No matter how long you’ve served on your organization’s board, the events of 2020 showed you something new — regardless of whether that insight was solicited. For many leaders, the year blew a hole in the confidence that a well-functioning, productive board could be ready for anything.
In itself, that isn’t a bad thing. The idea that a board is as prepared as possible to address any situation thoughtfully and effectively with minimal risk can be called “governance maturity.” It’s the goal at the end of a continuum of organizational growth that embraces careful stewardship of information, security, visibility, transparency, and more.
Many boards, prior to 2020, would have placed themselves close to the goal at the end of that continuum — closer than they actually were. The spring and summer’s quick decisions and reactions illuminated deficits in board function and process. Consequently, these boards started enacting changes to strengthen their governance practices.
So, yes, 2020 was humbling, but your board grew as a result. Now, you have a choice to make. Do you stop where you are, nearer to the goal of governance maturity but not quite there… or do you keep that momentum going?
Why Strive for Governance Maturity?
Deficits in governance expose organizations to all the risks of the modern world. Consider some of these issues today’s leaders face:
- Specificity and breadth of legal demands on organizations: Boards must juggle local, state and federal laws and regulations that can tie their hands or lead to unwelcome consequences. Consider Kalamazoo County, which recently settled a lawsuit with its former corporate counsel that included accusations of violations of Michigan’s Whistleblower Protection Act.
- Vulnerability to sensitive information leaks or security breaches: For leaders who rely on email to perform their roles, these incidents are chilling. Consider what happened to the Manor, Texas, school district in late 2019. A phishing attack by email cost the district $2.3 million. Earlier in the year, ransomware attacks targeted over 20 Texas local governments.
- The volume, speed and complexity of information sources: During the early days of the pandemic, leaders were faced with constant, often conflicting information on the nature of COVID-19 and what steps were reasonable. As San Antonio, TX, Northside ISD school board member Karen Freeman noted recently, an important first step in assessing school needs was narrowing down the factors to consider when evaluating school reopening.
- Social media amplifying the concerns — and criticisms — of new populations: While providing an accessible, inexpensive means of communication, the mirror of social media can be harsh. From Henderson, KY, to Ottawa, Ontario, boards are having to contend with input outside of the official channels of public feedback and trustee deliberations.
- Pressure on organizations to be socially responsible: The civil unrest of 2020 has only amplified demands on public organizations to take concrete action to address inequality and injustice happening on a local, national, or even global scale. Consider when protests were held during a Burlington, WI, school board meeting. Organizational leaders are pressured to give their entities a voice on these issues in new, untested ways.
The impact of imperfect governance costs organizations — and their leaders — time, money and reputations.
Why Does Governance Maturity Matter?
Consider what governance shortfalls look like against these conditions. Even in compliance with open meetings considerations, board leaders may opt to communicate in ways that minimize trust in the public, members, and constituency. Knowing the risks, they may continue to use unsecure media such as email to manage board business. They may turn to unvetted or out-of-date sources of information to inform decision-making.
All of these issues affect regular citizens, but in elected officials and leaders, they can hamstring an organization and do irreparable harm to its reputation.
So, governance maturity matters. At the end of a multipronged effort of self-evaluation and refining, leaders as a group will be able to:
- See organizational data more clearly
- Understand societal and cultural factors impacting their organizations
- Meet today’s security challenges
How To Assess Your Governance Maturity
The best way to determine your place on the continuum of governance maturity is to ask yourself a few difficult questions about your organization—and answer them honestly.
Legal and Regulatory Compliance
- How careful is leadership about use of email and messaging for sharing information?
- How efficient is your workflow for collection and review of board materials?
- Can board materials be updated in real time?
Modern, Secure Tools and Information Management
- Do you have a secure, digital distribution process for board materials?
- Do you have secure forums to distribute and respond to sensitive data?
- Are sensitive files protected against leaks and compromises?
News and Information Sources
- How comprehensive and focused are your sources of news and data?
- Does your leadership team have a coherent source of news analysis to spot changing trends and opportunities for improvement?
- Does your board management tool allow you to append key links and supporting information to meeting discussion topics?
Social Media Tools and Public Perception
- Do you have an objective view of your organization’s reputation?
- Do you have a way to assess board performance and experience gaps?
If you hesitated over any of these answers, you (and your board) are not alone. The path to governance maturity requires commitment and a willingness to change what in some cases are long-term practices and behaviors.
We’re Here to Support Your Governance Maturity Journey
Diligent can help with many of the issues today’s board struggles with. With over 16 years of industry-leading experience and partnership with 14,000 boards, Diligent has identified the critical steps that guide organizations to governance maturity. Whether you’re considering the adoption of a Diligent board portal tool such as BoardDocs or iCompass or you’re already using one, you can look to our governance experts to guide you further down the path.