A friend recently complained that a problem with their foot caused them to limp and the limp caused their hip to hurt as well. I am sure you have experienced something similar. We all know that the accommodations that we make for one mis-aligned part of our body can cause problems in another part of our body.
It turns out that the same thing can be observed in your organization. This is particularly true when the misalignment is between our boards and executive teams.
For years, we believed that the key to “good governance” was the existence of good policies. No doubt good policies are important, but if those policies are applied to misaligned roles, they will not have the impact that they intended. In fact, misaligned roles will lead to misaligned policy sets. Without clear roles, there will never be a clear differentiation or clear retention of the distinction between policies that establish or govern or operate. Misalignment leads to misalignment.
If boards are not clear about their roles and how they align with those of their executive, the executive will be drawn out of their appropriate roles as well. Boards are to provide direction so that executive can lead their organization, but absent boards force their executives to develop direction and lead their organization. Boards are to protect the interests of their stakeholders so that the executive can manage their organization. Again, absent boards force the executive to do both. This misalignment is directly responsible for the harm to investors that forced the hand of legislators to implement protective legislation like Sarbanes-Oxley and Dodd-Frank, both of which have drawn corporate attorneys into becoming responsible for the very protections that were originally assigned to the board….the protection of those whose money the organization is managing. The U.S. government requires organizations which manage other people’s money to have boards. Publicly held for-profits, nonprofits, and municipalities manage their investors’, donors’, and taxpayers’ money respectively. It is those boards that have been burdened with protecting the interests of these stakeholders. Corporate attorneys, on the other hand, are hired by executives and boards to help them navigate the legal aspects of their particular duties.
Once again, misalignment leads to misalignment.
So how do we address misalignment? We first have to define what alignment looks like. From there, we must then create tools to measure against that standard. Next will be to develop processes to establish and maintain correct alignment. Sound overwhelming? It can be. That is where Aligned Influence can assist. We have developed models and tools that help organizations accomplish all of those things. If you are ready to explore better alignment, visit our website at www.alignedinfluence.com .