Social Enterprises Need Entrepreneurial Boards

BY MARTIN STEPEK

 

Governance is one of those topics generally filed under "boring but important".

Which is a pity because in social enterprises especially, the board of directors or trustees can and should be exciting as well as important. Sadly... this is not commonly the case.

I've written this article to stimulate some thought about what we really need from boards – this is how I see it, but what do you think?

As someone who has the privilege of visiting many social enterprises and meeting their board members it seems to me that there is a major problem in the sector regarding boards, what they actually do, and what role they should be playing in the development of the social enterprise.

The problem often stems from how social enterprises originate. Someone - the social entrepreneur for want of a better term - wants to save the world, or at least a bit of it, and has come up with, or copied, an idea through which to do this. If this was a commercial business concept there'd be no complications. You simply set up and start trading. You are the ruler of your new fiefdom. You are the director, CEO, financial secretary, and general dogsbody all in one. You report to no one because you are the founder and the boss.

It's not like that in a social enterprise...

Especially if you feel the need to become a charity, which most do, not because they really want to be a charity but because being a charity opens the door for funding from some trusts and foundations and gives some other freebies. The rules or guidelines say you need a board of trustees, separate from the people doing the day to day work, and their job is to ensure that the social enterprise stays true to its values and vision. Welcome to governance.

All of which sounds great in theory; and theory is almost always great. It's reality that's a bit more challenging, and of course it's reality where the social enterprise has to undertake its mission. The reality is that most people who found a social enterprise become Chief Executive of the organisation. They then build a board of trustees consisting of people they know or people who they have heard are good on boards, or people who are prepared to come and make up the minimum number stated on the Memorandum and Articles.

Not a great way to build a board of trustees. Over time board members leave, others join, mostly through a process of asking existing board members who they know who might be helpful. And so the board mostly replicates itself over time. The poor Chief Executive speaks to a board who are focused on reports and accounts, and the board meetings are usually viewed as necessary evils by all who attend, and are usually dull and boring. Not, I would say, a great advertisement for governance or leadership.

So what should a board look like, feel like, be like?

A board should be entrepreneurial. That is, it should combine imagination regarding vision, bold thinking and measured risk-taking. More social enterprises wither on the vine than die from being too adventurous. As I don't know enough boards of social enterprises I can't make an objective assessment but my guess from those I do know would be that the majority are more on the side of the withering than the adventuring.

Board meetings should dispense with the dull stuff swiftly. This doesn't mean without due care. The careful scrutiny should be done in advance of the meeting, with key queries or concerns raised by email or phone beforehand so that the CEO can find answers and share these at the meeting itself.

The bulk of the meeting should concern how to create a brilliant organisation...

How to make the place fun and exciting for the employees, and how to minimise the boring crap that comes with being an organisation. It should more resemble friends at a pub than great-uncles and great-aunts at a wake.

It should not be the job of the Chief Exec to come up with the ideas to grow or diversify the organisation, nor should they feel they are having to manage or drive the board as is too often the case. The board should be so dynamic that it challenges but uplifts the CEO meeting by meeting.

The question arises, how do you get rid of the dead wood, the dull and useless? The dull but useful can stay. Find allies on the board, the good ones. Talk to them about the need for fresh blood. Try to find really striking people and ask them directly to join the board. Artists, business people, mavericks. Not worthies. Slowly replace the dead with the alive.

Make your board the kind of people you'd love to have challenge you, and the type you'd love to have a meeting with.

Go for it and don't put up with mediocrity any more.


Martin Stepek is an author, speaker, and teacher of mindfulness. He is CEO of the Scottish Family Business Association, a Director at Scottish law firm Wright Johnston & Mackenzie. Martin is an Associate Tutor on our Cross-Sector Collaboration programme.