Boards Can Learn from Mistakes

The Relationship Model

You Asked: Our Board of Directors made what I consider to be a very poor decision. It led to the resignation of our Board Chair, although even the Board acknowledged that she did nothing wrong. It’s just that the whole thing was handled poorly, particularly how the Board treated her. I have challenged the Board about this, but they don’t want to talk about it anymore. How would you handle a situation like this?

Answer: I don’t have anywhere near enough information about your situation to speak to your specific issue, but what you are describing is all too common for boards. Perhaps some general comments about boards taking responsibility for their actions will help you just the same.

Sometimes boards follow a good process but still make a poor decision.
Sometimes boards follow a poor process and still make the right decision.
Sometimes boards follow a poor process and make a poor decision.

In my experience it is not common for a board after making a mistake to revisit its decisions or its process to analyze what went wrong, even if they know they made a mistake.

In order to overcome that board tendency, it is important to understand the difference between group decisions and individual decisions. Individual decisions are much easier to analyze afterwards and to see the mistakes we made in process or the resulting decision. For boards, however, it becomes more difficult for a group to acknowledge its mistakes. The difficulty lies in finding the resolve to accept responsibility for poor process. Boards find it difficult to hold themselves, its members accountable. It becomes even harder when the process was in the hands of board members who are no longer on the board.

I have seen a board make a decision to delay replacing an Executive Director in order to save money. It wasn’t until two or three years later that the board ran into such financial difficulty that it almost resulted in bankruptcy. However, it never took ownership of the error in board judgment that caused the problem. On another occasion a CEO’s position was terminated. It took six years for the board – all different people by this time – to acknowledge that the CEO didn’t resign but was fired. It was impossible for the board that actually made the decision to own up to a flawed process.

The real tragedy for such a board is that it doesn’t create or modify its policies to prevent it from happening again. Because the board doesn’t learn, it perpetuates the environment that allows the flawed process to be repeated.

It is very healthy for a board to revisit its decisions, particularly those that are commonly acknowledged to have been flawed in the process or the outcome of the decision. Not only does that make for a stronger board, but it also allows the individuals on the board to take that experience into the groups they become part of in the future.

Your gentle insistence that your Board revisit that decision will help them, but only if the members of your Board are ready. It may help to emphasize that the failure may not have been the failure of an individual, but rather a failure of the process of decision-making. It may take some time for the pain and embarrassment to ease before people can face the reality of what they did together.

Les Stahlke, President/CEO Inc.

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