How working boards work- a working paper

 

Daniel W. Lang

 

 

hep.oise.utoronto.ca, volume  1, issue 1, 2004, pp. 78-110.
Abstract

There are a number of studies that classify governing boards into different types. Some classifications are based on management form. Some are based on the form in which authority is exercised. Some are based on the form of institution that the board serves. Most of these classifications include "working boards" but few offer a clear definition of them. Even those that do attempt to define this type of board acknowledge that little is known about how they actually function. This study examines a small public not-for-profit institution  with a "working board" to determine how that type of board functions, where it succeeds and where it fails, and how it is different from other types of boards.


 

 

 

Introduction

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n 2001 three professors from the University of Toronto were asked to conduct an external evaluation of the Canadian Centre for Language Benchmarks (Lam, Cumming, and Lang, 2001).  The purposes of the evaluation were accountability and program development. The CCLB is a small, not-for-profit, independently incorporated organisation that provides a variety of services that have to do mainly with measuring facility in the English language. In terms of accountability, the CCLB answers to a board of directors and an executive council. Indirectly, the CCLB is also accountable to its principal sources of funding: the Federal government and several provincial governments that, in effect, purchase its services.

Program development for the CCLB does not mirror its responsibilities for accountability. The array of clients served by the CCLB is very broad, varied, and highly dispersed. Implicit in the agenda for the evaluation was an assumption, if not an outright recognition, that the CCLB's governance structure was being stretched between two different spheres of responsibility. Because of the strain on governance, the Centre often found itself in an organisational dilemma as management and staff had to choose among many priorities that, given the CCLB's small size, were competing for scarce resources.

Because priorities were many and resources scarce, some members of the CCLB board were involved directly in the organisation's management and administration. Some aspects of the board's committee structure directly mirrored the administrative organisation of the CCLB as professional staff reported to chairs of board committees as well as to the CCLB's executive director. To the extent that the members of the CCLB board who were involved in management also represented constituencies that the CCLB served, two outcomes were assumed. They either served accountability by bringing the CCLB very close to its constituencies or circumvented accountability by favouring certain constituencies with "insider" status.

Whether the CCLB was performing well or poorly, the structure of its board had a lot to do with it. When the CCLB was incorporated no thought was given to whether or not its board either should or at some time would shift into a mode of operation that we now associate with the terms "working board" or "line board." Even if prior thought had been given to that question, few answers would have been found because, among the several models of governing boards, working boards and line boards are the two types about which the least is known.  By using the evaluation of the CCLB as a case study, we may come to know more about how working boards work.

 

Types of Boards: A Taxonomy of Function

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overning boards in the public sector may be classified in at least three different ways.  The first and perhaps most common classification is to identify boards by the types of institution that they serve. Thus a board might be described as a university board or a not-for-profit board.  Another basis for identification centres on what boards do and how they exercise their authority. Examples of boards that are defined this way are a governing board or a working board. The third definition is based on a board’s relationship to management, for example, an administrative board or a management board.

            This taxonomy is not rigid and exclusive, as would be the case in botany in which each plant species can occupy only one classification.  Instead, as various classification schemes or forms of governance have evolved, there has tended to be overlap between them. For example working boards and line boards, which are the principal topics for this discussion, have some times been characterized by what they do and how they do it, and at other times by their relationships to management.

            In terms of a case study, then, it is important to determine generically to which class of governing board the case belongs, or, if it doesn’t, whether it is an anomaly or some sort of new form of governance. Of course, it is also possible that previous classifications were inaccurate and required further examination.

 

Corporate Forms

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oards may be differentiated by the corporate forms that their respective organisations take (Bowen, 1994; Carver, 1990).  This template quickly leads to a distinction between profit and nonprofit boards (Bowen, 1994). For profit boards may be subdivided further into public (publicly traded) and private (not traded).  Nonprofit boards may be subdivided further into boards of public organizations that relate directly to a government or government agency, and private boards that oversee organisations that, other than being sanctioned by government, have no direct connection to a government.

There are some “in between” templates. For example, Carver (1990) identified a third category -- governmental boards – that seems to occupy a position somewhere a not-for-profit public board and a not-for-profit private board. In this case the board is delegated by government to oversee other organizations in which government has an interest but which the government does not necessarily support. This arrangement is sometimes called “management by contract” (Rekila, 1995; Lang, 2002).

Another “in between” type of institution may be public and not-for-profit, but   operates in a market that is created and regulated by government. This would, for example, be the status of public schools under a voucher system, or of public colleges and universities that are funded partially by tuition fees that government regulates.

Profit boards govern public or private business corporations as stockholder representatives Their main responsibility is to create wealth for the investors by increasing share value and/or distributing.

Public nonprofit boards govern corporations chartered to serve charitable or governmental interests. Their main responsibility is to build and maintain an effective organisation within the charter’s purpose. There is no stock ownership and therefore no distribution of profit. Any surpluses must be re-capitalized. These organizations receive a large proportion of revenue from funding and donations rather than from sales of products or taxation. Private nonprofit boards are similar to public nonprofit boards but serve charitable non-governmental interests. 

 

Governmental boards govern quasi-governmental organizations like water or health authorities and fully governmental organizations, like municipalities and school boards. They have no profit distribution, and they derive the largest portion of their revenue from taxation and/or user fees.

 

Action and Authority Forms

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nother way of thinking about boards is to ask about their authority and how they exercise their authority.  (Carver, 1990; Paquet, Ralston, and Cardinal, 1989).  Seen from this perspective, boards can be classified into a different set of groups.

Governing boards are legal entities and authorities for incorporated organizations whose authority is exceeded only by their owners or the state. Governing boards are at the top of the organisational pyramid and have total authority and accountability for all aspects of the organisations' activity.

Line boards derive their powers from the organisation’s ultimate authoritative body, which in the case of public institutions is usually the state. Line boards may establish policy and oversee subordinates. They are not positioned at the top of the organization, but function lower in the organisational hierarchy usually in lieu of a single manager. Although line boards are described in the literature of governance (Carver, 1990) not much is known about how they actually function and how or whether they differ from working boards. They certainly differ in terms of organisational location because a working board could also be a governing board at the peak of the organisation. At lower levels in an organisation, however, working boards look a lot like line boards, and vice versa.

Advisory boards are functionally like standing committees, but without delegated authority. They are formed and empowered by a host organisation, and at the discretion of the organization. They are not legally required. Their advice may or may not be taken and acted on. By this definition advisory boards usually co-exist with some other form of board that is superior to it in terms of authority.

 

Management Forms

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overning boards can be also be classified in terms of their relationship to    management of their respective organisations (Paquet, Ralston, and Cardinal, 1989).

            Working Boards are perhaps the most difficult to define. They can be understood conceptually but are problematic in practice. They tend to be associated with organizations that have few or even no full-time staff. Members of working boards perform operational and administrative tasks. In that sense they are like line boards.

Administrative Boards are also closely involved in management. They set priorities for staff and review their work. They are highly, if not exclusively, internally oriented. One could reasonably argue that an administrative board is a working board for an organization with a larger professional staff. Indeed, one could reasonably argue that the only difference between an administrative board and a working board is the nature of the “work” that they do.

Administrative/Management Boards are found in organisations that have professional managers. This type of board is concerned with developing and applying management processes (directing, planning, organizing, monitoring, controlling and evaluating) to work being done by staff. The board may establish standing committees and monitor their performance. Administrative/management boards have both an external and an internal orientation. Because of their external orientation, these boards see governance and accountability as parts of their role. A useful way to describe and understand this type of board is to think of it as the non-for-profit sector’s version of a franchise.

Management/Policy Boards are also involved in management, but not at all levels. They are most active in planning, in reviewing the performance of staff, in developing policies and strategies, and in determining organisational structure. Management/policy boards arbitrate organizational "turf wars." To the extent that they are involved in administration, their activity is associated with longer-term decisions. This type of board has many of the characteristics of management by contract.

Policy Boards are characteristic of large organisations with highly qualified chief executive officers and professional administrations. They are mainly concerned with governance, strategic planning, and reviewing reports and recommendations from their CEOs and their standing committees. Their orientation is mainly externally focussed and long-term. The policy board in the public, not-for-profit sector is the closest in function to the corporate board in the for-profit private sector.

 

Working Boards and Line Boards: Where Do They Fit?

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ith two exceptions these classifications are relatively clear cut. Each has a small but solid and concise body of research literature that defines it and describes how the actual boards that fall within it function. Despite the fact that there are, in effect, three paradigms that assert an explanation for all boards, there is not much overlap among them. However, again there are two exceptions that appear as anomalies on one panel or another.

            The exceptions are the working board and the line board, both of which seem to occupy a position somewhere boards that are defined by authority and boards that are defined by their relationship to management. Moreover, many of the characteristics that define working boards seem to define line boards as well, and vice versa.

            Carver (1990) defined working boards and line boards separately, but also said that working boards are really a variant of the governing board. He also said that working boards ought to be called “working-group” boards in order to reflect the true nature of what they do. What they do, according to Carver, is perform the roles of the governing board and of the staff of the organisation simultaneously.

            If what Carter said about working boards is true, then they are functionally very similar to line boards, which Carter also defined as a type of board. Even less is known about line boards than about working boards. If, as Carter suggested, the line board is rare and normally “unlabeled” perhaps it is no more than a variant of the working board. The only substantive difference between Carter’s classifications of a working board and a line board is that a line board may function at several levels within an organisation, whereas a working board functions from the top as a governing board. But, also according to Carter, a working board can be involved at any level within the organisation as well as at the top. At this point the differences between the two become difficult to discern clearly.

            In some of Carter's later studies this lack of certainty about how a board can both govern and "work" borders on contradiction: "The board's sole official connection to the operating organization, its achievement, and conduct will be through the Chief Executive Officer" (Carter and Carter, 1997). Unless one accepts the possibility of unofficial connections, governing and "working" are contradictory roles.  

             Murray (1996) expressly disagrees with Carter about the nature of working boards. He argues that working boards should never – either in theory or practice – be confused with governing boards. Such confusion, Murray points out, causes working boards to become what he calls “meddling boards.”  Murray also contends that Carter’s paradigms, in regard to working boards at least, are incorrect, or at least inoperable in practice (Murray, 1997).

            Although what Taylor called the "new work" of not-for-profit boards might seem to be a compromise between the views of Carter and Murray  (Taylor et al., 1996) it does not resolve the differences between the two. Instead, Taylor's point is pragmatic: it is a waste of valuable time and talent for members of not-for-profit boards to engage in operational activities, presumably even if they could do that without compromising their responsibilities as governors.

 

The Canadian Centre for Language Benchmarks as a Case Study

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o there is a conundrum of theory in an important area of governance. There is very little empirical evidence about what working boards exactly are, how they work, and the extent to which they are the same as or different from line boards (Murray, 1997). It is that gap in knowledge which this study proposes to fill. To do that we will begin with a summary of what is known or, at least, hypothesized about working boards and line boards. Following that step, we will devise a series of generic tests by which the actual performance of the board of an organization that appears to fit the known descriptions of working boards and line boards can be appraised. Those tests will then be applied to the case study organisation, which is the Canadian Centre for Language Benchmarks.

 

 

Current Knowledge

 

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arter and Murray are both succinct in their descriptions of working boards. According to them:

 

My [Carter’s] term ‘workgroup,’ however, denotes a governing board with little or no staff. It must govern and be the workforce as well. Very small organizations, such as civic clubs, are often in this dual position. The group is incorporated, so a corporate governing board exists. It is merely a governing board with another set of responsibilities. The organizational position of a workgroup board is not only at the top, but everywhere else as well.

 

A key element of this definition is that working boards are governing boards. Carter also says that line boards are not governing boards. They are instead “group[s] inserted where a single manager might have been.”

            The second definition, Murray’s, is similar:

 

A successful Working Board can exist when the nonprofit organization  is new, small, all (or nearly all) made up of volunteers and whose services are not  numerous or complex.. . .In these conditions, board members are often the most committed and knowledgeable members of the organization and have often worked up to the board as volunteers.

 

            As similar as these two definitions may seem, there are several important conceptual differences between them. First, Carter believes that working boards are governing boards categorically, regardless of their performance. Murray, quite to the opposite, says that while working boards might perform well as governing boards in certain circumstances, “it is a major mistake to force a Working Board to become a  Governing Board.” In other words, working boards are not necessarily governing boards.

            Another difference is size and composition. Carter seems to see organisations with working boards as very small and without any employees. To Murray size is a broader concept, encompassing organisations like housing co-operatives, advocacy groups, hospices, and day care centres. While organisations like these may indeed have large contingents of volunteers, most of them also have professional staff. In most jurisdictions hospices and day care centres, for example, are legislatively required to have certified or otherwise licensed professional staff. Such organisations also have significant expense budgets (if not revenue budgets) to meet such costs as rent, insurance, food, and equipment. So, even if all the professional staff were to volunteer their time, which might be the case in some organisations run by religious orders, the organisation would amount to much more than a civic club.

Carter’s view is that the working boards can be effective if they, first, understand that governance and management are different roles, and, second, keep those roles separate. Murray believes that view to be naïve and over-simplified. To him, the key to success is something along the lines of a careful and deliberate division of labour among all sorts of activities, including governance and management. The essential distinction in Murray’s view is not between governance and management; it is between the important and the unimportant.

            When Carter’s description of line boards is added to what he says about working boards, and when both of those views are contrasted to Murray’s views, one conclusion becomes clear.  Micro-management and confusion, both strategic and operational, are real and present dangers for organisations with working boards (or line boards) regardless of how the boards are defined. This is a conclusion that is broadly held (Etzioni,1964; McFarlan, 1999; Mintzberg, 1979).

            The tendencies of working boards and line boards to micro-manage and confuse is in some respects inherent in the composition of their membership.  There are essentially three sorts of board members: lay, institutional or constituent, and expert or professional. In some organisations, board members from all three groups are also volunteers who serve pro bono. For larger organizations, this mixture might not be a cause of difficulty and in many cases may be a source of strength to the board and, in turn, the organisation. But for smaller organisations, the mixture might have a less salubrious effect.

            To understand this, let’s ask what the role and nature of each group is. To begin, the origin of the term lay is instructive. Its root is laikos from classical Greek, where it means “of the people” which in turn means not from a religious, political, or professional orthodoxy. A modern expression of the concept as it applies to governance is to say something like “not necessarily expert in the area of operation for which an organisation was established” (Duryea, 2000; Ingram & Associates, 1993; Konrad, 1993)

            This might seem counter-intuitive if not downright imprudent. But there is a rationale for lay membership on boards. The rationale has mainly to do with the presence of other types of board membership. Lay membership is a check against monopoly power and vested interests, both of which could arise from institutional and constituent interests, and from expert and professional interests. These are criticisms to which school boards and self-regulating professions are often exposed. The basic case for lay membership is that it protects the public interest. That role can be more than a matter of principle for organisations that depend on support from government (Konrad, 1993), government agencies, and from some philanthropic foundations. It is not uncommon for governments to appoint lay persons to boards precisely because they do not have any prior association with the professions or constituencies that the organisation serves.

Lay membership can be imperfect. Lay members’ lack of expertise can make them ineffective, and, once they realise that, cause them to become indifferent. To the extent that working boards perform the role of management or even of staff, the lack of expertise can be seriously debilitating. Working boards thus should have a tendency away from lay membership and towards expert and professional membership.

            The need for expertise explains why working boards often have members who themselves are experts or professionals in the very area of activity that their respective organisations occupy. To perform well as governors, other types of boards need expertise too. Working boards, however, also need expertise to perform well as managers and administrators. Chait and Taylor, however, point out that having expertise is one of the factors that sometimes leads boards to manage instead of govern (Chait and Taylor, 1989).

            The sorts of organisations with which the working board and line board models are typically associated often have diverse sources of funding. That is sometimes the reason that they have to rely on a combination of professional and volunteer staff. All not-for-profit boards rely on constituency membership to connect them to their respective communities for the purposes of accountability and responsiveness. However, the concept of constituency representation should be unusually important and inherent to working boards for the additional reason that they depend on their constituents for operational support.

Board membership often includes volunteers. Lay membership and public service that are characteristic of the small, not-for-profit organisations with which working boards are typically identified are also characteristic of volunteerism. One might go so far as to argue that they are one and the same (Carver and Mayhew, 1994;Scott, 2000). Scott (Scott, 2000) contends that volunteerism is essential to the survival of the entire not-for-profit sector. Carver (1990) on the other hand is dubious about the involvement of volunteers in governance and suggests that the very use of the term "volunteer" weakens the leadership and stewardship obligations that board members should fulfil. 

In preliminary summary, then, although not much is known about how working boards work, we do know some things about how they ought to work. Because they depend on their boards to play two roles, the mixture of their membership may be both essential and problematic. We also know that they should be prone to micro-management, and to confusing the boundaries between governance and management, and even between management and administration. We know that organisations with working boards should be very close to their constituents. And we know that working boards and line boards, in actual operation, might be the same.

 

Generic Tests of Board Performance

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overning boards can behave in several different ways. The behaviours are not necessarily determined by the organisational form of the board. If one seeks to test the performance of a governing board, as in the case of the Canadian Centre for Language Benchmarks, it is important to know beforehand the sorts of behaviour that might be expected.

            A number of case studies of the performance of governing boards in the not-for-

profit sector indicate the following possibilities (Murray and Bradshaw, 1990):

·        ratifying boards: in which a highly influential chief executive officer suggests policies, and the board’s role is to approve them;

·        chair-dominated boards in which highly influential chief volunteer officer dominates and the other board members follow;

·        fractionalized boards in which divisions about goals lead to board cliques and infighting;

·        consensus boards that comprise non-traditional, anti-hierarchical, highly participatory  structures;

·        disorganized and apathetic boards in which  no one wields much influence and little is achieved.

                  Wood (1992) did not necessarily disagree with Murray and Bradshaw about possible board behaviours but did suggest that the ways in which a governing board behaves might be the product of an historical progression beginning from the organisation's inception and the formation of its board:

 

·        founding state in which  the board for all practical purposes is the organisation and operates collegially with high levels of participation until a chief executive officer is appointed and in place.

·        "supermanaging" phase that is  characterized by high levels of activity  and independent decision-making by the board. The board often begins to recruit  members with distinctly managerial and bureaucratic ideas about the role of the board.

·        corporate phase in which the board becomes increasingly willing to rely on the expertise of the chief executive officer.

·        ratifying phase in which the board is minimally involved in oversight and routinely ratifies the chief executive officer's recommendations. 

Although this is a progression it is not a ratchet. A board can slide back to earlier phases, as, for example, would the case if a chief executive officer failed to perform adequately or left abruptly. Thus among the first questions to ask in evaluating the CCLB and examining it as the object of a case study were about the board's internal psychology and about its stage of evolution.

            The next step was to set a series of specific generic objectives against which the organisation's performance, including that of its board, could be appraised. Expressed in another way, the objectives represent the performance for which the board would hold the   chief executive officer and the organisation at large accountable. The objectives were:

To establish clear and appropriate roles and responsibilities for the board, councils, committees, and staff.

 

      To develop and implement clear measures of accountability and performance of the board, committees, and staff.

 

     To establish clear lines of communications between stakeholders, staff, and board.

 

            To represent stakeholders and ensure regional input

      To provide services and products in a timely manner;

To review goals and objectives and systematically undertake planning based on them

 

      Within the context of the case study, the question became in what way and to what extent the form of governance either advanced or impeded the realisation of each objective.

 

The Canadian Centre for Language Benchmarks

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he CCLB is located in Ottawa, Canada's capital. The Centre provides a variety of services in the area of assessing facility in the use of the English language by persons whose first language is not English. Its principal clients are public not-for-profit organisations that provide language training to immigrants and refugees. These include, for example, Citizenship and Immigration Canada, TESL Canada, and the Ontario Centre for Language Training and Assessment. The CCLB, however, does serve firms and organisations in the private, for-profit sector that employ immigrants and refugees. Two examples of private sector clients are JDS-Uniphase and the Canadian Aviation Maintenance Council.

             The CCLB has a board of directors and an executive council. The membership of the board ranges between 21 and 23.There is a chair, vice-chair, and secretary-treasurer. Every Canadian province and territory except Newfoundland, New Brunswick, and Prince Edward Island is represented ex officio on the board. Four members of the board are appointed as "Expert Field Members." Other members come mainly from organisations, like the Canadian Council for Refugees, which are clients of the CCLB.

The board has eleven standing committees. Several of these committees -- for example, the Web Site Review Committee and the Communications Committee -- relate directly to units within the CCLB administrative structure. The chairs of committees sometimes are the de facto supervisors of CCLB staff. Some committees  -- for example, the Learner/Outreach Participation Committee and the Canadian Language Benchmarks Committee -- are de facto operational units that conduct the business of the CCLB without compensation.

            The CCLB has an executive director and between five and eight staff. Some staff are employed episodically on contract in connection with specific projects. At any given time the centre may have as many as three unpaid volunteer staff, in addition to “working” members of the board. The CCLB's annual budget ranges around $500,000. About three-quarters of that amount can be regarded as continuing or base operating expense. The balance is earmarked for special research and development projects undertaken on a contractual basis. Overhead costs are not charged to contracts, but some staff are assigned to contract projects exclusively.

            The CCLB had had rocky relationships with its executive directors, and had had relatively long periods under acting executive directors. There are various explanations for this. One involved competing views about the role of the executive director. One view was that the executive director should first and foremost be an ESL professional. The other view was that the executive director should be a professional manager with entrepreneurial experience. Another explanation was that the line of demarcation between governance and management was not clearly drawn. Yet another explanation was the operational involvement of the chairs of board committees which confused the chain of command within the staff. Finally, there was the view that the CCLB is chronically under-funded in relation to the demands on its time and services, and, in consequence, that no executive director could ever succeed in the absence of clear strategic priorities.

            The CCLB's goals and objectives, which were formally stated and of which the board was the custodian, also had a bearing on the board's relationship and on the performance of the CCLB at large. The issue, however, was not necessarily a point of disagreement between governors and managers. It seemed more to be a matter of disagreement among governors. The board had spent a lot of time on a new statement of objectives, but the CCLB staff didn't see them as being significantly different from the previous objectives. In operational terms, this left a lot to the interpretation of management in setting priorities.

            Thus there are some conclusions that we can already draw about the CCLB. Its board does in several respects fit the current descriptions of working boards and line boards. The board is involved in several aspects of management and administration. Some of that involvement is voluntary in the sense that no compensation is provided for it. The CCLB's professional, paid staff is small, especially in relation to the size of the board. There are three times more directors than paid staff. Moreover, the board has more committees than the CCLB has professional staff.

This observation may inform the measure of "small" in our current knowledge of working boards. The CCLB might appear to be larger than the sorts of organisations in which Carver would expect to find working boards. It might even be a bit larger than the size that Murray would expect. Perhaps the key measure is not the absolute scale of the organisation but instead the relative scale of governance to management. In the case of the CCLB, that ratio is close to 3:1.

It may also be that the CCLB is in some fundamental respects a lot like a consortium (Lang, 2002). Many members of the board represent agencies and organisations that benefit from the CCLB's services and also fund the CCLB. Perhaps working boards are more characteristic of organisations that are like consortia than of organisations that are of a certain size.

Finally, we can also conclude that the CCLB's board had not yet moved beyond the "supermanaging" phase even though the CCLB would otherwise be regarded as a mature and permanent institution. There are a couple of explanations of how this could be so. First, the evolution of a board may be more the result of the performance of management than of the performance of the board itself. Second, a board may not be able to move beyond the "supermanaging" phase until it has reached a consensus about goals, objectives, and priorities.

Conducting the Evaluation

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he evaluation of the CCLB was extensive. Every member of the CCLB staff was interviewed in person. With one exception, all previous members of the CCLB staff were interviewed. Nine members of the board were interviewed, as were seven consultants who had worked at various times under contract to the CCLB. Over 200 ESL program administrators, instructors, and assessors across Canada were surveyed electronically. A focus group meeting was conducted in Toronto to solicit the views of representatives of ESL teacher-training programs.

            The evaluation was not solely about governance and accountability. The other major purpose of the evaluation was to appraise the CCLB's performance in program development. Only the results of the evaluation of governance and accountability serve as the basis for the case study.

 

  Results of the Case Study

 

Results of Interviews of Board Members

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ost of the members of the CCLB board who were interviewed said that they were selected for membership because it was integral to their usual job.  Typically, they held government posts in which they were responsible for issues related to immigrant settlement and language. Of particular significance, they were responsible for the co-ordination of funding and the implementation of policy in the area of language assessment. In other words, they had a lot to do with the allocation of funding to the CCLB.

  In contrast, three of the interviewees represented professional associations related to ESL and immigrant settlement either nationally or regionally. They hold elected positions in these associations as well as teaching or administrative positions in adult education. In other words, they were stakeholders who were users of the CCLB's services.

Given their positions with provincial or national governments or large professional associations, most of the interviewees saw their primary role as CCLB board members as helping to align funding with the competing claims on the CCLB's resources. Those claims, as the board saw them, came mainly from the provincial and federal governments.  This role involved representing their jurisdictions.  Other interviewees indicated that they felt they were chosen for membership on the board for reasons of inclusion, for example to represent minority interests that might be of no direct concern to provincial or federal governments.

Questions about conflicts of interest follow naturally from the composition of the CCLB board. When asked if they had perceived or experienced any conflicts of interest between their fiduciary responsibilities to the CCLB and their responsibilities to their employers. Two-thirds of the responding directors said that they had no conflicts but several of them also said that they could imagine how conflicts could arise.  The other respondents said that they had encountered conflicts in three areas, which were also the areas in which the other responding directors indicated conflicts might arise:

·        decisions about funding in terms of benefits for their province or region versus those for the country or national programs as a whole

·        the amount of time required to serve on the CCLB Board, which often drew them away from their usual work responsibilities

·        balances among the interests of professional associations or regional interest groups with those of government policies or programs

On the one hand, these reports could be regarded as matters of individual behaviour among the board's membership. On the other hand, the situation could be a problem that arose from the structure of the CCLB and its board. It could explain some of the board's tendency towards performing as a working board. The latter possibility was recognised by some of the members of the board who were interviewed and who thought that board members should be formally evaluated in terms of their performance as volunteer staff. In other words, what some members of the board saw as real or potential conflicts of interest other members saw as a normal and expected part of their duties.

Interviews with Current and Former CCLB Staff

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ach of the CCLB staff members who were interviewed confirmed that the CCLB relied on volunteer staff, including members of the board to fulfil its mission. Several members of the permanent staff also confirmed that they regarded some members of the board  ¾  specifically the chairs of some of the board’s standing committees ¾ as unpaid staff and in some respects as their supervisors. When questioned further about this arrangement, they, on the one hand, thought that for an organisation with limited financial resources, this might be a fortuitous benefit. On the other hand, they also acknowledged that this could compromise governance and often did confuse the organisational chain of command.

 

Familiarity with and perception of the objectives of the CCLB

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ll of the CCLB staff were familiar with the objectives. They were also aware that the CCLB board had recently reviewed the objectives and made revisions in some of them.  To the staff these revisions seemed essentially cosmetic, and oriented more to the clients of the CCLB than to the staff of the CCLB. The objectives, either old or new, did not seem to make any significant differences to the day to day work of the staff. The staff believed that although the new objectives did not represent a substantive change in the work of the CCLB, they were more definitive and less open to interpretation than the old objectives.

            Some staff members doubted that the CCLB board took the objectives seriously since there seemed to be a disposition on the part of the board to interpret the objectives very liberally depending on circumstance.  The board, however, regarded their then recent revision of objectives as a major achievement in which they had invested considerable effort. The issue seemed not to be differing views of what the CCLB's objectives should be or what they meant. The issue was about the extent to which the board took the objectives seriously.

            Most CCLB staff did not see a strong day-to-day connection between their specific jobs and the objectives of the CCLB. Instead the staff saw stronger connections between their work and the various individual projects that the CCLB undertakes on a contractual basis. Each project is, in effect, a client or stakeholder. The practical implication of this outlook is that the key expression of the CCLB’s objectives is in its choice of projects instead of in its specific work assignments to staff. Significantly and perhaps surprisingly, this was an area in which the board had no standing committee, but it was an area in which board members were frequently involved in supervisory and voluntary roles.

 What conclusions might we draw from this about working boards?  One is that under working board conditions the managerial involvement of board members seems to serve as an alternative to effective statements of objectives. To reverse an old adage, the CCLB board, as a working board, seems to have operated on a "do as I do, not as I say" basis. This indicates the preference for action instead of delegation which Chait and Taylor (1989) hypothesised..

Another causal observation might be that governing boards tend towards the working board model in areas of activity that are unstable and anomalous, as would have been the case of the CCLB's special project contracts and entrepreneurial initiatives. This aligns with one of Chait and Taylor's explanations of why not-for-profit boards sometimes become wastefully involved in operational activities (Chait and Taylor, 1989).

 

"To establish clear and appropriate roles and responsibilities for the board, councils, committees, and staff"

 

            This was an objective that the CCLB had for some time known was problematic. In 1999 the CCLB board had convened a special session to discuss it with the assistance of a consultant. Despite that awareness and effort the lines of demarcation between the three CCLB estates still were not as clear and appropriate as they might have been. Here are some particular examples of uncertainty and lack of clarity:

·        The CCLB staff sometimes regarded the chairs of the board’s standing committees as unpaid staff and supervisors in their particular areas of expertise.

·         

This may be seen as a function of the erratic and limited nature of the CCLB’s funding. Expertise that the CCLB could afford to have on its staff it could obtain from the volunteer work of the board membership. This might be a fortuitous benefit of a working board but it was not ideal for the CCLB because it also confused the governance and accountability roles of the Board, and blurred the normal chain of command within the CCLB staff.

 

·        The Executive Director was frequently expected to interpret the board’s objectives and decisions.

 

            There was much criticism of a former CCLB Executive Director in regard to this practice.  But the reliability and effectiveness of the interpretation is not the main point with regard to the clarity and appropriateness of roles and responsibilities. The main point is whether or not the Executive Director should have been called on to play an interpretative role at all.  This could be seen as a failing that could befall any board in any form. But it also could be a chronic problem of working boards in that the involvement of board members in the day-to-day affairs of the organisation invited "fine tuning" and interpretation because the board as a governing board never really had to "sign off" on some decisions, leaving them instead to the chief executive's interpretation.

 

"To develop and implement clear measures of accountability and performance of the board, committees, and staff"

 

Although the intersection of management and governance was blurry and somewhat confused, there was a relatively high degree of contact between the CCLB board and the CCLB staff. There was an especially a high degree of contact between the CCLB staff and some of the board committees. All this is what one would expect of a working board. The question, however, is whether or not that is the sort of contact that engenders high levels of accountability and performance.

Normally, staff should be accountable only to their supervisors, and the chief executive officer should be accountable only to the board. That is a modus operandi that most boards understand and enforce. The experience of the CCLB suggests, however, that working boards might not have that understanding or, if they do, are incapable of acting on it. To the extent that the "working" members of working boards direct staff they may be seen as providing sufficient accountability and first-hand measurement of performance. But, as some members of the CCLB board indicated in interviews, there was no systematic means of measuring the performance of board members who were also performing as supervisors and staff. This is a problem that appears to be unique to working boards.

 

"To establish clear lines of communications between stakeholders, staff, and board"

 

Communication was central to the CCLB’s existence.  Indeed, it was so central, and also so multidirectional, that there were no simple answers to such questions as who needs to communicate what to whom and for which reasons? For instance, members of the board saw as a fundamental role an obligation to communicate the interests of their province or region to the CCLB and in turn to communicate the CCLB's interests back to their province or region.

 But as important as communication was to the CCLB, communication among the board’s membership seemed to be episodic and sometimes incomplete. The CCLB board did not meet frequently and, when it did, the documentation of the meetings was limited. The result was that members who did not attend meetings were poorly informed. A number of persons who were interviewed reported that the board’s deliberations often did not convey finality, and that issues that were putatively resolved at one meeting were reopened at later meetings, with different members present, as if the previous meeting had never taken place.

            This may or may not be a characteristic of working boards. The CCLB board was geographically highly dispersed. Several members, in the interviews, reported conflicts between balancing their jobs with their service on the board. The combined result was erratic attendance. That could happen to any board in any form. But in the case of the CCLB as a working board, the board members who performed also as managers and staff -- that is, the board members who "worked" -- were also those who most frequently attended meetings of the board and who most frequently were in communication with one another. The de facto result for much of the time was two boards.  Moreover, the communication between the two was irregular, mainly of course because the arrangement itself was irregular.

            A lesson to be drawn is that for a board with dispersed membership and members who have only limited time to devote to the board the working group model may exacerbate communication and decision-making problems.  In terms of board typologies, this aspect of the working board identifies it with Murray and Bradshaw’s "fractionalized" board.

 

"To represent stakeholders and ensure regional input"

 

            This objective for the CCLB depended on one’s understanding of “stakeholder.” This was more than a semantic question. Those agencies that provided funding were represented well on the CCLB’s board, as were major professional associations, like  TESL Canada.  But others who had a stake in the CCLB were not represented as well, although they may have been consulted or received information from time to time or for particular projects. So, some observers of the CCLB cited over-representation while others cited under-representation on its board. The balance is very delicate

Taken in literal terms, this objective may have been unattainable without introducing so much complexity to the CCLB’s affairs as to disable its functionality. Canada has two official languages and Quebec has regularly had observers on the CCLB Board., Immigrant and refugee settlement is distributed unevenly across the country.  Educational systems operate independently in each province.  The level of diversity is huge. This is why it is essential to understand that there is a difference between lines of communication and communication per se. It explains, on the one hand, why there were so many lines of communication within the CCLB, and, on the other hand, why the number was perhaps too many for the purposes of representation.

This is an area in which the CCLB's tendency towards behaving like a working board appeared to be counter-productive. First, because communication was one of the staff areas in which board members "worked" there was the danger that communication  was confused with representation. This might be a reason for Carver's assertions that line boards should never be confused with governing boards and that working boards should never forget that they must also be governing boards. Murray, on the other hand, argued categorically that working boards should never be put in a position of having to play both roles.

The lesson here is that because representation is so complex and delicate in organisations like the CCLB that, for the purposes of governance, representation should be emphasised over communication. The working board model is not congenial to that emphasis because it tends to disperse rather than consolidate participation in governance.

 

"To provide services and products in a timely manner"

Most of the individuals and agencies who were consulted about the performance of the CCLB expressed at least some disappointment about the CCLB's provision of services and products.  An obvious and particularly unfortunate fact of life for the CCLB was the erratic and unpredictable nature of its funding. It is not an overstatement to say that the expectations that were held for the CCLB far outstripped its financial wherewithal.

            That being the case, it was not surprising that the CCLB was drawn to the working board model. Of all the permutations and combinations that are possible in the structure of governance, the working board or line board is the only one that adds to an organisation's capacity to produce and deliver. The more dire financial circumstances become, the more attractive the working board model becomes.

            But is the working board a solution or a diversion?  The problem may go beyond the adequacy of funding. The unpredictable nature of the CCLB’s funding base made priority-setting both very difficult and essential. Virtually no public organisation, no matter how virtuous, can assume that it will have all the resources that it believes it needs. To cope with this reality, organisations like the CCLB have to make hard choices   about the allocation of the scarce resources that are available to them. To make such choices, small, under-funded organisations should concentrate their resources on a few high priority initiatives instead of spreading them thinly to give the appearance--really the illusion--of being all things to all people. The working board and the line board, if it is really different, can be part of that illusion. First, there is no reliable way by which the typical small, not-for-profit organisation can accurately value the volunteer work that members of working boards provide. Second, because the working board "workers" are not really accountable to management, there is no reliable means of ensuring that they direct their efforts either in the most efficient way or to organisational priorities. In fact, volunteer workers may be motivated to volunteer in order to favour the interests that they represent (Chait and Taylor, 1989). Thus, instead of drawing hard-pressed organisations in the direction of taking the setting of priorities seriously, the working board model can mislead them into thinking that priorities are not urgent.

"To review mandate, goals and objectives and systematically undertake planning based on them"

 

Successful planning depends on a cycle or “loop” that comprises mandate, goals, objectives, plans, budgets, and evaluation in a sequential series. This loop should not be disassembled, which is why goals, objectives and planning are combined in a single test of performance.

            The locus of responsibility for planning is problematic. There was recognition, particularly on the part of the CCLB staff, that plans were needed, especially plans that either set priorities or could be used to set priorities. This is a fact of life for small organisations for which there are high expectations and for which there is limited financial support -- in other words, organisations with which the working model is typically associated.

There are two ways of formulating plans. One is to assign the responsibility to the governing board, and then regard the plan as an instruction to management. The other is to regard planning as a management activity, and to have the plans brought forward to the board for review and approval. The first approach is more useful when the greatest need of the organisation is to set priorities. This approach usually leads to unity and discipline within the board. The latter approach is valuable when there is a need to match resources to tasks, and to schedule work that has already been called for by the board. A working board, virtually by definition, is prone to the second approach.

It is of course moot where the centre of gravity between these two approaches should rest in each organisation. In the case of the CCLB, however, two things were evident. First, the staff felt that they were not receiving sufficient direction from the board in regard to priorities. Second, the extensive review that the board had recently undertaken of the CCLB's  mandate, goals, and objectives had seemed insignificant to the staff. In other words it did little to "close the loop." One reason for that failure was that some board members who were de facto "workers" as well as governors occupied different locations in the loop.

An area in which the management and staff felt particularly at sea was the desirability of entrepreneurial self-funding for some of the CCLB's programs and services. The provision of some CCLB programs and services had been predicated on their generating enough income to offset their costs. It was not entirely clear that the CCLB board had actually endorsed self-funding, but it had been discussed and some of its contractual projects were nominally operated on that basis.

Self-funding is risky business in the not-for-profit sector. An organisation that decides to move ahead with self-funding should keep two important factors in mind. The first is that self-funding requires relatively sophisticated financial control and information systems to ensure that what is supposed to be self-funded really is, and to ensure that self-funded projects do not expose the organisation to unintended liabilities. The second is that self-funding can have high infrastructure costs that will be more onerous to a small organisation than to a large one. In other words, self-funding should not be equated with self-management. If anything, entrepreneurial self-funding will place more, not fewer, demands on governing boards.

In response to those demands a board might be drawn to the working board or line board model as a means of delegating responsibility for a particular part of the organisation's activities. That might make some sense if the board were prepared to operate some programs or services on a strictly "sink or swim" basis, and were willing and able to accept any financial liabilities that arise from business failure. But those are exactly the sort of risks that small, poorly funded, not-for-profit organisations cannot afford to take. Therefore, when risks of this magnitude are taken, the deployment of the working board model could dangerously increase the risk by driving management and governance further apart when they should be drawn closer together.

This same observation also helps to clarify the similarities and differences between line boards and working boards. When, under the working board model management becomes detached from governance, there is no functional or generic difference between a line board and a working board. This perhaps explains why Murray did not draw the distinction that Carver did between the two types of board; Murray argued that working boards normally should not be governing boards. Carver, on the other hand, said that working boards have also to be governing boards, which logically, if not persuasively, means that a governing board that is detached from governance must be called something else, hence the working board. In the case of the CCLB, for those board members who were "workers" as well as governors, management and governance had become so separated that, while the board thought that it had clarified and substantially modified the organisation's mandate, goals, and objectives, the staff thought otherwise. For that misunderstanding to have happened, the "worker" board members must not have been sending signals to the board about the way in which management perceived the revised mandate, goals, and objectives. This implies a major flaw in the working board model: it is very difficult to wear a "governance hat" and a "working hat" at the same time. 

 

Lessons Learned

To bring this study to a conclusion let is first return to the beginning, and in particular to the different views expressed by Carver and Murray about what working boards are. Whatever other conclusions might be drawn from the experience of the Canadian Centre for Language Benchmarks, one is certain: the CCLB had a working board, whether one defines a working board as Carver did or as Murray did.

            The first lesson is that Murray's definition of the working board and his description of how it, in theory, behaves is closer to actual experience than is Carver's definition. In particular, Carver's assertion that working board's are also governing boards may be correct in principle but very difficult to realise in practice. As far as governance and accountability are concerned, governing boards and working boards appear to function in opposing directions. That might have been Murray's intuitive assumption in taking the opposite view that governing boards should not be confused with working boards. The case study of the CCLB suggests that that is true. It also confirms Murray's implicit assumption that, once governance is removed, the working board and the line board are one and the same.

But there is another aspect of the case study that does not confirm Murray's definition. Murray said that if governing boards were confused with working boards, the result would be  "meddling boards." That possibility may indeed exist, but in the case of the CCLB, its governing board cum working board was not seen as a meddler. The board  did not perform as well as it should have with regard to certain objectives, but neither the governors nor the managers thought that the arrangement was objectionable. In their view the arrangement was, at worst, a necessary evil, and, at best, fortuitous.

Carver took great care with terminology. His preference was to call a working board a working group board. The idea seemed to be that governing boards went into the working board or working group mode for a limited time for a particular and specified purpose. All the members of the board who became “workers” were involved in the particular project, whatever it was. When that purpose was fulfilled, the board would revert to some other mode. In those circumstances, the distinction between working board and working group might make sense. Carver does not offer an example of a working group by his definition but a reasonable guess is a board that relies on some of its members to support a major gifts find-raising campaign.

However, if the example of the CCLB is typical, the intersection of management and governance under the working board model is broader and less categorical. Board members “worked” in a variety of management and staff areas, and were not organised to form a functionally identifiable group separate from other staff. Again if the CCLB is typical, the several management forms identified by Paquet, Ralston, and Cardinal -- working boards, administrative boards, administrative/management boards, management/policy boards and policy boards -- are not in practice as different as they seem to be in theory. Everyone except the policy board is a variant of the working board. They vary only in terms of the type of work that they do, and they were all represented in the example of the actual operation of the CCLB.

           

I

n summary form here are some other lessons learned from the study:

·        Working boards have a tendency away from lay membership and towards expert and professional membership, and in turn those sorts of membership draw the board into operational activities..

 

·        Constituency representation is unusually important and inherent to working boards because they depend on their constituents for operational support.

 

·        Working boards are prone to micro-management and to confusing the boundaries between governance and management, and even between management and administration.

 

·        Organisational size might not define working boards as accurately as the relative scale of governance to management does.

 

·        Working boards are more characteristic of organisations that are like consortia than of organisations that are of a certain size.

 

·        Under working board conditions the managerial involvement of board members may be construed as an alternative to formal statements of objectives, thus undermining the statements.

 

·        Governing boards tend towards the working board model in areas of activity that are unstable and anomalous.

 

·        The involvement of board members in the day-to-day affairs of an organisation invite "fine tuning" and reinterpretation of board objectives and directives because the board, acting in its governing role, never really has to "sign off" on some decisions.

 

·        There are no systematic means of measuring the performance of board members who are also performing as "working" supervisors and staff.

 

·        The working board model tends to disperse rather than consolidate participation in governance.

 

·        For boards with highly dispersed memberships and members who have only limited time to devote to the board the working board model may exacerbate communication and decision-making problems.

 

·        Volunteer workers may be motivated to volunteer in order to favour the interests that they represent. Thus, instead of drawing hard-pressed organisations in the direction of taking the setting of priorities seriously, the working board model can mislead them into thinking that priorities are not urgent.

 

·        In terms of planning, the working board is especially valuable in matching resources to tasks, and to scheduling work that has already been called for by the board.

 

·        Working boards are particularly ill-equipped to oversee entrepreneurial and "self-funding" initiatives, yet these are areas of activity in which not-for-profit boards tend to try to manage.


 

 

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Higher Education Perspectives. ISSN: 1710-1530