Building A Better Board: Public Sector Success Story

By Stephen Pariser & Donna Finley

Which is more important: the project or getting re-elected? We can’t get along! We can never reach consensus. Our vision is not strategic and our focus is on the wrong issues. This Board is lacking talent and direction!

Sound familiar?

Unfortunately, these are common troubles for the public sector, or in this case, municipal boards. Private sector Boards of multi-billion-dollar corporations as well as high profile not-for-profit Boards also often suffer from Board ineffectiveness. The public sector has its own unique set of problems, including the fact that precious tax dollars are at stake.

One Municipal Board recognized their ongoing performance challenges and wanted to become a higher performing Board.

The Answer:

A comprehensive and long-term process to determine and address why, as a Board, they were falling short in guiding the organization and serving the constituents of a Canadian City of over one million.

To begin, the Board, brought in Management Consultants Finley & Associates, a team that has extensive expertise in governance.

The approach Finley employed has been transformative – resulting in significant increases in Overall Board Performance.  

The chart below shows the improvement in the total Performance Score of the Board collectively improving from just 45% to 78% over six years.

 

Figure 1 – Overall Board Performance Scores 2011-2017

OverallBoardPerformance

 

#1. Develop your Assessment Metrics and Methodology
Using over 200 characteristics, falling under nine critical performance dimensions, a digital survey was custom developed for the Board’s unique circumstances, then sent to all Board members and the Senior Executive. The results drove the creation of a two-year Board Development Plan, to be renewed over 3 cycles (6 years total commitment).

#2. Build a Priority-Based Strategy
Based on a fair and comprehensive assessment, the Board was able to develop a focused strategy in a Board Development and Governance Work Plan to guide their work as it related to: fiduciary responsibilities; key stakeholder needs; risk management; Board meeting effectiveness, Board composition and succession planning; strategic direction and implementation planning; management of key executive; and, Board member effectiveness. Critical components within this work plan addressed how the Board would develop itself internally to address problems plaguing their effectiveness.

#3. Measure, Measure, Measure – To Generate Insight
Every 2 years (for three 3 cycles – 6 years total) a new survey was taken and used to revise the Board Development Plan to guide the Board’s work, drive progress, and generate insight from actual longitudinal trends.

Does this work? Take a look at the table below:

  • Individual dimension scores with less than 60% become primary areas of focus.
  • Scores at 60-79% become secondary areas of focus.
  • Scores of 80% or higher typically are not addressed unless they are declining significantly, (or are addressed by an action plan already being developed for a lower scoring area).

 

Table 1 – Individual Dimension Score Groupings 2011-2017

IndividualScoreGroupings

Since 2011, the Board has been able to improve so that in six years NO dimension is scoring below 60%: Four dimensions score at 60-79%, and five dimensions are scoring above 80%.

 

#4. Increase Results with Individual Assessments
After 4 years, progress had been strong; however, there was fear that improvement in Board performance was flattening. In response, Finley & Associates’ assessment for individual Director performance was deployed. These Individual Director Assessments measured the thirteen dimensions of an effective Board member with several opportunities for qualitative input. A survey was then completed by each Director, and the Senior Executive, each evaluating the performance of the other respondents, including offering constructive comments.

The outcome of this work was Assessment Reports measuring individual performance and an accompanying Individual Development Plan for each Director and the Senior Executive. This work was conducted annually with longitudinal tracking to assess long-term development and ensure individual development goals remained challenging and relevant.

When Individual Director Assessments[1] were introduced (see Figure 1, Cycle 3), not only did it generate significant collective improvement over and above the usual two-year development plan revisions, it supported the development of each Board Member, as well as the Senior Executive.

 

Figure 2- Average Individual Respondent Scores 2015-2017

AverageIndividualRespondents

In the last 2-year cycle the Board and Senior Executive experienced the greatest period of growth – not due to Board turnover but pure skills development.

 

Every respondent[2] improved by at least 5%,[3] with some respondents improving by over 23%. In addition, the performance gap between Board members declined from a standard deviation of 10% in the first year to a standard deviation of 6% in the final year.[4] The Board was improving in performance, with the development of weaker members catching up to their stronger performing peers.

# 5. Make Success Part of the Plan
It is critical to build in a number of non-negotiable elements to a Board transformation if the organization is serious about real substantive change:

  1. Commit to a multi-year process of at least six years and invest the time necessary to create the right assessment for your organization;
  2. Achieve 100% survey participation rate with rich qualitative feedback;
  3. Have a Board Chair and Governance Chair committed to providing Board members with regular guidance and feedback;
  4. Dedicate time at every Board meeting to honestly evaluate if the Board Development Plan is advancing; and,
  5. Have a Board that will not have full turnover every 5 years.

 

If you would like to learn more about Finley & Associates’ Board Assessment tools or Board Development services, please connect with Donna Finley – donna@finleyandassociates.com or Stephen Pariser – stephen@finleyandassociates.com.

 


 

[1] Assessments were performed by each respondent providing scores across 13 dimensions and qualitative feedback for all their peers. Scores and comments were aggregated to generate a report and individual development plan.

[2] Over the three year period, three new respondents were added, while none departed the Board. The eight respondents that were present for all three assessments, on average, had higher performance scores than new members while rate of improvement had no significant difference.

[3] This respondent had a top three score every year, with the top score in the first year. Most respondents achieve double digit performance improvements over the course of the assessments.

[4] When analyzing standard deviation for the eight respondents who participated in all three years, the standard deviation decline becomes more gradual than with total population (i.e., 10% in 2015, 8.5% in 2016, and 6% in 2017 vs. 10% in 2015, 10% in 2016, and 6% in 2017).

Leave a Reply

Your email address will not be published. Required fields are marked *