Risk is here to stay. Let's Get Comfortable with Transparency.

I’ve been on both sides of the charity Board table, as a Trustee and as an Executive Director.?So, I understand the dance that happens between these two sets of stakeholders.??I know that CEOs and their teams sometimes present bad news through an optimistic lens to reassure their Trustees.?I understand that Trustees sometimes give CEOs a grilling over sub-optimal results.?There must be a healthy degree of challenge at charity Boards, and Executive Directors often feel a sense of trepidation as they prepare to report to their Trustees.?It’s all part of the hierarchy. It’s all part of the scrutiny process.?It’s all part of the dance.?

But recently I have noticed Executive Directors and CEOs worrying more about revealing risks or taking bad news to their Boards.?I have spoken to Income Generation Directors who have been asked to present a less pessimistic forecast by their CEO, or CEOs censoring risk registers because they just can’t face a grilling on top of everything else on their overloaded plate.?I have spoken to Trustees who are hyper vigilant, still reeling from the impact of the pandemic, they jump on every risk with a forensic focus on how it happened, who is responsible and what could go wrong.?

Times Are Tough

These are tough times in the charity sector, and it’s easy to understand why senses are heightened. Boards can be risk averse when failure is scary or the stakes are high.?It’s easy to see how post-pandemic exhaustion, uncertainty and unpredictability leaves CEOs facing lots of questions whilst armed with few answers, managing unprecedented risks with untested mitigation.

Review Your Rules of Engagement

The relationship between Executive and Non-Executive has never been more important.?Building trust and transparency between Trustees and CEOs so that the Board table is a safe space to bring bad news, constructively explore problems and collaboratively find solutions is critical.?So, if you are a Charity Chair, a Trustee, or a CEO, it’s worth taking time to review and re-calibrate your rules of engagement and culture around the Board table.?

• Transparency and trust are essential.?
• There is no room for sugar-coating by Executives
• There is no place for blame by overly-critical Boards
• CEOs must feel safe and supported as they bring the post-pandemic risks and reality to their Trustees.?
• Boards must proactively encourage and reward transparency and honesty, even when the challenges are difficult to hear and even harder to resolve.?

Now more than ever, Trustees, CEOs and Directors need to pull together and work as one team.?Learning to live with heightened risk is a way of life.?Risk is here to stay.?Honesty, transparency and collaboration are the best mitigations we have.??