LeadingAge Magazine · September-October 2017 • Volume 07 • Number 05

Built for Performance: Proactively Boosting Board Efficiency and Engagement

September 18, 2017 | by Gene Mitchell

Board restructurings aren’t always done in response to crises or major stresses. Here is an example of a board that has made changes in a more deliberate fashion, as part of its regular self-assessment and a belief that its performance can continually improve.

United Church Homes, based in Marion, OH, offers a full continuum of services for seniors in 13 states. It is in the middle of reducing the size of its board and reorganizing its committees to allow more strategic work by board members.

According to Kenneth Young, UCH’s executive vice president for planning/development and general counsel, the board is also studying servant leadership principles as a way of increasing engagement of members.

For details on the thinking behind these governance changes, we talked with Young and Cathy Green, the UCH board chair.

LeadingAge: Can you offer background about why the board and management of United Church Homes thought it was time to make governance changes?

Cathy Green: The idea originated over 2 years ago, first with the executive committee, and then it took a year and half for the governance committee, back and forth with the full board, to discuss changes. It was not stimulated by a specific problem but by an awareness that having a relatively large board like we do, it makes it hard to keep everyone educated, and the challenge of having the caliber of people [we need] to join the board with the relevant experience and skill sets.

Ken Young: From the management perspective, a couple of years ago, we’d been talking a lot about innovation at United Church Homes, and our desire to be creative and not be afraid of implementing innovative things. Part of our board restructuring was the result of also wanting to be more innovative relative to governance. Nothing was broken, but it was more a matter of a process of continually looking to improve. If we can just tinker a little, we’re looking for more efficiencies, more engagement from a broad perspective.

Cathy Green: It gets a little dicey when you start thinking about it. We didn’t see a problem, and this isn’t criticism of the engagement of the board that we had, but having 18 to 24 people—though we had been operating closer to 18—and keeping that many people knowledgeable and communicating as appropriate, and keeping them educated on what we were doing, was a little unwieldy. And we’re still at the beginning of this; we just voted to change the bylaws so it’s too early to say is it working.

This may be the right time to name some of the concerns we’re on guard for, because anytime you do something new you don’t assume everything will work as planned. What’s critical is that we on-board new directors as quickly and thoroughly as possible. We’re aware most directors don’t come out of this [field], and we’re a pretty complex organization. Even the best-prepared directors face a considerable learning curve. If you have fewer experienced board members and then if some of them aren’t available to attend a meeting or to be as engaged as normal, then we start concentrating decision making in too small of a group. I don’t think a smaller board is a big risk, but it is something we talked about.

We settled on a board size not dramatically smaller, going to 12 to 15—closer to 15 at the beginning and as we see it work, we’ll edge down toward 12.

LeadingAge: Can you summarize what changes were made?

Ken Young: The primary changes are reducing to a 12- to 15-member board with 2 ex officios, the CEO and the Conference minister. We’ve reduced that through attrition—no one is being removed, we’ll do it through natural turnover. The other primary change is we’ve cut our committee structure virtually in half.

We’re going from the typical siloed committees of finance, health care, gift planning and advancement, etc. We’re creating 4 new committees, that we call “performance” committees, because they’re more interdisciplinary and will see more quantitative data they can base their decisions on. That will allow us to have much less “reporting” and more substantive dialogue with the board, as well as more time for strategic analysis. The committees are:

  • Customer performance: all things focused on customer service, quality standards, satisfaction results, strategic improvement activities, etc.
  • Financial performance: will focus on dashboard results, serve as our audit committee and assist in budget preparation, and will be involved in financial improvement activities and new business development.
  • Advancement performance: How are we doing in terms of the goals we set and our results toward those goals? How is our dashboard for donor cultivation? What strategic improvement activities are under way?
  • Mission integration performance: it will include communication and PR, advocacy and event planning, relations with the church and communities, and governance work.

The 4 committees will meet within the structure of our quarterly meetings, but there will be some ad hoc committees and standing committees such as nomination, that will still continue to exist though they might not meet at every quarterly meeting.

This will [mean] having a higher percentage of members involved in every topic. Typically, every member serves on 2 of these. It’s possible we may have even further reductions as the board gets smaller. It may be possible to do more of this within our normal meeting rather than a broken-out committee structure. That reduced redundancy will keep everyone more engaged and aware of how things work together. Along with the ability to be more selective about who we invite on the board, we can be more selective on who we extend an invitation to.

We’ll start implementation in November, and I guess there may be some hybrid form of implementation. Everyone recognizes it will be a little bumpy, but by February we’ll be fully implementing the committee structures as well.

Cathy Green: The board is very involved in setting strategic goals and monitoring reports and progress relative to those goals. It hasn’t been a practice for the board to be involved in day-to-day operations. There is a clear separation of what management is responsible for, and there is no change envisioned or desired to that.

While this did originate over 2 years ago, it also ended up being part of our normal 5-year bylaw evaluation, which is a good practice we’ve always had, and this ended up getting folded into that process.

LeadingAge: I’m interested in the comparison between formalized things like bylaws, committee structures or board member job descriptions, and more emergent things like group norms and personal relationships. When you evaluated the old model’s performance, how did those things intersect?

Cathy Green: We didn’t see problems with relationships and yet, having a more compact board will allow closer relationships among members because there aren’t as many in the room. It wasn’t a primary driver, but it is something we see as an advantage to seeing a smaller board.

Ken Young: Every 2 years we do a board self-assessment, and in fact we most recently used the LeadingAge Board Self-Assessment Tool. The findings reveal we’re really very blessed from a governance standpoint; management is very trusted by the board and vice versa. There’s a great amount of respect and a healthy environment of collegiality. I think people are willing to express contrary positions and not afraid of being shouted down. My role is that, with these changes, to make sure we’re not losing the fiduciary role. And I feel confident these changes will not impede the directors’ abilities to perform them well.

Cathy Green: There’s a strong sense by the board that it’s important to retain independence from management in order to fulfill the role we’re assigned. That was one of the the things discussed; there had been a period back during the financial crisis that had some serious, existential implications for United Church Homes. It required some heavy lifting by the board at the time and some continuing, lingering awareness from some of today’s board members that were around then, that we required directors who were sufficiently independent from the management team that they could ask hard questions and insist on some changes. Trying to end up with a board size that didn’t inadvertently interfere with that was important. We think the [new] size we’ll have doesn’t pose a risk that those people will be overly influenced by management. There needs to be that degree of distance that allows the governance responsibilities to happen as necessary.

Gene Mitchell is editor of LeadingAge magazine.