Thursday, November 3, 2011

Governance: turnng a corner?

Fourth in a series of posts about the October UUA Board meeting

I doubt it is any secret that the transition to Policy Governance® has been a somewhat rocky one for the UUA. Part paradigm change, part culture shift, and part stand-in for other issues, the board (including me) and the staff have managed to talk past each other quite successfully.

This meeting was different. According to Carver, monitoring reports are mostly part of a consent agenda – unless there are issues, you really don’t need to talk about them.

This time we didn’t need to talk about them. It was the second year for most of them, the staff used a format that was easy to understand and evaluate, and there really weren’t any issues other than a lower than acceptable number of trustees doing the evaluations. So we addressed the latter in a constructive way that will help us as trustees to be more compliant.

I went from the UUA Board to one the following week I just joined that is not under Policy Governance. It is a well run, sophisticated organization with a member database to die for. We (happily) met for two days from 8 to 5, which tells you it is a very different board from the UUA Board.

What really stood out for me in terms of this board’s financial reporting were the very detailed reports on investments and audit statements that had the familiar glazed look from most of the board members – these are smart people with strong backgrounds, including finance and business, but it struck me that what we really wanted to know about our new investment manager did not require a long presentation. Few of us have the experience to judge the wisdom of post initial hedge fund tenders, the 20 year median OAS, or the OECD CLI. We didn’t even get the headline “Twisting in the Wind” joke referencing the Fed’s Operation Twist (I wonder if they were taking bets on that?) What we really wanted to know was who are these people and how do we know we can trust them with our money?

That is at the heart of Carver’s philosophy – non-profit boards are typically not financial wizards and shouldn’t have to be, fiduciary responsibility not withstanding. So how does management know their records and decisions are sound? What proof do they have of that? This is a very different approach from showing board members all the data and expecting them to figure it out.

A big thanks to the UUA staff for answering the right questions.

Next post: UUA Board at Occupy Boston

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