Hey board members! Your job is governance, not operations

Article originally published in the Philadelphia Business Journal on October 27, 2014

One of the key lessons that board members must learn is not to cross the line between governance and operations. The most important job of the board on which you serve is to hire the CEO and hold them accountable for results. By crossing the line, you interfere with the ability of the CEO to do their job.

This is a lesson that many newly appointed directors and trustees without prior board experience need to learn. Experienced board members should be reminded of this periodically, as I was reminded last week when I crossed the line from governance into operations because I felt passionate about an issue. I should have known better.

So, what are the duties of a board member? Your job is oversight, not operations. You are a fiduciary and must exercise the duty of care and loyalty to the institution. You must put the interest of that institution above your own interest or the interest of management. If it’s a for-profit company, you represent the interests of the company and its shareholders. If it’s a non-profit, you represent the interests of the institution and those that the institution serves. Throughout this article, I use the term “CEO” to describe the chief executive of the organization, whether it be a for-profit or non-profit organization, and the term “director” to include “trustees.”

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