level.  Successive corporate and charity governance codes have emphasised the critical role of organisational culture, and yet we too often respond to challenges by first tightening controls or getting more professional expertise on the board, rather than helping organisations build stronger relationships of trust internally and with their partners and wider stakeholders.   

We too easily make the assumption that because it’s usually a board that carries the ultimate legal responsibility for the stewardship of an organisation, this also means boards necessarily carry the ultimate accountability for everything that the organisation does, including giving them the key role in setting strategy, in taking all the important decisions, and scrutinising the plans of the staff team.   

All of this means that we are placing non-executive boards on a pedestal: setting unrealistic demands and thereby setting them up to fail, scaring them into a narrow focus on operations and risk management, or else inflating their egos to the point where many overstep their experience or lack the humility to see themselves as just part of a much bigger eco-system, rather than those looking down on it.  If you add to that a reliance on unpaid non-exec boards that seriously limits the scope for genuine diversity you have a potent and problematic mix. 

startup-593341 (1)

So what do we do about it? 

Whilst this could be the starting point for a radical proposal for getting rid of boards altogether and ditching the usual systems and controls for risk management, that’s not quite what I’m arguing.  There is real experience and value to be had from non-executives. There are many social purpose organisations I know that actually might benefit from creating a non-executive board.  There is no point either in denying the high stakes involved in getting governance, accountability and legal compliance right and the need for controls in key areas.   

But it’s time we understood that board roles aren’t any more important for good governance than the staff team, partners or the communities these organisations exist to support.  It’s time we stopped scaring those leading social purpose organisations and helped them realise that the role of a board is not as constrained or as elevated in importance by its legal responsibilities as many assume, whatever your organisational structure.  Instead of warm words on the importance of user voice, lived experience and organisational culture, let’s actively encourage and provide the space to those leaders to look beyond the traditional and consider the multiple formal and informal ways they might develop mutually accountable relationships with stakeholders, rather than force them to rely too heavily on internally facing process and hierarchy.   

I admire many of the organisations and boards I’ve been working with recently, such as Lankelly Chase Foundation who have been carefully reviewing their own governance as part of their ongoing inquiry into working with complexity, or the  Association of Camerados CIC (AoC) who feel that legally responsible non-execs often have too much skin in the game to put mission before self-preservation (witness recent accusations of a culture of cover-up in the humanitarian sector, for example).  Instead they’re scoping an idea to set up an independent panel appointed by those involved in the Camerados movement and with a remit to hold AoC accountable by publicly publishing the result of an annual ‘mission audit’, whilst retaining the ability to be nimble and rapidly responsive.   

I’m not presenting these or any of the previous examples as solutions.  None of these organisations have ‘cracked it’. They wouldn’t say they have, and in any case what works for one situation will probably not suit another. 

But I do think it’s important that more people leading social purpose organisations are willing to meaningfully question the role, influence and power of all stakeholders, try different approaches, adapt and learn.  That they are willing to question whether preconceived management structures and governance models work for them.  Or even question whether a governance ‘model’ is the answer, as opposed to starting by building and nurturing a set of shared behaviours.  

So for funders, commissioners, umbrella bodies and those with influence across the social sector please let’s stop reinforcing the role of the board as the primary or even sole driver of leadership and governance.  Let’s stop equating the term governance with just a narrow focus on vaguely conceived notions of stewardship or ill-fitting risk management.   

Funders, stop forcing those you support into pre-determined approaches as a condition of funding, but instead fund them to explore what might be meaningful for them.  The Listening Fund from Blagrave Trust, which is giving youth focused social purpose organisations the space to figure out for themselves how best to ensure the voice of young people is heard and acted upon, is just one example of how we might start to re-balance this. 

More importantly, if you’re out there feeling frustrated or unnecessarily constrained by your board and governance arrangements, I’d urge you to take a step back and allow yourself the freedom to consider with others what might work best for you rather than consider yourself stuck with what you have.  Hold onto the fact that governance needn’t be a millstone around your neck, but a positive force for change.  Talk to others that have trodden different paths before.  Get yourself to some events like Losing Control (newsflash, we’ll be repeating this alongside the Social Change Agency in the near future).  And if you want to just have a chat, get in touch – we’ve as much to learn as we have to give.  

Ultimately, we can’t continue to predominately promote or accept a one size fits all, command and control model and hope that adding a few more diverse board roles will have any fundamental impact any time soon.  As Einstein said, the definition of insanity is doing the same thing repeatedly and expecting a different result.  It’s gone too far for tinkering around the edges, we need to rip up the governance rulebook and start again.

Bob Thust is co-founder of Practical Governance, trustee of Local Trust and treasurer at the Bevy community-led pub in East Brighton.