A Board’s Purpose, Dynamics and Diverse Voices in Governance
Inspired by the webinar A Board that’s Fit for Purpose, hosted by the Elders Council for Social Entrepreneurs.
Succession and transition planning are critical yet often under-explored topics in the world of social entrepreneurship. Navigating these processes effectively can determine the longevity and future success of an organisation, particularly when it comes to the role of the board. Dan Viederman, an award-winning social entrepreneur with extensive experience on both non-profit and for-profit boards, shared valuable insights during a recent discussion with Andrea Coleman, one of the Co-Founders of the Elders Council for Social Entrepreneurs. In this article, we delve into the key takeaways, including the challenges of leadership transition, board dynamics, and the importance of fostering diverse voices in governance.
The Emotional Complexity of Succession
For founders and long-serving CEOs, the prospect of leaving can evoke a mix of emotions. One of the first insights Dan shared was the emotional complexity surrounding leadership succession, especially for founders. As someone who has experienced this firsthand, he spoke candidly about the guilt and ambivalence he felt when stepping away from the organisation he had built. This emotional conflict is not uncommon and is often compounded by concerns about the organisation’s vulnerability during such a transition. Founders and executives may struggle with the fear of losing control or the uncertainty of how the organisation will fare without their direct involvement. This emotional component underscores the need for compassionate and thorough succession planning.
Ensuring Board Readiness for Transition
From a Board perspective, moments of transition are a particularly vulnerable time for an organisation. Dan emphasised the importance of regular communication between the Board and the leadership team, especially during succession planning. This ensures that the incoming CEO or Chair of the board receives the support they need to succeed. This ongoing dialogue can help align expectations and prepare for eventual leadership changes. Dan emphasised the importance of having a Chair who is willing to invest time, fully embrace the role, and deeply understand the organisation. This commitment from the Chair can set the tone for the entire Board and foster a culture of engagement and responsibility.
He highlighted the necessity for the board to actively own the process, including having a stake in recruitment and succession processes, rather than leaving these tasks solely to the outgoing leadership. A Board that is involved in governance and truly understands its role can make a world of difference during such transitions.
Financial Investment and Commitment
Dan also noted that Board members who invest financially in the organisation tend to be more intrinsically invested in its success. While financial backing is important, this commitment must be balanced with a diversity of voices. Boards that lack diverse perspectives may struggle to address the evolving needs of the organisation and its community. This is especially relevant during times of transition, when fresh ideas and new approaches are essential in guiding the organisation into the future.
The Importance of Cultural Alignment
One of the more subtle challenges of leadership transition lies in maintaining or reshaping the company culture. Dan pointed out that while it is crucial to select Board members and new leadership who align with the current culture, there may also be times when an organisation requires a cultural reset or refresh. Knowing when to refresh the organisation’s culture can be key to long-term success. This involves not only recognising the need for change but also bringing in the right people to drive that transformation.
Empowering the Incoming Leadership
A crucial aspect of successful succession is ensuring that the incoming CEO receives the necessary support. This support can take various forms, from mentorship to resources and clear communication channels. The Board plays a pivotal role in facilitating this support, creating an environment where the new leader can thrive and continue the organisation's mission.
Generational Differences and Attracting Young Talent
Another recurring theme in the discussion was the challenge of generational differences in leadership and governance. During the Q&A session, the hiring of younger people for succession roles was brought to the table. The comments acknowledged that while many young professionals lack the experience needed for Board positions, younger people can help move the organisation forward. For organisations looking to modernise or "move into the 21st century," bringing in younger Board members or employees can be a valuable strategy. However, this approach must be balanced with the experience and institutional knowledge of long-standing members. To attract younger talent, Board meetings need to be engaging and fulfilling, allowing young leaders to feel empowered rather than burdened. At the same time, organisations must be prepared to invest in mentoring these younger individuals, providing them with the knowledge and support necessary to succeed in leadership roles. Bridging this generational gap is essential for the long-term sustainability of social enterprises, and it’s a challenge that Boards must actively address.
Diversity and Inclusion: A Persistent Challenge
One of the recurring themes in the discussion was the need for more diverse voices on Boards. Many organisations struggle to implement this in their leadership, often skewing towards older, male members. This lack of diversity can limit the Board's perspective and its ability to address contemporary challenges.
To address this, Dan and the participants discussed several strategies:
Actively seeking to fill specific gaps in expertise and representation.
Making Board meetings more attractive and accessible to younger members.
Challenging the notion that young people lack the experience to serve on Boards.
Addressing the underrepresentation of women in Board positions
Moving Forward with Purpose
Succession planning is a deeply personal and organisationally critical process. As Dan Viederman's experiences demonstrate, successful transitions require a Board that is not only committed but also diverse, culturally aligned, and open to new voices. Social entrepreneurs who are navigating these challenges can benefit from the insights shared in this discussion, as they highlight the importance of preparation, cultural awareness, and generational inclusivity.
As organisations evolve, so too must their Boards. Some key considerations for the future of Board governance include:
Succession planning not just for the CEO, but also for the Board Chair.
Exploring ways to attract and retain younger Board members.
Addressing gender imbalances in Board composition.
Balancing the need for experience with fresh perspectives.
Creating a board that's truly fit for purpose is an ongoing process that requires intentionality, diversity, and a willingness to adapt. By taking these insights to heart, social entrepreneurs can build boards that not only govern effectively but also drive their organisations towards greater impact and sustainability. For social entrepreneurs embarking on their own leadership transitions, it’s vital to remember that there is no ‘one-size-fits-all’ approach.
Author: Chanelle White
Editor: Chris Underhill