Illustration of Robin Cardozo by Nate Schmold
TRANSCRIPT
Matt
In the last episode of Sound-Up Governance was part one of my amazing conversation with Robin Cardozo, a hugely experienced senior executive and board member in Canada's not for profit world. And this episode is part two. So let's pick it up right where we left off.
Robin Cardozo
You and I have had some conversations about the phrase that sometimes gets bandied about that governance is broken. And governance is broken in the not for profit sector. And as you know, I have have a few reactions to that, if you don't mind, I'll just sort of go segue there. One is that the reason that I object to the phrase governance is broken is that number one, I don't believe it ever was whole. So for something to be broken it one has to say that it was whole at some point. Number two, I actually happen to believe that governance in the not for profit sector today is a lot stronger, from what I saw when I started 30 years ago. A lot of what I saw 30 years ago was well meaning people who really wanted to do a good job, but really had no idea what a board member's role was. I think 30 years later, there's a lot more discussion about what governance means a lot more education opportunities, and as a result of that, I think a lot of boards in the not for profit sector and the charitable sector and beyond have a better understanding of what their role is. Having said all of that, I think I'm actually quite encouraged by the discussion that governance is broken, because what it says to me is that I can say this as an old guy, I guess, is that the new generation is questioning... We think that things are a lot better today than they were than they were 30 years ago. And that's well and good. But what I think the new generation is saying, but it's not good enough, right? It needs to keep getting better, which I think is great. I think that this ties into the earlier question, which is about boards not knowing their role. During the early days of the pandemic, a number of us were, I was asked to join a group of volunteers who were who made themselves available to do some quick in and out consulting for organizations, and particularly in the arts sector, that had a range of challenges as the pandemic was hitting. And as a lot of arts organizations were having to close their doors, particularly performing arts organizations. And what I found was a whole range of boards, some of whom got involved about how could we help? What exactly are the challenges? What are the short term or the long term implications? And how can we as a board help here? There were other boards, who were saying "this is a management responsibility, the financial crisis, tell us what what you're planning to do and we will respond." And there were others who were saying, "no, no management, you shouldn't be thinking long term. This is the time to focus totally on the short term crisis, we only want to talk about the short term crisis." To me, this was a wide range of boards, who didn't perhaps didn't fully understand their potential, and perhaps didn't fully understand what the role of the board was, and management in many cases, not understanding what, likewise, what the role of board and what role of management was. So I think there, I think there's a lot of opportunity for boards to get better, and for management to get better on governance by expanding, improving our understanding of each other's roles. And by building trust and mutual respect, and I know that's easy to say, and some people may sound cliched, but I do believe that education, understanding of roles, building of trust and respect, I think will lead to better governance.
Matt
I really like the way that you've talked through this. I do like to sometimes say that governance is broken, but with the caveat that I think is exactly the same as what you're saying, which is, "but it's always been broken. And that doesn't mean that some catastrophe has occurred that we need to deal with." And to me, one of the biggest issues and I'd like your reaction is and this might seem trivial, but I don't think it is, is that governance or corporate governance broadly, governance in incorporated entities, regardless of their purpose or model or whatever, has always lacked a clear definition. It's always lacked certainly a shared definition. And it often gets, in my opinion, erroneously equated to compliance. And there's this temptation among managers and among board members to think "well, as long as we know the rules and we're following them and we're looking for peers to who are doing what we think is best practice and following that, then we have good governance." And my feeling is that that doesn't that's not governance at all. If those are the rules, governance is what happens inside the rules. And we'd rather play the game, well then play the game poorly. And I like the example that you just used of different organizations reacting to a crisis in different ways. And I wonder if part of this is that if we don't have a shared understanding in our organization among the leadership of what good is when it comes to governance, we're kind of we find ourselves in those situations, just reacting. Right? And so I don't know if there's a question in here, or if there's a you know, how much of this do you think is is not a purely dictionary definition problem, but a lack of a shared understanding of what we're actually trying to do?
Robin Cardozo
Matt I agree, absolutely. First of all, that governance is so much more than compliance. It's so much more than going through the box ticking exercises of completing the regulatory requirements. Boards have so much more to offer management has so much more to offer. I keep coming back to my areas of cliche in a way that I think it's about building mutual trust and respect and clarification of roles. But I also think that it's... tying those things in together, a lot of this is personal. So when we're when I was the CEO of an organization, during which time during those 13 years, I had about three or four board chairs, and they were all different. I had to reestablish my relationship each time to get to a point of mutual trust and respect. And sometimes that meant doing different things. Sometimes it meant providing different information, it meant bringing different issues to the board, because there was a different expectation. And it's not to say that anyone was right or wrong in those situations, it was just that in order to build that trust and respect, that in turn would lead to good governance, there needed to be a clear understanding of who was doing what and clear communication. So it's mutual trust and respect, but tied into personalities and how the personal trust gets built at one level between the CEO and the board chair, but also between the chair on the board between the board and management, and all those things. And those things go through cycles.
Matt
At this point, Robin and I had a bit of a side conversation about how opinions have changed over time about what board sizes are appropriate or acceptable. It occurred to us both that this is deeply related to the work that we do on equity, diversity and inclusion. Sometimes, the rationale for having a large board is "well, let's make sure that we've got room for our donors to be represented, or room for our communities to be represented, and so on and so on." How important in your opinion is this representation piece, especially when it comes to having a voting position in the boardroom? How important is representation to good governance, whether it's on the axis of donors or communities or diversity, or whatever axis you think is relevant here?
Robin Cardozo
Yes, representation definitely is important within reason. So to me, I would not say that a hugely diverse city like Toronto, I would not make a claim that an organization needs to have 30, or 40, or 50 people on the board simply to be representative of that diversity. However, I would also argue that at the other end of the scale, a board of eight might make it very difficult to have very much diversity. One needs to look at this on an organization by organization basis, and who are the key stakeholders, and which are the voices that one wants to hear on the board? One needs to have a reasonable degree in the context of the stakeholders of the organization, a reasonable degree of diversity. And I'm not sure that it all has to be voting either. Let's say for the sake of argument, you have a board of 20 in a, in a highly diverse community. Well, I think that board can make it their business to learn about the broader input the broader stakeholder groups without necessarily having to have every single group represented at the table.
Matt
Okay, so maybe we're zeroing in on something that I really want to talk about, which is the fact that Equity Diversity and Inclusion seems to be somehow particularly hard in boardrooms. And I'm not saying things haven't changed, things have changed dramatically, not just the sophistication of the vocabulary and conversations that happens at the leadership level of organizations, which has improved dramatically in the 20 years that I've been in the space. But also, I think the openness to a wide spectrum of approaches and solutions and so on. But why is this Equity Diversity and Inclusion thing so hard in boardrooms?
Robin Cardozo
That's a very good observation, Matt. And yes, it does often seem to be hard. And I will just break it down into two or three components. First of all, recruiting. There has always been a feeling in many organizations that it's, it is difficult to recruit from diverse communities or to get diverse representation. And I think as you and I both know from our work and from all the people we've spoken to, it doesn't have to be that difficult. It just, it ends up being a bit different. As our mutual colleague Nick Chambers has said in the past, the candidates are out there that just not necessarily in the usual places. From a recruitment point of view, people might sometimes take the easy way out. And it's not that difficult to find qualified candidates from any stakeholder group. Secondly, I think what where it often does fall down and this comes back to some of the research that you and I did, were I think it does fall down is in the whole area of inclusion. That once a board has diversified human nature often allows one to continue to operate in the same way that one always has at the board meetings. For years and years as far back as anyone can remember in an organization and have been run in a certain way the CEO provides an update, each of the committee chairs provide an update, and the sort of "any questions?" kind of thing at the end of each report and everyone goes home. But I think with with a more diverse board that old style of meeting doesn't work and some different thought needs to be given to how we include people with different perspectives. And that involves doing some additional work before meetings. It involves having one on one discussions. It involves in a big way how one onboards new board members. All the things we're talking about tie into good governance, whether it's recruiting with with more thoughtfulness, whether it's setting agendas to achieve greater inclusion at the table, whether it's asking questions in a different way so that people feel an opportunity to engage. They all tie back to principles of good governance that will in turn lead to better inclusion and better achievement of EDI goals.
Matt
Listeners of my One Minute Governance podcast are familiar with my current definition of good governance as "the act of intentionally creating effective conditions for decision making in an incorporated entity." Back in episode 113 of OMG. I asked the question "is Equity Diversity and Inclusion the same as good governance?" And I wanted to know Robin's take.
Robin Cardozo
Yeah, absolutely. So I'm not sure I would word it in exactly that way. I wouldn't say that is the same thing as as good governance. But perhaps I would say that good Equity and Diversity practices are no different from good governance practices. So maybe I'm quibbling with words. But every thing that one needs to do to achieve good equity, or effective Equity, Diversity and Inclusion practice at the board, every single thing is directly related to good governance. And it's not like it stands off on its side as an EDI piece, it goes to a core of good governance. And it affects every member of the board, it affects everything at the organization, not just the EDI column. There was for the longest time EDI was siloed. That was one person who was responsible and the separate report at the board perhaps at the best and so on. But whereas in fact, it really needs to be seen as cutting across every single thing that that the board does that management does. And it becomes a component of everything we think about.
Matt
So there's another thing that you mentioned that that I I've been thinking about in a specific way that I'll run by you too, because I'm curious about your reaction. So you mentioned that that sort of status quo conventional way of approaching a board meeting is not well aligned with the idea of especially inclusion, right? If we have, I kind of see and I think you do too, in some ways, Diversity is like the box ticking part. If you've got a diverse group of people that doesn't on its own necessarily do anything. The act of inclusion matters. Deliberate, intentional inclusion. And just doing things the way we've always done them is clearly not being inclusive. And I wondered, as, and I continue to wonder, if maybe there's no such thing as a set of conditions that is inclusive, or that can be inclusive of everybody simultaneously. And that maybe we have to be deliberately changing the conditions in the boardroom so that everybody has an opportunity to be included at different times rather than hoping that we're either compromising enough that everybody's 50% there, or hoping that we can find that bullseye, where everybody's 100% there. What do you think?
Robin Cardozo
Absolutely. From any work, on any issue or any perspective, when you have a diverse board, ideally, people are going to be coming at discussions. People have different skill sets, they have different lived experience, have different expectations, I don't think you can try to involve everyone, or indeed keep everyone happy on any one discussion, or any one subject. But the goal of the chair and the CEO, really is to make sure that over time you do engage everyone. On some boards that have been on there are some there are some board members, for example, who may not engage a lot at a great deal at the boardroom table. And but they'd have a capacity and they do engage hugely outside the boardroom. Might be at the committee or it might be in terms of their unique advice to management on a on a technical issue that in turn informs their role as a board member. So I think every board member has something different to contribute. And that should be encouraged in a diverse board.
Matt
Yeah. And you know, it's... Just picking up on something you just said. Sometimes I hear frequently, maybe more frequently than I'd like to admit, I hear board chairs and CEOs say something along the lines of "oh, yeah, we got a new director. And they don't really say anything, usually for the first year or so." And I'm thinking "A year?? Like why waste everybody's time? Why don't you do the work to get them involved in a meaningful way from day one?" Whatever that work might be? What do you think about this idea that well, maybe we need to ramp up slowly and hope that somebody gets to a point where they're contributing after a year or however long?
Robin Cardozo
In fact, I've heard versions that are even a bit more extreme than that where a chair has said to a board member, we don't really expect to hear from you in the first year. And the board member, I don't even know what the board what we
Matt
We hope we don't hear from you in the first year.
Robin Cardozo
Exactly! I think I think that that is a huge, particularly in the not for profit sector where people are volunteering their time, and could be doing many, many other things, I think to say "we don't expect to hear from you," or "don't worry, you don't have to participate," I think is insulting to an individual and a huge waste of resources. Now, having said that, there are some people who, who for cultural reasons or their own requirement to learn may not wish to contribute at the boardroom table in their first few meetings. But I think it's up to the chair and the CEO to find opportunities for them to contribute in other ways. I've been on boards where the longer term board members very comfortably have slipped into the role of feeling that they are the ones who talk at board meetings. Because they've been around the longest they can say, "Oh, yes, five years ago, we did such and such," or what have you. And that's an it's an important piece of a discussion, what happened five years ago, but that should not be allowed to dominate the board discussion,
Matt
Right. And I think this may be goes back to the, I'm not going to get to the exact word you used perfect, but this convention that "okay, well, we're going to have a very specific agenda, every agenda piece is going to have a pre read, we're going to come into the boardroom and we're going to do a presentation, at the end of the presentation, we're going to ask 'does anybody have any questions?' that's going to be your trigger or your prompt to engage in the conversation, if you don't have anything to say we're moving on to the next thing." And then eventually the meeting is over. This is I think... that's the type of convention that makes me say, you know, well, I think governance is a bit broken here. Because we're failing to be curious about a different set of conditions we might be able to create that would accomplish what you've just described, which is an environment where instead of those same old people talking about the past, saying, "yeah, we've seen this before, isn't that interesting that I remember that?" Instead, we are engaging them and everybody else in a generative conversation about what's possible, instead of what has happened. Am I, Is that fair? Am I being extreme here?
Robin Cardozo
No, I think that's fair. And having said that, while you were speaking there it just triggered another thought in my mind, which is that boards also need to be a bit careful about continually generating new ideas that management have to follow up on. I've certainly been in the situation in management where we come out of a board meeting with half a dozen great ideas or more, where board members expect us to come back to say, "Okay, here's the feasibility study, we looked at oh, here's this report you asked for." I've been I've been in situations where staff have spent hours and hours on a particular report, that comes back to the next meeting, and the board deals with it in about 30 seconds, because their interests have moved on. I think board members have the right to express their ideas and have a right to share them. But there needs to be expectation management, essentially on part of the of the chair and the CEO, to make sure that every idea isn't necessarily going to get a response the next week or the next board meeting. That some of them are simply going to be taken under advisement or may come back when we're doing next year's business plan or when we're doing next year's budget or what have you. So getting that balance right is not easy, because when you have engaging, enthusiastic board members, they're going to be bubbling with ideas. But I think it's the it's the role and a difficult role of the chair and the CEO to know when to manage those expectations.
Matt
Thanks for listening to the conclusion of my conversation with Robin Cardozo. Thanks to Robin for being an amazing friend and amazing ally in this whole governance thing. And thanks to you for listening. As usual if you have any thoughts you'd like to share or reactions to this episode, or any other episode, or suggestions for topics or guests we might cover in the future, send an email or voice memo to soundup@groundupgovernance.com. Thanks again for tuning in. See you next time.
Sound-Up Governance (Ep9) - Is governance broken? (feat. Robin Cardozo)