Know the Roles
A prominent corporate directors group, the Chairmen’s Forum, has recommended splitting the Chairman and CEO functions. There is a slow moving trend to do just that. As the complexity of tasks given to the board increases, having a separate non-executive Chair can make sense. It frees the CEO to focus on running the company.
For this to work smoothly, board members need to understand and respect the new roles. The CEO will remain a member of the board and the board’s employee who leads the company. The board will have a new leader, but the CEO’s role remains vital. The new Chair must also have the experience, wisdom, and judgment to understand the limits of the board’s role and of her or his role. When board and senior management don’t mutually understand their roles, the company is in for trouble. The independent Chair cannot become a co-CEO. The separate role structure creates new dynamics that must be carefully managed for the board to work effectively.
Does the U.S. Nuclear Regulatory Commission need a mediator to get along?
Reuters reports, “After a grueling week in which their internal dissension was aired on television, the five members of the U.S. Nuclear Regulatory Commission face an even bigger hurdle – figuring out how to work together.” Reuters spoke with us today about whether mediation could be the right solution. http://www.reuters.com/article/2011/12/15/us-usa-nuclear-mediation-idUSTRE7BE1AH20111215
Tone at the Top
The disturbing events surrounding Penn State have given the American public a lot to think about. Many questions are being raised, and we won’t have all the answers for some time. Among the many swirling issues is the board’s role in this situation.
Perhaps most important is what is typically called “tone at the top.” Tone at the top forms the cornerstone of an organization’s cultural values and sets the standard governing conduct in any organization. The board has a responsibility to insist on an ethic appropriate for a university –one that does not condone dishonesty or illegality in any aspect of university life. Just as important, the board has to make sure that this ethic is conveyed, believed, and followed.
University boards should take a closer look at how they assess the “tone” and true ethical culture of the university. Large companies do that regularly so that the senior management and the board can know whether or not employees believe and pay attention to the carefully crafted ethics codes adorning bulletin boards near water coolers. In some ways, this responsibility can become more difficult for a non-profit board comprised of volunteers who are appointed for a variety of reasons.
University boards everywhere should be asking themselves these and many other questions. Have they assessed, and do they regularly discuss, the major risks to the university – e.g., what circumstances can inflict major damage? Do they understand how ethics and university culture can mitigate risk? Does the board have in place indicators as to whether the ethics and tone on which they insist is observed? If athletics has a major emotional and fiscal impact on the university, are they prepared for an event that can damage the program?
Again, there are many questions to be answered and more issues that will emerge. For university boards everywhere, this is the time to reflect, to strengthen risk management, and to ensure that the tone at the top emerges loud and clear from the boardroom.
