Accountability Lesson Number 1: Questions Must Be Asked
How do you know what you don’t know? Someone asked this question last week in a workshop on the topic of board oversight and some high-profile problems. It’s such a great and critical question. There’s been a swirl of conversations in the last week or so about financial problems and governance issues at a number of nonprofits, both local and national. No matter what the details are, questions have been raised in every situation about the board’s role – what did they know, when did they know it, and what did they do? But what’s the first step for the board, since they are relying on reports from the staff and have little or no access to the raw information. Boards that ask for lots of details are accused of micro-managing and not trusting the staff. So how do you know what you don’t know? There has to be a balancing act between accepting reports at face value and asking questions that go beyond the information presented. I think that there’s an art to asking good questions – my favorites generally start with either “Why…?” or “What if…?” (I actually have those two words up on the wall in my office). Speaking last night to a group of people who had recently joined boards of nonprofits, I suggested that asking questions is their primary job. It’s great if they get an answer that makes sense. However, the role of governing requires further action and follow up when the answer doesn’t make sense, or when the answer is “Don’t worry about it,” or “I’ll find out later.” The distinction between hyper-questioning and prudent questioning depends on circumstances, but in every one of these recent governance and financial situations there were some “why” questions that needed to be asked and then carried through.
This complex balancing act between supporting and governing is discussed in the article Why Boards Don’t Govern available from CompassPoint. One point raised in this article is the importance of creating an atmosphere and culture at board meetings that encourages questions and disagreements. I know in financial matters, many board members feel like second-class citizens because they are not the “financial” board members. The fact is that if they have a question, or if something doesn’t make sense, they need to feel free and encouraged to ask the question. It just might be the question to unlocks the truth.
There was no telling what people might find out once they felt free to ask whatever questions they wanted to. (Joseph Heller, Catch 22).
I have noticed on many occasions that both board and staff members suffer from a lack of confidence when it comes to asking questions about financial issues. I, too, fell prey to the notion that those presenting the information must know best and would tell me if there was reason for concern. When I started asking questions to better understand the information presented, it became clear that very few people could answer them and the “non-financial” people were grateful that someone else was asking what they thought might be considered dumb questions. Presenting basically the same information in different formats on a consistent basis seems like one effective way to help people feel more comfortable reviewing and analyzing financial information. At least one format is likely to stick.
Comment by Kristi Rendahl — July 20, 2008 @ 3:54 pm
Your example is perfect, Kristi. Once the door is opened to start asking questions you will find that board members feel like they can finally open their mouths. You’re right, too, that format and presentation can really help.
Comment by Kate Barr — July 22, 2008 @ 1:32 pm