LESSON 31 OF 40 – Watch Out for Boards Asleep at the Wheel
Golden opportunities are missed when a board’s eyes are wide shut.
THE BIG IDEA FROM THE BOOK: “The drone of routine board meetings often creates unmemorable results,” writes Dan Busby in this first-person account describing a road trip when he fell asleep at the wheel. Likewise, he adds, “boards can become drowsy and listless by slipping into a routine of grinding through ‘one more meeting.’” He notes four practices that boards must avoid.
Boards most often fall asleep at the wheel when they:
• “Misread the landscape. Acute discernment is necessary to sense what may be coming just around the corner.”
• “Can’t see the forest for the trees. They have checked all the boxes (the trees) and missed the big picture (the forest).”
• “Become mired in the weeds. The classic board that is asleep at the wheel is the board that spends too much of its time on operational matters.”
MY COLOR COMMENTARY:
First, let’s be clear. I’m not suggesting that the board at our church has become drowsy or listless! However, Dan Busby’s cautionary warning is attention-getting! He notes that churches can “veer off course” in four specific ways:
#1. Improper use of designated (the technical term is “restricted”) gifts. In conversations with other CFOs, I find that many church boards are inadequately educated about expending designated gifts for purposes inconsistent with a giver’s designation.
#2. Disappearing reserves. This sometimes happens when boards routinely approve budgets and financial reports, yet expend money on capital items without having a capital budget.
#3. Approving related-party transactions that are inappropriate. (See Lesson 28 for the helpful chart on potential conflicts of interest—and the “yes” or “no” decision tree (with three paths) on the question, “Does the proposed transaction pass the related-party transaction test?”
#4. Leadership failure. If your church board experiences frequent turnover of board members (not a good thing!), the board may miss or overlook “the continuing chaos created by the senior pastor.” In this case, a troubling leadership style or behavior may never be appropriately addressed.
What should your board do? “Through the commitment, dedication, and a focus on the big picture, boards can fight off mental drowsiness.”
THIS WEEK’S QUOTES & COMMENTARY BY CATHY BARRETT:
• As a board, read this lesson together and review the four examples where your board might be asleep at the wheel.
• Discuss “related-party” transactions at your next board meeting and view the short video included in the ECFA Governance Toolbox Series No. 3: Conflicts of Interest. (Note: Cathy Barrett portrays a “typical” board member in this video.)
• Visit the ECFA Knowledge Center and read and share the short chapter, Lesson 31, “Watch Out for Boards Asleep at the Wheel.”
• Inspire your board members to enrich their governance competencies at the ECFA Excellence in Governance Forums (eight cities, Fall 2019).
NEXT WEDNESDAY: On Sept. 25, 2019, watch for the commentary by Don Walter on Lesson 32, “Loose Lips Sink the Boardroom Ship. What happens in the boardroom must stay in the boardroom.” (Note: Don Walter wrote this blog several months before his homegoing.)