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Berkonomics

To directors and advisors: “Noses in; fingers OUT!”

Many of us have someone who reports directly to us and who supervises others in return.  Well, this one is for you. And it is one of the most important lessons you can learn as a manager, board member, or advisor of a company or even a non-profit enterprise.

Where did this statement come from?

I first heard this in a governance seminar for a non-profit higher educational board upon which I sit, over 25 years ago.  It made an impact and stuck with me through the years.  I have repeated it often to boards deliberating action and to individual board members seeking to get their hands dirty inside the corporation by giving advice and helping at levels beneath the CEO.  (And it is interesting to hear it returned from various unrelated sources, even quoted as “Noses in; hands out.”)

The problem cannot be overstated.

Once a board member reaches beyond the CEO into the corporation, especially without the approval of the CEO, incurable damage has been done to the CEO’s ability to govern.  Even if not the intent, there is an instant change in dynamic once this line has been crossed.

There is even a gray area that illustrates this effectively.

As chairman of a company in an industry where I have extensive experience, I elected to attend a regular meeting of the management team with its middle managers on a Monday morning, a practice I had not done in the past.  The meeting was tame to say the least. The CEO spoke, shared metrics, spoke of issues to be addressed during the coming week, and did a fine job of pointing the assembled troops in the right direction. I could not have been more pleased.

My lesson learned about this mantra:

[Email readers, continue here…]   After returning to my office, I received a call from the CEO. ‘Would I please (oh, don’t take this wrong, Dave) not attend these meetings anymore?’  What I took for unusual silence was a complete disruption of the normal give and take of the management group because of my presence.  The chairmanship carries unstated power even if not overtly demonstrated, since the CEO reports to and is accountable to the board, and of course its chair.  I learned from this that there are times when members of the board are appropriately brought into an operating group, and certainly times when the board should hear from vice presidents presenting their issues in a board meeting.  But the position of CEO is absolutely to be reinforced at all costs, never to be undermined by any member or by the board as an entity.

So, what is the proper behavior?

Therefore, it is appropriate to ask tough questions, request help in understanding issues, seek permission from the CEO to interview others.  But a board member or advisor should never react to statements heard by issuing directions or hints of action in return.  It is appropriate to state that the advisor or board member understands much more after the briefing and will be able to address the problem with the board and CEO.  It is not appropriate particularly for a board member to promise any action to anyone beneath the level of CEO.  Noses in; fingers OUT.

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