Recently a judge in
New York has found a way to accomplish something that is normally
difficult to impress upon board members. “Joint accountability” is a term
used to apply to groups such as boards that are collectively accountable
with each person carrying the same accountability as all others on the
board. They all share in the same accountability. Unfortunately, this is a
difficult concept to reify for a group—that of mutually shared
accountability. Patrick Lencioni addresses it in his book, The Five
Dysfunctions of a Team, explaining that without it, team effectiveness
is mitigated. Shared accountability, in turn, says Lencioni, depends on
commitment (by each member). Nevertheless, several elements found frequently
in board governance diminish the sense of shared accountability, size (too
big), poor attendance, hiding, failure to individually engage, e.g., to
participate, or abstaining when voting, not owning board decisions once made,
etc.
In the Dec.
10th NY Times was a story of the board of a nonprofit charity
that rents affordable housing to students. The board members were fined
roughly $1 million each for “stunning” negligence by “breaching” the duties
of loyalty and care in permitting the organization to engage in fraud via
inurement—self-dealing with a corporation owned by the NP’s executive
director. In spite of the fact that the ED mislead the board, the court held
that they had a duty to monitor organizational transactions to assure
avoidance of conflict of interest and fraudulent inurement. Trustees also
had, themselves, some individual “consulting contracts” with the
organization, which perhaps helped blind them to other forms of perfidy.
Accountability is
real. However, when society invented the board as a means to oversee
corporations about 500 years ago it introduced a group dynamic that, by its
nature, often impairs a member’s individual personal sense of accountability
for the quality of shared governance. This judge found one solution!(Originally post on our website 1/2/2013)
RMB
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