To be more strategic, boards need to have ‘learning’ conversations rather than ‘grading’ conversations.
Governance is the set of processes used by a board of directors to oversee organizational performance, ensure adequate goals for the organization and determine the best strategy to stay vibrant, valuable and visionary for the members.
In surveys, how the board can become a “strategic asset” to the organization is one of the top five concerns of board members. In the contemporary governance literature, boardroom experts weigh in with concerns that boards may not be paying sufficient attention to strategy. A board’s fiduciary responsibility is much like an auditing function, tracking numbers and outcomes against desired performance and new goals. The board’s strategy responsibility becomes more of a dialog function, ensuring enough conversation to explore where we are and where we need to be. The responsibility to set and approve strategy rests with the board.
Board dialog becomes one of the most compelling reasons to meet face to face. A board can review, assess and direct performance by reviewing measures remotely and through conference calls with the executive team. Strategy, however, requires a substantive investment in exploratory dialog to understand the business environment and sort out the choices. In the governance literature this exploratory dialog is called “generative dialog ue.” Richard Chait and his co-authors articulated this process in their perspective shifting book, Governance as Leadership: Reframing the Work of Non-Profit Boards. The concept aligns well with today’s emphasis on the role of the board as strategic asset.
Generative dialog is not “question and answer” or “debate.” It is an open discussion that seeks to include diverse perspectives, appreciate and understand a broad array of options, and discover greater meaning in a board’s choices, rather than defend positions or beliefs. When strategic recommendations are presented to a board by the executive team, the result is frequently give and take, assessment and evaluation, and some debate. That process is not dialog - nor discovery-oriented, it is positionally focused: e.g. determining right or wrong, good or bad.
Generative dialog is a bit messier and definitely more asymmetrical than a back-and-forth conversation. Generative dialog seeks to discover and understand the meaning in trends, options, best practices, threats and disruptions through a learning conversation rather than a grading conversation. There are no winners or losers in generative dialog because furthering meaning and understanding is the outcome. That outcome leads to more informed decision-making when strategic choices unfold for the board.
The characteristics of generative dialog are open and appreciative listening, inquiry rather than position statements, an expansion of choices and understood nuances to choices, widely inclusive, discovery and learning, creativity, fresh perspectives and enhanced mutual respect for all participants. This type of open dialog and discovery requires time, affirmed respect for differences of perspective, respect for skepticism (doubt) that is explored, and full participation by all the board not simply the more verbal. Undertaken this way, generative dialog protects against the risk that some important board perspectives would go unspoken due to the structure of board debate. It is clearly more inclusive than the typical board conversation, which is can be frequently lopsided.
In today’s boardroom where agendas are reserving at least 50 to 70 percent of the time for strategic discussion, there is sufficient time for generative dialog. I’m frequently asked what types of strategic topics might fill that part of the agenda? Here are some sample topics that lend themselves well to generative dialog: future desired board composition; how to best go about finding and recruiting desired board members; opportunities to create credit union member value from mergers, acquisitions or partnerships; exploring the board’s risk appetite around any number of organizational risks; the potential impact of disruptions in banking; generational shifts that impact our model of service; and learning discussions regarding the evolution of the business environment for credit unions. These are all real examples of broad based strategic dialog from boards with which I’ve worked. In every case, once the board got the generative motif down and relaxed out of judgment mode, they came away satisfied and more aware.
Many credit union boards I see and talk to in workshop sessions regret the lack of input and dialog they get to have with themselves and the executive team on strategy. Exploring what generative dialog looks like and how your board might find more time for such dialog may be a great board development goal for the next 12 months. While the executive team will still take the lead on analysis and preparation of potential strategic objectives, boards are demanding a greater role in the process. Generative dialog can deliver on that desire.
Les Wallace, Ph.D., is president of Signature Resources Inc., author of Principles of 21st Century Governance and co-author of A Legacy of 21st Century Leadership. He is a frequent speaker and consultant on leadership and governance.