I was reviewing the “Group of Thirty” report entitled “A Call to Action on Bank Governance” (you can google these terms and access the report directly). While banks are not churches, it is useful to consider some of the principles that they have identified regarding effective board governance. These principles can give church board members some relevant ideas to enhance church board operations. The group that developed the report consider “action to improve corporate governance at many financial institutions…as a matter of urgency.” Would that congregational leaders might develop a similar sense of urgency regarding church board operations, given the relative health of many congregations!
One of their findings is that “governance systems are defined by both hardware and software….governance systems are built around a defined architecture comprising both ‘hardware’ (e.g. organization structures and processes) and ‘software’ (e.g. people, skills and values). The software makes the hardware function.” I would suggest that this distinction when appropriately applied to church boards brings considerable clarity regarding some of the issues church boards perennially face.
Often I hear board members and pastors urging that church boards put strong emphasis upon the “software side,” even to the point of ignoring, if not totally rejecting the hardware side of things. Church is all about church and community, they argue, and the New Testament language describing church describes “family” not “corporation.” The result is that the focus is placed on informality, lead pastor directives, and the “spiritual” stuff. Attempts to introduce principles to guide operations, policies or formal decision-making processes are resisted for a variety of reasons. This focus on the “software” side of things might work for a while within a small congregation, but it will be a formula for disaster in larger church agencies.
Contrastingly, some church boards focus so much on the “hardware” side of things that they overlook the reality that they lead a “spiritual agency” and that their work is worship, guided by the Holy Spirit in pursuit of the will of God. They forget that governance is a means to an end and that the mission of the congregation and the people its serves are the important matters.
So church boards need to connect the dots well between the “hardware” and the “software” components. I would suggest that board chairs play a significant role in helping boards sort out this interplay. In particular good governance “depends upon people and how they interact.” No matter how carefully honed your systems might be they become dysfunctional when the people involved behave in dysfunctional ways. Conversely, even when board members come with the best will to make things work, church boards will fail to be effective if they disregard good systems. There has to be convergence between the “hardware” and the “software.”
One aspect of board work where this becomes particularly critical would be the board’s management of its relationship with the lead pastor. Because of the congregational ethos and various values the relationships that board members have with the lead pastor will be complex and diverse. Friendship is one dynamic, spiritual mentor/mentee would be another, professional credentials contrast with amateur understandings, and to make it even more complex there is the employer/employee context. Caring, effective and sustainable management of this relationship requires the application of both “hardware” and “software” elements.
Another area that frequently generates board dysfunction concerns decision-making processes. Unless the chairperson pays close attention both to the “hardware” and “software” aspects in order to guide board discussions to fruitful decision and implementation, the board will be fractured and fractious. Attention given to providing good information, developing good records of decisions, and defining who is responsible for implementation will pay significant dividends.
Board chairs have to give equal attention to these two board realities if they are going to serve their boards effectively.