Across all the sectors that we work in at the Governance Evaluator, one of the most popular questions we are being asked by directors is ‘how do I, as a director, know when I’m to be strategic and when is it ok to be operational in my questions’. Conversely, CEOs are asking ‘how do we help our directors not to be so operational?’
There is much research and education to assist us to discover the answers. However, most of us have done our governance training and understand quite well the theory behind the difference between having a governance focus and an operational focus in a board meeting. We also all know that when you are a director in a real-life board meeting and “the rubber really hits the road” all the theory goes out the window. We have all been guilty of getting this wrong.
What are some of the reasons behind this being so?
Even though there is a difference between some of the requirements at a governance level in the different sectors in which we operate today, including Health, Aged Care, Education, Sports, Local Government, Water Boards, Waste Recovery and Resources, Catchment Authorities, NFP and Community, understanding how and when to be strategic and when to be operational is a challenge across them all.
Governance Evaluator, therefore, thought it would be very helpful to draw on our learnings in this area from the Health Sector and share them with everyone.
By the end of 2016, a total of 66 health organisations had completed their evaluation. A key area of early development for these boards was in relation to directors understanding their governance roles and responsibilities. We immediately thought that this meant more governance training for the health directors BUT on deeper investigation, this was not absolutely so. Through our customer care and independent convening interactions with our customers, we identified two areas of need. One was for governance training for roles and responsibilities for a few directors, as originally thought. The second was an even more pressing issue. It related to directors needing to have a better understanding of the Health business they were governing. In other words, directors, whether they were new or not on the board, didn’t really understand the kinds of services their health service provided, the associated risks, and ultimately what should or shouldn’t be reported and discussed at the board table.
Also, at the end of 2016 through to mid-2017, there was a sector-wide focus on the importance of boards understanding how to govern clinical care and ensuring their health organisations were providing safe quality health services. This was driven by several factors being; unnecessary deaths and poor quality and safety in some health services resulting from poor clinical governance systems, processes and behaviours, the Stephen Duckett Review: Targeting Zero, 2017 and new Clinical Governance Frameworks implemented by Safer Care Victoria and the Australian Safety and Quality Commission. This has made directors anxious about what clinical risks they should be overseeing and discussing at the board table and, once identified, how to be assured that these are being managed
Governance Evaluator has also observed from data collected from 40 health boards completing the new Clinical Governance Module since its introduced in late 2017, that there is a correlation between a director’s confidence in understanding the organisations consumer’s needs, services provided and top associated risks, and knowing the right questions to ask to be assured. This is having a profound effect on a director’s ability to successfully manage knowing when to be strategic or operational in their questions and discussions with their fellow directors, CEO and Executives. In other words, there definitely are times when directors need to be operational in their questions, discussions and requests. This is when they are related to the organisations services, associated top risks and being assured.
Governance Evaluator has also learned from this data that there were particular governance activities and attributes that impact on the director’s ability to gain this confidence, irrespective of which sector they are in.
Enter your details below to download Governance Evaluator’s 8 tips for helping director know when to soar and when to dive.