Most executives have superiors, peers, subordinates, customers, allies, and suppliers – multiple roles in the same job. And that’s true even before we take into account the executives holding down multiple jobs in the same firm at the same time. While you are always the same person, the difference in your remits in different roles requires you to think, act and communicate differently in those different roles. Hence the need to clarify which role your are playing at any one time.
Different Roles
For example, one lawyer is a litigator, head of her office location, and on her company’s board.
When she’s working for a client, her duty of care is to that client, following firm and office policy in a manner best suited for her client.
When she’s playing the role of head of her office, her duty of care is the people in the office, following firm policy in a manner best suited for the office.
When she’s playing the role of board member, her duty of care is the firm as a whole. She has to be ready, able and willing to subordinate her individual client, function and office needs to the good of the firm.
Different Activities with the Same Role
Managers flip back and forth between providing direction to be followed and input to be taken into consideration on a regular basis. It’s critical for them and those they are interacting with to be clear and aligned on which role they’re playing at each moment.
They should adopt and use the same words every time:
“Here’s my input or coaching which you should take into account if it’s helpful. To be clear, this is your decision, not mine.”
“Here’s my decision or direction which you should follow. To be clear, this is my decision, not yours.”
And the people working for them should push back if things are not clear.
“That sounds like input into my decision. To be clear, this is my decision to make. Right?”
“That sounds like a decision. To be clear, you’re directing me to do what you just said. Right?”
And, oh-by-the-way, decision rights come with accountability for the results of that decision.
Board Roles
In general, boards are accountable for governance and oversight. They approve strategic, annual operating (P&L, cash flows, balance sheet), future capability, succession, contingency and compensation plans, and are consulted and informed on everything else. More specifically:
Public boards have fiduciary duties of care and loyalty in the best interest of their corporations and of all their shareholders and stakeholders including customers, employees, suppliers, and communities. These boards are subject to the strictest public regulation and scrutiny even beyond their traditional fiduciary responsibilities (legal, regulatory, audit, compliance, risk, and performance reporting) to their input into strategy, M&A, technology, culture, talent, resilience and external communications.
Private Fiduciary boards represent the owners of non-public companies. While they are not subject to all the regulations and scrutiny that boards of public companies face, they are subject to many of them and must look out for the interests of all the owners, debt holders and stakeholders.
Private Non-Fiduciary boards are really advisory boards. While the controlling owners may vest board members with some decision rights, those owners can overrule board members at any time and thus maintain the real fiduciary responsibility. Those owners may be private equity firms, families, or individuals. Their organizations may be operating with different levels of maturity. In particular, early-stage companies come with their own special sets of issues and opportunities.
Non-profit board members serve different roles across governance, getting or giving money, representing stakeholders, making connections, an contributing their own advice or time.
But all boards are made up of people. And those people come with their own strengths, gaps, and preconceived notions. Over and over again we see operating executives going on to boards and acting like they are still operating executives. They’re not. They are there to provide governance oversight in some cases and advice and counsel in other cases.
While it’s harder for an operating executive to push back on a board member if it’s not clear what role the board member is playing at that moment is not clear, it’s all the more important they or you do so for all the reasons above.
