Board Communication and the Staff

by Tim Harrington and Kevin Smith, TEAM Resources 

A credit union board chair recently contacted us with some questions regarding board communications. One issue had to do with the board’s communications with the staff. Now ordinarily, this is the kind of discussion that we try to shut down immediately with a simple cliché of “all communications to the staff should come from the CEO.” It’s a cliché that’s easy to trot out because it holds up pretty well under almost all conditions, sun, rain, snow, wind…. But it got us to thinking about where that cliché would begin to break down, because they all do at some point, right? (Thanks. We knew you agreed with us.)

So, the rule of thumb (let’s see how many cliché’s we can get in here) is that the board has one employee, the CEO. And the board speaks with one voice, communicating with the CEO. Individual directors do not give any direction to the CEO, officially or unofficially. The board operates as a unit, within the boardroom, deciding its strategy and communicating that when finalized to its one employee with a unified voice. The CEO then directs the leadership and staff of the credit union with their marching orders.

Board Communication with Staff

Any communication outside of this model breaks down the chain of command: board →CEO→staff. But this chain of command must be agreed upon and negotiated, between the entire board and then with the CEO. For this to work there must be complete buy-in and understanding. What we’re talking about here loosely follows the Carver Policy Governance Model, which we believe is the most effective form of governance for credit unions to incorporate. Carver refers to problems in the communication chain as “Leaky Accountability” around the CEO, where, “…board members continue to relate in their official capacity with other staff….” Let’s explore this a bit.

Committees Should Not Mix Board and Staff

The Carver model only recommends use of three committees: 1) Governance Committee, 2) Nominating Committee, 3) CEO Relations Committee. According to John Carver, “No common practice so threatens board wholeness as the traditional approach to committee work,” because, “many board committees are actually designed to be involved in staff-level issues.” But why is this a problem? A simple committee is just designed to get more work done. The issue lies with a couple of board members working on a committee with a couple of staff members. In that setting, the board is not speaking with a unified voice. Staff members involved hear the comments of a board member, which then inadvertently becomes policy because out of sheer deference to the director(s) or self-preservation for the staff member. This breaks down the chain of command.

The key to success is to have only the above recommended committees if possible and to make sure that everyone understands the communication chain. Staff members should not be mixed on committees with board members. Committees, made up of only directors, should do their work to make recommendations that are taken back to the full board for discussion and approval. The policy creation then stays at the full board level.

Appropriate Times for Board/Staff Interactions

What’s that you say? It sounds like we’re saying that the board should never, ever, ever, ever, speak to anyone save the CEO. It does sound that way, but it’s not the case. There are three other circumstances where communication between the board and staff are ok. First, in an emergency. Second, in social settings. And third, while incorporating GBWA – “Governance by walking around.” Let’s unpack the baggage here.

Perhaps it should be common sense to presume that there are emergency circumstances where the board (via the board chair, or singular board representative) must communicate with the staff. But we will lay this out to avoid potential misunderstandings. In the event that the CEO is no longer functioning in his/her official capacity for an out-of-the-ordinary reason, the board should clarify to its best ability under the circumstances what is happening, why, and what the next steps will be. These tend to be negative circumstances, resignation, prosecution, incapacitation/death, but just to keep on the bright side of life, also consider a winning lottery ticket causing the change. It is best here if the board steps in to communicate this with staff. Having a member of senior management take this task may seem like a viable alternative, but it is not ideal. The board’s delivery of information this critical to the direction of the organization should come from the highest level and not delegated to another unless unavoidable.

It is also very important to the health of the credit union to have the board know the staff and the workings of the shop, and to have the staff know the board members, where they come from (as representatives of the membership, after all), and the importance of their role. The board should have sufficient opportunities to interact with the staff … (this is important) … socially. We don’t advocate that you simply trot them out once a year for a “board breakfast” giving everyone five minutes and a doughnut to create this perspective. Social board/staff communication in the right circumstance is completely appropriate.

Which leads to the third setting: GBWA – Governance by walking around. Directors who truly understand the workings of their organization will have a better sense of how to strategize. They can do that through observation, and interaction with the staff. But all involved in this setting must have a clear understanding of the limits. This is not an opportunity for directors to get down in the weeds and start micromanaging or witch hunting. It’s not an opportunity for staff members with grudges to get a director’s ear and badmouth the CEO. In this setting, making sure everyone understands the context for this interaction. But (you say), doesn’t this beg the question of how the board will truly know the level of staff morale, with all of the boundaries suggested? I’m glad you brought this up. You’re right.

A Key Reporting Mechanism for a Board: Annual Staff Surveys

Under none of the circumstances raised above, will the board be able to take the temperature of the staff and find out how morale is. There is only anecdotal information this way, which is incomplete and ineffective. In this respect, we fully advocate that the credit union perform a complete staff survey annually in order for the board to have confidence that it knows the state of morale. This information is crucial for the board’s ability to completely evaluate the CEO. This is a form of controlled communication that protects the chain of command, insulates the board from rogue information and provides invaluable feedback. It also shows trends when done repeatedly. Sadly, few credit unions take this on, easy as it is to do.

So, we started with “the board communicates to the staff through the CEO.” (Period) Which still, more or less, holds up. But like any good rule, there are exceptions, which you should navigate carefully. We hope this helps.

Thank you. Come again.

*Pitch Warning! – TEAM Resources offers staff surveys for credit unions. Please send us a note if we can help with that.