Tension in the workplace can be counterproductive, but do you know that leaders can use healthy tension to enhance alignment in the effectiveness of their boards? In this special episode, Douglas Nelson is joined by two of his colleagues at the Discovery Group, Margaret McNeil and Karen Gilmore, in a discussion about the role of healthy tension and how that tension plays out in board relationships across the sector. This conversation is a preview of an event they are holding at the Terminal City Club in Vancouver on June 2nd, 2022. To learn more about the event, visit our website at TheDiscoveryGroup.ca.
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Special Episode: Healthy Tension And Board Alignment With Margaret McNeil And Karen Gilmore
I am thrilled to share this episode with you. It is a great conversation I have with two of my colleagues here at The Discovery Group, Margaret McNeil and Karen Gilmore, about the role of healthy tension and how that tension plays out in our board relationships across the sector. It is a critical issue and it is a preview of an event that we are holding on June 2nd, 2022, in Vancouver, British Columbia. We bring together social profit leaders from across the sector to talk about this role of healthy tension and how leaders can use it to enhance alignment in the effectiveness of their boards.
In this conversation, Karen, Margaret, and I talk a little bit about what we have in store for the event but explore the issue. Karen Gilmore has a wealth of experience in corporate and nonprofit organizations at both the local, provincial, and national levels. She was a corporate lawyer for several years in private practice and acted as in-house counsel. She brings expertise in operational insight and complex issues in our sector.
Margaret McNeil is a former CEO of Canuck Place Children’s Hospice and the winner of the 2020 Waterstone Award for most admired CEO in the broader public sector category. She is a great colleague, and we are looking forward to this conversation and sharing it with you, and we hope to see you at the Terminal City Club on June 2nd, 2022. To learn more, go to our website, TheDiscoveryGroup.ca. Thank you for reading.
It is wonderful to have everyone back. I am pleased to welcome my guests, my colleagues, Margaret McNeil and Karen Gilmore, for this special edition of the show. We are going to be talking about the role of healthy tension in the relationship between CEOs and the boards. It is something that we have heard a lot about over the last couple of months as organizations are returning to in-person board meetings or finding themselves back because of Omicron back into the virtual environment for their board meetings.
Everyone wants to find their best role, provide their best value and get the most out of the board that they can and understand that everything is not necessarily going to be smooth and some tension is not only necessary. It is quite healthy for the organization. Margaret, I am interested in your thought to kick us off here. How should CEOs think about the role of tension in a healthy relationship with their board?
A lot of people think about tension as equating to conflict. Tension is healthy in the board/CEO relationship. The board and the CEO share the responsibility for the organization. The board is an asset. They are there to help and work with the CEO in the achievement of the organizational vision, strategy, and mission.
When we talk about tension, it is inherent in that relationship. When I think about tension, I think about a rubber band because in a rubber band, in order for it to be functional, it has to have tension. If there is too much tension, we know what happens. It can stretch, break, and then there is a misalignment in the relationship.
If there is too little relationship and tension, often the governance has lost its vitality and is not providing the support that is necessary in order for the board and the CEO to work effectively together in moving the organization forward. The mission could be at risk. Tension is not the same as conflict. When we can understand and know that tension is built into the structure of the relationship but not into the relationship between the people, we can use that tension as a healthy tool to help the board and CEO work together to achieve the goals for the organization.
We had talked both on the show and with many colleagues when we were doing CEO round tables over the course of the pandemic. Some boards had different reactions to the pandemic as boards are having different reactions as we are coming out of the pandemic. Some boards drifted off into the ether and they either did not attend meetings or did not read things. They were showing up absent or were absent.
This was more common. Other boards were jumping right into the works and they wanted to understand every detail in the spending of every nickel in the organization. It is a way of managing the ambiguity and evolving pandemic as we are trying to find a different balance than we had before the pandemic. It is certainly, more than we had during the pandemic. Karen, what has been your perspective and what have you heard from people in terms of managing the healthy tension from the perspective of board members?
The examples that you gave are an excellent example of reflecting the fact that this healthy tension that Marg refers to is not static. It is changing over time as the organization changes and its circumstances change. As the pandemic hit our society and the organizations, the roles and responsibilities inevitably changed. The unhealthy tension comes when there is no clarity as to what role the board and the CEO are playing in these circumstances.
For example, in a boardroom, you may have found, during the pandemic, that the board meetings are diving much deeper into HR issues than they ever have before. The board is asking about the health and well-being of employees who are not the direct reports to the board. That can create a sense of unhealthy attention if the CEO feels that the board is taking a different role than they were prepared for.
With that, you can get a conflict but if the organization, the board, and CEO have had this conversation and understand that these are unique circumstances, you have got some expertise. In these circumstances, this role is going to shift and would like support from the board. That becomes that healthy tension. It is something that evolves.
We can use tension as a healthy tool to help the board and CEO work together to achieve the organization’s goals.
One of the things that jumped out at me in conversations with some clients and other CEO colleagues, the board members who have not been as active or appropriately have not been in the active day-to-day of the organization may be somewhat disconnected from the fatigue that leadership teams and organizations are feeling. As a result of the last couple of years, the ambiguity of what return to work and return to the office, return to a mission, or in-person work looks like.
Many board members I am hearing are coming saying, “We need big ambition. We need to set our sites higher than they have ever been set before to show the world that we are back and we are here to deliver on our mission.” It is a great voice to have around your board table at any time. That tension leads to can be a bit unhealthy if you have got an organization that is feeling the fatigue of the last couple of years. Particularly CEOs who are feeling that rally fatigue of having to keep their teams up and going and giving confidence to donors and funders over the last couple of years.
Rather than taking a moment to pause and assess where we are as an organization and to be most effective in how we can deploy our organization to purpose, boards may be pushing CEOs to take on great, super ambitious targets and strategies that may not align with the energy level or the capacity of the organization at this point.
The result is a board feeling the organization is underperforming, it lacks ambition, and the CEO seems tired. The CEO may share with us through our work how frustrated they are with the board. It does not understand what is happening in the day-to-day. Marg, I am curious not to tell a story from your past about when that may have happened to you, but does that match when you are talking to CEOs?
You have raised such a good point that the pandemic has left a lot of teams tired. In my experience, having heard from a lot of CEOs about managing through this last period of time is keeping their boards informed as to what is going on within the organization. Both in terms of staff retention, staff recruitment, staff satisfaction surveys, and the energy level within the organization are critical.
It is key for the leaders to be sharing that information with their boards because boards are, by nature, focused on the future. They are looking at strategy and where the organization is going. It is up to the CEO to provide that clarity to the board about the organization’s readiness, be able to take on the next steps or the need to pause and regroup.
Also, what work they are doing to support their employees as this return to work is happening and as they recover their own energy and that of the organization in order to move forward. To me, the critical part of that is the communication between the CEO and the board about what is happening within the organization so that the board does not get too far ahead and the frustration of the CEO is not resulting in that misalignment between the board and the CEO.
Karen, the other side of that coin is also true that you could have boards that want to stay, hold their ground, stay steady, and focus on the immediate. You have got CEOs or management teams that are ready to move, and we need to change gears. What is a strategy or a thought that you have about how CEOs and management teams can engage their boards who are not ready to take the step in this post-pandemic world?
The board volunteers are also dealing with their own stresses and tensions. They are often, in themselves, involved in businesses and seeing the burnout and the stress there, and perhaps bringing that into the organization. They are serving on the board. To Marg’s point, it is what information is coming to the board. Is that information at the level so that the board can respond at the level that the CEO needs them to respond at?
Comforting the board, providing that information, and saying, “Here is where we are at,” giving an example that the CEO could show that the revenue is back to the 2019 level. We did not have to go into our board reserves giving that comfort, showing the plan to the board, and engaging the board at that level. Back to your previous question about the board being more in detail during the pandemic, it is that challenge of bringing the board back up to seeing the strategic level and responding at that strategic level.
Healthy tension is not static. It changes over time as the organization changes and its circumstances change.
One of the things that we have seen from successful CEOs, management teams, and effective boards is understanding the level of detail necessary at the right time. It is not always going to be the same level of detail, but usually leading with strategy and not the detail is the common theme for successful support of those relationships.
There still has to be that background foundation of knowledge that the board has to have in understanding the operation of the business model of the organization in order to not get involved in it and not being in it but understanding it so that it can provide the right advice at the strategic level.
Marg, I know you have seen this, and we have talked about this a number of times, but often, when we are working with organizations and if they say that the board is too involved in operations, as an example, we ask to see their board package. We are struck by the fact that almost all of the information that is being provided to the board is on operational issues.
It is like, “You are doing it to yourself.” That is some piece of advice for people. If the board is not giving you information about the discussion or with your board is not happening at the level you want it to, look at the information you are providing. Make sure that it is at that appropriate level you are seeking or work with the board to get it to that level over a meeting or two to get that good advice.
As we are coming to the end of this, we have had a great conversation about the nature of tension, how it can be healthy, and some of the ways it is showing up in organizations here in May of 2022. For the readers, let’s give them something tangible and some questions to ask themselves if they are thinking about this role of healthy tension in their board. Karen, what is one question that you think CEOs or executive directors should be asking as they are reflecting on the tension with their board?
At a broad high level, to Marg’s point at the beginning, there is a joint responsibility between the CEO, the board, and the organization. Perhaps the initial question is, “Does the current working relationship you have with the board reflect that joint responsibility that you share moving forward with the mission of the organization?”
In other words, is the board fulfilling? Is there clarity around the board roles and responsibilities in the circumstances of that time so that the board can provide the proper levels of oversight and strategy for the CEO? Ask yourself, “Have we established a working relationship that recognizes there is this tension but reflects that joint responsibility in a way that can move forward with the mission of the organization?”
Margaret, do you have a question that people could stop and ask themselves?
The question I would ask, as a leader, if I am being self-reflective is, “What do I need from my board to carry out my role effectively?” That could take a whole lot of different forms. There might need to be clarity of role or a need to be fewer operations in the board package so they can ask strategic questions. Do I need strategic advice from them? How do I get that?
Are we asking the board what they need to fulfill their role? Are we actively engaging them and making sure that they have the tools they need to give the advice that we are seeking?
To move forward, communication between the CEO and the board about what is happening within the organization is critical.
Are we giving the board the opportunity to assess their own structures and processes to ensure that those structures and processes are supporting the role that they should be playing? Often, you find antiquated committees that no longer bear a resemblance to what is needed now.
Hopefully, the end of the pandemic will be an opportunity to get rid of every fundraising or development committee across the sector. That is the subject of another episode. The third question that I would add here is, as CEO or as executive director, have you taken the time to ensure that the board understands the business model of your organization? Do they understand the nature of the revenue that supports your mission, whether that is government funding or philanthropy? The nature of that philanthropic revenue, is it restricted or unrestricted? Do they understand the expenses that it takes to sustain and energize the organization?
The best value we are going to get from our boards is the advice that they can give in bringing their own expertise and experience from their own lives, both personal and professional. That advice becomes infinitely better if they understand the business model of your organization. Those three questions, does your current working relationship reflect the joint responsibility you share with the board as CEO? Are we asking the board what information they need to do their job effectively? Are we clear on what information we need as CEOs to do our jobs effectively? Finally, have we taken the time to ensure the board understands the business model of our organizations?
Thinking through those three questions and thinking about the answers for your organization is going to make a big difference to how you are able to approach the next conversation with your board chair and your board. We think it will make a big difference. This conversation is a part of a series of conversations that we are calling The Exceptional Series.
The first in-person event of the exceptional series is taking place on June 2nd, 2022, in Vancouver at 8:00 AM at the Terminal City Club. You can learn more about that on our website, TheDiscoveryGroup.ca. It would be wonderful to have you there. Check out the website and we will see you on June 2nd, 2022. Thanks for reading.
About Margaret McNeil
Accomplished Not for Profit and Public sector Executive with experience in health, housing and social services sectors, with a focus on leading and managing both strategy and operations to improve community outcomes for populations in need. Strengths include leading the development of a shared vision for services, designing and implementing strategies for change and for effective operations, developing effective high-performing teams, and developing strong working relationships inside and external to organizations.
Recognized by ‘Business in Vancouver’ in 2017 as Nonprofit CEO of the Year and Waterstone Human Capital for Canada’s Most Admired CEO for 2020 in the Broader public service category.
Specialties: Strategy, facilitation, health and social policy, program development and delivery, team development, mentoring and leadership
About Karen Gilmore
Karen Gilmore is a Senior Associate at The Discovery Group, working with boards and senior leadership of social profit organizations to elevate community impact. A strategic leader, Karen has a wealth of experience in corporate and non-profit organizations at local, provincial, and national management and at board levels.
A corporate lawyer for 40 years, both in private practice and as in-house counsel, she brings legal expertise and operational insight to complex strategic and governance issues. In her most recent position as VP and General Counsel at Fulmer & Company Investments Inc., Karen established the legal role, served as a key strategy resource, and led the corporate philanthropic work that was instrumental to the development of a social enterprise business.