Does Your Governance Structure Need a Reboot?
A new report finds that association boards struggle with strategy. Making big changes can start with a tweak to the agenda.
The COVID-19 pandemic unquestionably made associations more agile: In 2020 and 2021, they quickly learned how to establish virtual meetings and hybrid offices, ramped up their efforts around workplace wellness and social justice, and generally did things faster than they were used to. But how much of that effort was strategic? How many board discussions during that time were framed around putting that agility to broader, longer-reaching purposes?
That question is at the core of a new report from McKinley Advisors, Next-Level Governance: Leading With Strategic Agility. Based on a survey of trade and individual-membership association CEOs conducted earlier this year, the report finds that associations are still struggling to get their boards to think strategically. Perhaps more important, they’re not creating a governance pipeline that’s populated with leaders who have a strategic mindset.
For instance, the survey finds that while a large proportion of organizations are talking about DEI (78 percent), only slightly more than half (53 percent) say they have a comprehensive DEI strategy. There’s similar softness when it comes to committees: Only 28 percent of boards say they set desired strategic outcomes for their committees. As the report puts it: “Without such oversight, committees and task forces can take on a life of their own with yearly goals and activities not aligned with organizational strategy.”
Jon Hockman, chief practice officer at McKinley Advisors, says those figures betray a failure to build a strategic mindset into their governance structure. “All too often, associations populate governance with who we know, who’s familiar, who we’re comfortable with, as opposed to saying, ‘How do we work with the intent to find people who have a very strong innovation mindset, very strong strategic leadership orientations?’” he said. “You need to name the things that are really important to your organization and then proactively work to find folks who bring that to the table, not just send out a call for volunteers and accept whoever raises their hand.”
The McKinley report includes a host of recommendations about how to start recruiting for mindset. The most popular ones involve casual relationship-building: Conversations with industry leaders, close communication with members of the nominating committee. But there are more nuts-and-bolts suggestions as well: formal assessments of board competencies and gap analyses; nomination guidelines that emphasize strategic needs; application processes that are designed to surface strategic thinking; establishing a leadership-development committee that prioritizes improving the pipeline.
The approach that works best will differ from association to association. “Each organization needs to look at its particular governance model and say, ‘What do we need to do to drive greater strategic agility?” Hockman said. “It’s not just the board. The data suggest you really need to look at mindset around strategic leadership, innovation, and understanding the profession you represent.”
If that sounds intimidating, Hockman suggests doing some simple things before pursuing a governance overhaul. “Start small: Make a change to the agenda,” he said. “How we design agendas still matters. Are we sitting and listening to committee reports, or are we having a generative conversation around the future of the workforce in our industry? That’s a different way to spend leaders’ time.”