Governance as leadership


As a knowledge hub, the CEF puts its primary focus on learning: capturing, packaging and sharing knowledge among our stakeholders. They are not only participants who attend and directly benefit from our learning initiatives but also members of our governance structure, the Governing and Advisory Boards, our coordinators and the CEF staff.

The CEF Governing Board is the decision-making body, comprising finance ministers and central bank governors of our member countries. As influential, high-powered and experienced individuals, they present an unprecedented potential and opportunity for a young and dynamic international organization such as the CEF. That is why we have started to dedicate more attention to the Board – its role, engagement and impact – with the aim to enhance the governance of the CEF.

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2016 Annual Governing Board Meeting

Why? Our underlying non-technical focus of acting as a knowledge hub in the very technical areas of public financial management, tax policy and administration, and central banking lies in leadership. More precisely, leadership for managing reforms. If leadership is what we promote, then this is also what our stakeholders expect from us.

Governance as leadership consists of three modes in a typical non-profit institution. First, fiduciary governance that is concerned with the institution’s accountability, performance, and compliance with regulations. Second, strategic governance, enabling the Governing Board and managers to set priorities and deploy resources. Third, generative governance where the boards provide a less recognized but critical source of leadership. Institutions usually embrace and practice their fiduciary and strategic roles. This also used to be the case with the CEF, as generative work (thinking, learning) to influence our organization has been used by nearly everyone else except for our Governing Board.

The reason is that we locate too much power and opportunity in three organizational processes – mission setting, strategy development and problem solving – which are all very powerful. However, the fourth process, generative work and thinking, is actually more powerful and precedes the others, or rather, it generates them. It is hard to define (or limit) generative thinking and work, as we tend to see and appreciate its results, but we have little sense of how it is done. It is about sense-making, framing of problems and opportunities, and having wisdom, insight, creativity, and shift of paradigm.

Governance as leadership is a collective act. It is about collaboration between the Governing Board and the management, and connecting the organization’s formal governing process with the powerful but largely informal process of generative work that demands a fusion of thinking; that is, brainstorming, thinking outside the box, and harnessing a diversity of perspectives.

The CEF Governing Board (and boards in general) is ideally positioned for generative governing work for three reasons: power – the Board as the authority and decision-making body; plurality –generative work thrives among participants with different perspectives; and position – board members are at the edge of the CEF but close enough to understand our direction, focus, and culture, yet far enough to have some detachment.

In practice, this means, for instance, that we involve the Governing Board in decision-making early enough, so that they have a say and a chance to give guidance (e.g. in the design of our programs). We hold the Governing Board meetings in the form of participatory deliberations and discussions, and there are also many other “tools” that we have not used yet.

Last but not least, to achieve governance as leadership is a (learning) process that needs constant attention and acting outside the comfort zone.

 

References

Chait, Ryan and Taylor: Governance as Leadership: Reframing the Work of Nonprofit Board, John Wiley and Sons, Hoboken, New Jersey, 2005.

William P. Ryan: Distinguishing a Board’s Steering and Rowing Work, 2008.

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