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A NEW COVENANT
Governance as leadership carries an implied bargain: more macrogovernance in exchange for less micromanagement. For this arrangement to work, neither the board nor management can accept the “quid” but withhold the “quo.” In other words, the board cannot move toward to the top of the generative curve, where issues are framed, and at the same time remain as active at the bottom of the curve where strategic plans and technical tasks are executed. Likewise, executives cannot “evict” the board from the zone of micromanagement without some other place for the trustees to go, namely the realm of generative governance.
This new covenant asks a great deal of both parties. At first, trustees may be energized by the possibility that the dreary
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work of conventional governance will be replaced by countless opportunities to explore, intuit, improvise, dissent, and even engage in “playful” discussions. But the real picture is more complex. With this new freedom to be generative comes an obligation to be equal to the challenge.
Governance as leadership is not a license for boards to govern anywhere, any time, any way.To the contrary, this new approach requires more self-discipline and collective responsibility of board members than traditional governance does. If, as most trustees fervently believe, leadership matters immensely then, by definition, governance as leadership matters immensely, too. Therefore, board members need to come prepared, rise to the occasion, work diligently as a group, and expect to be intellectually taxed by complex and consequential questions. Most trustees will recognize these specifications as the price one pays to do meaningful work, and as the very same expectations that board members have of colleagues in their own work environment.
The challenges that governance as leadership pose for executives are more about sharing, not assuming, greater responsibility. Whether in response to the board’s signals, personal preference, or socialization by peers, executives are often cast as lonely heroes who have nearly all the answers nearly all the time. In the minds of many CEOs and board members, for a leader to admit to confusion or uncertainty—or, worse, to have no idea what to do—conveys weakness or incompetence. As a result, executives frequently do alone generative work that is better done with the board.
With governance as leadership, the capacity to share this work with the board ranks among the executive’s major contribu-tions.The CEO exposes, and even more to the point, immerses the board in complex and critical matters as issues arise and
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unfold. In addition, the CEO describes, rather than suppresses, dimly perceived concerns that incite an instinctive wariness. In the generative discussions that follow, the CEO (and senior staff) are secure enough to be open to argument and susceptible to influence without concern for who “wins” or “loses” the debate or who “wins” or “loses” power. The quality and value of the conversation are the litmus tests that count.
The CEO still stands as the leader of the organization and still provides leadership for the board. However, that leadership now engages and challenges the board, whereas CEOs may once have been inclined to marginalize or shield the board.Will there be, now and then, untidiness and moments when the CEO feels some loss of control? Certainly. But just as other professionals— whether athletes, professors, lawyers, or actors—perform better when surrounded by talented peers, executives who seriously engage boards and boards that demand serious engagement will govern more effectively.The less an organization depends on a lonely and heroic leader, the more leadership and the better governance the organization will have.
coming fuLL circLe
A little bit of governance as leadership is worse than none at all. Yet, for different reasons, trustees and executives may both prefer governance-as-leadership “lite.” Some trustees may relish occasions to share their generative genius with the CEO and staff for a few hours every time the board meets. But generative work, without strategic or fiduciary work, can lapse all too quickly into self-absorbed navel-gazing.Work in all three modes, as we have stressed from the outset, keeps generative work grounded in organizational realities.
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Executives, too, might be tempted to go halfway with governance as leadership. Some will incline to engage in generative work but keep the board at bay.There might be a little generative discussion from time to time about how management frames issues, but there would be no robust exchanges and no searches for other frames. Management might provide some glimpses into the organization’s culture, core competencies, and competitive advantage, but there would be few opportunities for the board, as a whole, to do an “independent study” at the boundaries of the organization. Skillful and persistent CEOs can dilute (or even thwart) governance as leadership, but as we cautioned in the previous chapter, to do so courts a significant risk. Halfway measures may authorize trustees to frame the organization’s challenges and opportunities, but without adequate knowledge of the organization’s values, beliefs, assumptions, and traditions. As a result, executives may get plenty of frames but very little framing. Far better, we believe, for executives to have partial control of a complete perspective than complete control of a partial perspective.