1/12/2008

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NRECA CEO Close‐UpIndian Wells, California

Ellen‐Earle Chaffee, PresidentValley City State University

January 16, 2008

• Great governance is a quest.• The basics are well‐known and change little. • Greatness and misery lie in the human factors.

• Prevent major mistakes.• Automate the basics.• Revisit them on a regular schedule.

• Expect greatness.• Learning, partnership, values • Applied to strategy and interpretation.

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Short Stories that Made Headlines

• Board of Regents includes• three US Senators, • three US Representatives, • the Vice President, and • the Chief Justice of the United States

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• Board member heads a teachers union, kpickets.

• Board member expected favors, coach was fired.

• Board member recommended hiring a bodyguard investigated for child molestation.yg g

http://www.ajc.com/metro/content/metro/clayton/stories/2007/12/15/clayethics_1216_3DOT.html

• Board member heads a teachers union, kConflict of interestpickets.

• Board member expected favors, coach was fired.

• Board member recommended hiring a bodyguard investigated for child molestation.

Conflict of interestPersonal power

Old boy networkyg g

http://www.ajc.com/metro/content/metro/clayton/stories/2007/12/15/clayethics_1216_3DOT.html

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• Spying on employee, misappropriation ofSpying on employee, misappropriation of resources, favors for friends, illegally large surplus

• Director arrested (felony), fired, 16 mo. pay• 5 whistleblowers; one fired, one suspendedp• AG investigation of management• AG investigation of board chair

• Roles and responsibilities report• New Chancellor to strengthen the “system ”New Chancellor to strengthen the  system,  supervise Presidents

• One powerful President went renegade• Chancellor intervened

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• Support for Chancellor: 10/11 presidents, statewide faculty, all but one newspaper

• Board reaffirmed “roles and responsibilities”• Board negotiated Chancellor’s resignation.  Cost: $200,000

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• Four‐year terms, no board education• Trappings do not replace education• R&R report detailed the confusion, not the expectations 

• Power trumped policy

We Know What To Do. We Just Don’t Always Do It. Why?

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• Too complicatedl• Personality trap

• Hunky Dory• Discourage questions• The buck stops where??

“Everything is perfect, Mr. Chairman. Blue skies.  Spring is right around the corner.”                                      ‐‐CEO Jones

• Oversimplifyd• Focus on decisions 

• Personality trap• Hero complex• Hold back

Hey, this is FUN! I can do this!Chairman Smith

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Put it in Writing

CoCo‐‐opop

BoardBoardCEO

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Ensure •Are we doing what we are supposed to do?

•Are we doing what we are supposed to do?

organization fulfills its mission

Ensure •Will it exist and succeed for a long time?

•Will it exist and succeed for a long time?

organization’s long‐term viability

Duty of CARE• Decide and act in good faith

Duty of LOYALTY• Decide and act in the best interest of the 

i ti t t

Duty of OBEDIENCE• Faithful to founding documents

• Prudent person level of care

organization, protect and support

• Obey the law

Where does it say, “Focus on finances???”

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HOW WHAT

Mission

Roles

Transparency

• Codify it (policy manual)• Annual calendar • Flow chart it• Hang it• Set criteria• Make it into a form• Assign it to a Board committee

• Mission fulfillment• Organizational longevity• Accountability• Roles and responsibilities• Transparency• Leadership succession• Strategic goals• Assign it to a Board committee

• Measure it• Headline it• Review it routinely

• Strategic goals• Conflict of interest• Legal issues• Performance improvement

Fiduciary, Strategy, and Interpretation

ISF

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INTERPRETIVEINTERPRETIVE

Governance PyramidGovernance Pyramid

Cultural, Social SystemsCultural, Social Systems

STRATEGICSTRATEGICBiological SystemsBiological Systems

Integrated Systems Theory

FIDUCIARYFIDUCIARY

Governance as Leadership: Reframing the Work of Non‐Profit Boards by Richard P. Chait, William P. Ryan, and Barbara E. Taylor, NY:: Wiley, 2004.

E. Chaffee.  "The Concept of Strategy:  From Business to Higher Education."  Higher Education:  Handbook of Theory and Research, Vol. 1.  New York: Agathon Press, 1985, 133‐171.

Mechanical SystemsMechanical Systems

INTERPRETIVEINTERPRETIVE

Raising Rates ExampleRaising Rates Example

Re‐examine assumptionsContrarian scenarios

STRATEGICSTRATEGICNew technologiesAlternative sources

Tell the story: Communication plan

FIDUCIARYFIDUCIARYAnalysesEfficiencies

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There

ELEVATION 100’•Mission•Longevity

Here

ELEVATION 10’ ISF

http://www.balancedscorecard.org/basics/bsc1.html

ISF

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ThThere

•Customer Benefit•Internal Business Processes•Learning and Growth•Financial

ISF

• LearnLearn•Governance, Industry•Communication skills

• Values and priorities• Expectations “softExpectations,  soft automation”

ISF

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• Written, reviewed, revised, enforced member expectations; term limits

• Focus on Quality• Speak the headlinesRound the table• Round the table

• Distinctly different Board candidates• Governance staff and budget

ISF

• Well‐educated boardWell educated board • Shared vision and strategies• 50+ percent discussion – no vote• Strong, trusted board committees• Consent agendasConsent agendas

ISF

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INTERPRETIVEINTERPRETIVE..

Governance Pyramid SummaryGovernance Pyramid Summary

LEARN TOGETHER, BUILD INTO THE AGENDALEARN TOGETHER, BUILD INTO THE AGENDA

STRATEGICSTRATEGICPARTNER, BUILD INTO THE BALANCED SCORECARDPARTNER, BUILD INTO THE BALANCED SCORECARD

FIDUCIARYFIDUCIARYAUTOMATE, BUILD INTO THE CULTUREAUTOMATE, BUILD INTO THE CULTURE

• Great governance is a quest.• The basics are well‐known and• The basics are well known and change little. 

• Greatness and misery lie in the human factors.

• Prevent major mistakes.• Automate the basics.• Revisit them on a regular scheduleschedule.

• Expect greatness.• Learning, partnership, values • Applied to strategy and interpretation.