Managing the paradoxes of governance

All charity “boards” face common paradoxes. Students’ Unions- political and organisational, democratic and managed, are no exception. In this piece we look at some of the governance paradoxes often found in the wider voluntary and charitable sector and consider how they might apply to Students’ Unions.

  1. Who governs -the tension between representative and professional boards

But there is, and will continue to be, a tension between the manage¬ment driven and output related approach which is central to many recent changes, and the need for organisations providing public services to involve, respond to, and reflect the concerns of the communities which they serve.

(Lord Nolan, 1996)

In many public and non-profit organisations there has been a strong tradi¬tion that those who govern them and sit on their board should represent the communities the organisation serves. Two different mechanisms have been used to achieve this end: direct elections of board members from a defined constituency, or through giving key stakeholders the right to appoint members to the board.

Over the past two decades, due in part to changes in public policy, there has been a shift in emphasis towards a more business-like or managerial approach to governance with its stress on efficiency and effectiveness, and the compe¬tencies that board members need to fulfill their role effectively. This high¬lights an important tension: should board members be ‘chosen’ because of their competence and expertise, or as representatives of particular groups?

Students’ Unions have always been clear on this- all elected. As “mutual”, democratic member organisations, the choice has always been a “no brainer”. But with the rest of the world moving as decribed, can we just move along ignoring the fact that that managerialism is being used as a way of proving that money can legitimately be handed over when students’ unions’ finances are under threat?

This paradox has been most apparent at a policy level with regard to the governance of quangos. The increasing use of non-elected bodies such as quangos, non-profits and the private sector to deliver public services, and the decline in democratic account¬ability are all things that NUS worries about when considering other bodies.

Implicit in the public reforms of the various Conservative governments during the 1980s and early 1990s was the assumption that democratic forms of organisational governance were inherently ineffective and inefficient. As a result there was a move to appointed boards and an explicit attempt to get more business people onto the boards of a range of quangos.

Since the late 1990s, the pendulum has swung back, at least a little way, as calls for more open and accountable governing bodies became ever more strident. But serious doubts remain about the ability of many quango boards to adequately ensure local demo¬cratic accountability.

How, then, can the paradox between effectiveness and accountability, and between expert and representative boards better be managed? All sorts of people are calling for greater democratic accountability, it is more challenging to know how this can best be achieved.

Some suggest that one step might be to reframe the problem in terms of board legitimacy. They argue that board legitimacy is a product of both board effectiveness and democratic accountability. They suggest that a board that fails on either of these fronts is likely to be perceived as lacking legitimacy.

Students’ Unions in 2005 have some problems with both accountability and effectiveness. Can training for “Trustees” be standardized or improved? What staffing support is given to committees? And are we right to assume for example that the whole exec or the whole of the sabb team should automatically be Trustees (when many would rather stick to their portfolio)

Of course “boards” are not the only way, and may often not be the best way, of trying to achieve greater user involvement. Students’ Unions ought to have other ways for their “users” or “members” to get involved, and claim some power.

And “boards” are not the only way of achieving greater democratic accountability. Greater transparency and openness, external audit and evaluation, the development of new forums for consul¬tation, improving the responsiveness of services to members needs can all increase accountability and don’t have to replace or denigrate the council, the General Meeting or the committee.

The other side of the coin is that much can be done to try to ensure that ‘elected’ boards are effective. There has been a large increase in the availability of training, support and advice for board members in public and non-profit organisations, although there are large variations between different sectors, fields and areas. In some fields, such as educa¬tion, external training is widely available to new board members. In others, such as large parts of the voluntary sector, provision is much more patchy. Certainly NUS is examining how it can best support a national standard for the training of Trustees that takes into account the patchwork of existing standards, sizes, perceptions and provision.

Students’ unions do, though, have various options to help improve effectiveness. For example some traditional women’s organisations with large, representative governance structures have streamlined and reduced the size of their boards to make them more effective. Co-options and external advisers can be used to ensure that boards have access to areas of expertise they may be missing. Chairs and chief executives can also try to ensure that their board members have opportunities to develop both indi¬vidually and as a team, for example, ensuring new board members have access to relevant induction and support, and that board members and senior managers have regular opportunities to reflect on the board’s role and performance. In many ways Students’ Unions have been traditionally effective here- but may need to think more carefully about the Trustee “hat” and supporting it specifically.

  1. The tension between performance and conformance

“Charity Boards” face a paradox in having to carry out contrasting roles that require very different orientations, skills and behaviour. The ‘conformance’ role requires attention to detail, the exercise of care, and skills in monitoring, evaluation and reporting. In contrast, the performance role demands forward vision, strategic thinking and risk-taking, and requires “boards” to be more pro-active.

How good are students’ union Trustees at either of these roles? New financial reporting regulations on charities and the more active role played by the charity regulator, the Charity Commission, should make us give precedence to the conformance role and make trustees more risk averse.

In the public sector the conflicting pressures arising from government policy often heighten this paradox. Pressures from the University on Students’ Unions are an obvious analogy. On the one hand, public organisations are expected by government to be innovative and entrepreneurial. On the other, they are often subject to centrally imposed initiatives, performance targets and close monitoring and audit, which effectively constrain their opportunities for strategic choice.

How can students’ union trustees manage this tension between their conformance and performance roles, so that issues of long-term or strategic importance do not get squeezed off the agenda, while at the same time the capacity for independent scrutiny is not compromised?

The attitudes and experience of Trustees themselves are important, which in turn could be shaped by selection processes, training and by the attitudes of managers to their Trustees. Also important are processes. It is necessary to manage agendas so important, longer-term issues are given prior¬ity. In some organisations long, detailed agendas mean that a process of operational drift occurs, where “boards” become bogged down in opera¬tional detail, leaving insufficient time for longer-term strategic issues. Witness this in many Students’ Union executive meetings!

Some of the more successful organisations regularly set aside special meet¬ings where routine “board” matters are set aside to focus on strategy. This is also an important means of managing the tension that can arise from carrying out very different roles at the same time. Some advo¬cate a cycle where different aspects of the role are to some degree separated out over time in an annual cycle of meetings. This would be fairly uncontroversial and easy to implement for a students’ union.

  1. The tension between controlling and partnering management

A paradox perspective suggests that a simple dichotomy between controlling or partnering management is too simplistic. Different forms of behaviour will be appropriate at different times in the relationship. Some suggest that the relationship with man¬agement is constantly shifting between consent, difference and dissensus depending on the issues being faced and the circumstances. The question is more one of balance and how to manage the inevitable tensions that can arise in such complex relationships.

There is some insight into the relationship between chief executives (CEs) (General Managers in our case) and “boards” from the chief executives’ perspective. Interestingly, in some career history research, only just over half of chief executives mentioned their boards when discussing key factors that supported or acted as barriers to achieving their work. From the CEs’ perspective the issue mentioned most frequently concerned the level of support they received from their boards, both as a positive factor and as a negative factor when it was absent or felt not to be of the right sort. This is certainly likely to be anecdotally true of General Managers- although it would be wise for AMSU and NUS to carry out research of the impact of elected officers on their work.

A study examining the issue of power and control between boards and directors (chief executives) in independent museums is revealing. It shows the central role chief executives play in shaping what boards do, through setting agendas, deciding how issues are pre¬sented to the board and controlling information. It also shows how museum directors used their professional status to keep control of issues concerned with the museums’ collections. While not quite a rubber stamp, most items at board meetings were agreed and only very few were deferred, amended or rejected and there was relatively little board debate.

We see this in play in many Universities. A study of those reveals that chairs play a key role in mediating the relationship between the board and Vice Chancellor. Here boards seem to have entrusted their chairs to establish a relationship with the SMT and to oversee their work. Hence support for its VC is at least partially conditional on the chair’s support. This centralization of power in the “Chair”, in our case the most analogous role being “President”, is not without its controversy when elected officers oft declare that “all trustees ought to be the same”.

It is certainly true to say that generally chairs of voluntary organisations may be less pro-active than their counterparts in the private sector and the relationship with chief execu¬tives may be less conflictual than those in the public sector.

How can the complex relationship between Trustees and senior managers and the resulting tensions best be managed? Tension and conflict seem most likely to occur when Trustees and senior managers have different expectations of their respec¬tive roles. The complex and interdependent nature of the roles offers plenty of scope for different interpretations.

One way of trying to establish a productive working relationship is through explicit discussion and nego¬tiation over roles and responsibilities. Some have noted that an important determinant of effective governance is that Trustees regularly review their relationship with management and how they were working together. Some have noted the value of a technique called “Total Activities Analysis” where Trustees and staff systematically review the organisation’s main activities and examine who should play what part in carrying them out.

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