A healthy board is vital to a growing organization.
Establishing a board for your enterprise is both energizing and scary. It's energizing because a healthy board brings fresh ideas, expertise, and new connections. It's scary because boards represent greater structure, accountability, and the relinquishing of control. Good governance provides the guardrails that protect the enterprise long-term.
John Carver spent a career telling boards to define ends and leave means alone. A healthy board outlines the vision: what the enterprise must accomplish, for whom, and at what cost. It states the limits and what management may not do regardless of the results. Everything between vision and limits belongs to whoever runs the business. Anything not expressly forbidden is allowed.
Every governance model has predictable failure points. Naming them in advance helps avoid conflict:
- The board that reviews everything and stifles the team.
- The leader who will not let go and uses the board to retain the position.
- The document nobody uses so that what is outlined on paper is nonexistent.
- Blurring the lines between roles so that clear boundaries are not honored.
A healthy enterprise communicates clearly what decisions belong to the management team and what decisions belong to the board. Each group knows without questioning which decisions are theirs and which are not. They have agreed upon timeframes and trigger points for implementing any changes. They communicate through channels that are clear and consistent. Every enterprise has a governance model. The goal is to have yours be an energizing one.
How mobilized is your board?
Josh Eby is a founding partner of Aven Advisors. Earlier field notes are collected here.