Nice Can Be Deadly to a Board

Midwest Nice, Board Culture & What to Do with Evaluation Results

Great board culture is more than simply having everyone “get along,” and having good discussions. It requires mutual accountability, a culture of ongoing learning, and increased complexity. Boards that want to thrive must move past old school habits of collegiality and evolve to higher performance.

By Kevin Smith

 

When I ask board members how things are going in the boardroom. Mostly I hear about how well the board members and the staff get along. Now, I presume that everyone is familiar with the concept of “Midwest Nice,” but just in case you’re not, or you need a good refresher, have a look at Charlie Berens’ work here. I grew up in Ohio and live in Wisconsin. I’m steeped in Midwest nice, which has many, many wonderful aspects. But here’s another truth: Nice can be deadly for boards.

The Irony of Collegiality

Yes, there’s a healthy dose of irony here to deal with. Of course we want and need directors to be collegial, and to get along, and to enjoy working together. But this goes too far when the result is a lack of accountability.

The Boardroom is Tricky

We already know that the boardroom can be a tricky space. There is no hierarchy in this space, no boss. (I’ve talked to a few of you board chairs that really believe that you are the monarchs of the board. Consider this a less than gentle reminder that you’re wrong about that.) The board is a group of equals set out to represent the membership, to set strategy, and provide oversight. No individual director has any authority outside of the collective decisions made by the board. This is our superpower, but not without some kryptonite. Most of us don’t come to this setting with great experience in governance and collective decisions. Most of us come from backgrounds with ingrained hierarchies. This can be a problem in holding each other accountable. This is where my struggle with Midwest Nice comes in.

Two examples that I’ve come across:

• At ABC Credit Union, everyone on the board and management team knows that board member X is not up to the task. But board member X will continue to be on the board because it’s an issue that no one has confronted or dealt with.
• At XYZ Credit Union, the board is dedicated to improving board diversity, they have a strong set of policies and high expectations for directors for engagement and ongoing education, etc. The problem is that “many board members don’t know when it’s time for them to step down of their own accord.” But they don’t want to have term limits. They just want people to “know.”

I could write down dozens more examples. Directors who fall asleep. Board members who are clearly not prepared. Those who ask questions that are waaaayyy off topic and cannot be reigned in. (Feel free to comment or to send me your versions. I love these stories. I believe in the power of the cautionary tale!)

Too often, it’s the wonderfully human “nice” in us that prevents these circumstances from being dealt with. That coupled with the structure of this group of peers makes us not to deal with anything that feels like confrontation, particularly among equals. This version of “nice” also prevents people from speaking up, and for festering groupthink. Nice can be deadly to a board.

This isn’t about confrontation. This isn’t about being mean. This doesn’t have to sour the tone of the boardroom and make people less friendly. This is about accountability and making sure everyone is doing the job to the standard that is required for a modern board, to the board’s expectations. And in the board setting, that means putting systems and policy in place to create the guardrails.

How To Do This

Written Policy. You’ve heard me say this before, and I’ll keep harping on this: write it down as policy. The board has to ratify policy with a vote. When it’s codified, everyone has a tool for holding each other accountable. It’s not personal; it’s about the policy that we agreed upon.

Board Evaluations. Again I will repeat myself. Annual board evaluations can be a tremendous help in this regard. I’ve been beating this drum for years. Still there aren’t enough boards incorporating evaluations. Part of this is that it can feel like confrontation and a lack of “nice.” I also have a word of caution for those of you who ARE using board evaluations. (First of all, kudos to you for doing it. Really!) Make sure you’re doing something substantive with the results. Evaluations are not just for patting yourselves on the back for a job well done. This is for finding ways to improve and identifying those areas. Ergo, you must follow up the evaluations with an action plan for improvements.

(True story: I once went through a stack of almost ten years of evaluations from a single board. Without fail, one board member is highlighted year after year for his lack of preparation, his constant comments about operations, sleeping in board meetings, etc. Yet, he’s still on the board.)

Evaluations don’t mean anything if you don’t use them for improvement. But the tendency is to use defer to “hope” in the evaluation report. That is, to “hope” that particular board members will see themselves and their failings in the report and self-correct. That does happen, occasionally, rarely. The better approach is to use the evaluations as the tool, the catalyst for human conversations in the interest of improvement. “What can we do to be better?” Which must be followed with a written action plan.

There’s a lot of talk about culture in organization and in board rooms. Creating culture is an ongoing effort with no finish line. My experience tells me that the culture in board rooms is entrenched and slow to change even with the most strident of efforts. It can be done though. My struggle is with wanting a too vague notion of “culture” and hope to solve problems that arise as part of “nice.” And for people to just “know” (as a result of that robust culture) when it’s time for them to step down, or to change their habits. Again, it can be done. What I’m saying is that tools like written policy, and evaluations with action plans, among other things are part of that culture building process that provide guardrails for accountability. This approach can maintain the “nice” while pushing the board forward.

The expectations for credit union boards is not going to go down. Our responsibilities are too significant and increasing in complexity. This requires evolution and progress from everyone including the board.

And finally, before I sign off, make sure to tell your folks I says “hi.”