| Author's Name: Mark Schultz
Date: Tue 01 Nov 2016
When reflecting on the role of a Board and its many components, the term “accountability” is often elevated towards the top of the list. However, it is important to think about accountability in terms of “for what “and “to whom” to establish some context for this aspect of good governance. In this article, we will discuss accountability in terms of these 2 parameters.
Accountability for what?
There are 2 key areas of accountability responsibility that a Board should have specifically on its radar, namely Mission & Strategy and Performance.
Mission & strategy, because this is the prime responsibility of the Board. If the Board is not clearly articulating the organisation’s Mission, why it exists and how it will achieve its long term goals (i.e. strategy), then who is? Management and staff are engaged to deliver the services required to achieve the Mission, not create it in the first place - this is clearly in the Board’s domain and therefore a primary area of accountability; and
Performance, because you cannot set the direction of the business and then not set in place a system to monitor progress, review results achieved against expectations and make adjustments if required. Furthermore, performance does not relate to just financial outcomes. Whilst these are certainly important and fundamental to long term viability, the results must be achieved within the values and principles that have been established by the Board and communicated throughout the organisation – it should never be profit at any cost!
These are the two key areas of “accountability for what” – how does your Board stack up against this?
Accountability to whom
In terms of “to whom”, Board accountability centres on Stakeholders and Culture
Stakeholders, because in the non profit sector, organisations do not have owners or shareholders, rather there are usually a diverse range of stakeholders who have various degrees of interest and influence. The challenge for the Board is to understand who their stakeholders are and engage with them relative to both these perspectives. The key words here are “understanding and delivery”, no more, no less, for both have consequences that are not in the best interests of the organisation. A Board’s accountability level is directly related to the outcome of this stakeholder assessment and should be a primary activity of the Board on an annual basis.
Culture, because the Board not only establishes the foundations of its preferred culture through its strategic planning process, ( i.e. vision, mission, values and principles), it also becomes accountable to that culture through the way its board members behave individually and collectively, as well as how it rewards positive contribution and reprimands recalcitrant behaviour. A good or bad example of this is how the major banks are dealing with these issues at the moment – how do you think they are performing in the “accountability” key responsibility area?
In summary, as individuals or as a Board, once we have decided to accept the position as a Director of an organisation, we do not have a choice when it comes to accountability. We can however choose the degree to which we will accept this responsibility and the systems and processes we will put in place to deliver our expectations. The choice is ours and so are the results.