Board Responsibility
By Dr. Brian Simmons
Photo by Christina @ wocintechchat.com on Unsplash
Stewards are those who have been given a trust. That’s why a synonym for a board member is a trustee! So, all board members are steward leaders! There are the faithful and the other kind!
What are the primary responsibilities of board members? Board members of organizations have three responsibilities: fiduciary, strategic and generative.
At the end of the day, it is board members who are ultimately responsible for the finances of the organizations they lead. Not the CEO, not the President but board members! CEOs and Presidents DO have a BIG financial responsibility similitude as understewards, but it is the board members who serve as the primary stewards for the organizations they lead!
I know of an organization who ousted a CEO and blamed the CEO for years of overspending. This demonstrates a fundamental misunderstanding of who is ultimately responsible for the finances of the organization. In this example, the dismissed CEO was a scapegoat for a board who abrogated their responsibility. So sad.
Board members should look at four financial reports at every board meeting: balance sheet, budget including year-to-date spending, profit and loss statement and cash flow statement. Also, the board should read and understand the annual audit report and interact with the auditor. If board members understand these documents, they know the financial condition of the organization they lead as fiduciaries!
I know of a board of a type one Christian school who regularly for years did not receive accurate or timely reports from their parent organization. This board was unable to fulfill their financial responsibility, and the board of the parent organization failed to hold the CEO and parent organization responsible for providing these necessary reports. This lack of transparency destroys trust and mitigates against organizational effectiveness.
Concerning strategic planning, board members should work with the CEO and administration to collaboratively come to a shared vision, and board members should be sure that they are partners in the strategic direction of the organization. There is no room here to abdicate this board responsibility to an autocratic CEO who brings a strategic plan or an acronym of a strategic plan down from a mountain like the Ten Commandments in his hands! On the other hand, no board has enough knowledge about the organization to author a meaningful strategic plan apart from the CEO and organizational leaders. The writing of the plan is the work of the CEO and his team. Board members should think strategically about the plan.
Finally, working in their generative mode, the board is responsible for to ensure that the organization remains mission true. It is the board’s responsibility to be sure that the organization becomes what they collectively believe it should grow to become!
It is required of stewards to be faithful!
