Balance — Board has Authority — Management Has Knowledge. Canada 150 Recommendation #77
The balance of power between the board and management can be a delicate thing.
The board sets the strategic direction of the organization and management implements it. This is the mantra for many organizations that have staff.
However, it is management who has the day-to-day detailed knowledge about the organization and it is the board who actually has all the authority to make decisions, including replacing management.
How do organizations find the balance of giving the board enough information to do their work effectively? This is the governance challenge.
If your board and management are both trained in governance principles and both agree that the health of the organization is the common goal — then you will have little trouble agreeing and adjusting this balance. There has to be trust between the board and management. Without trust you end up with a power struggle and cases of management only giving the board what they ask for — not what they need.
Everyone involved has to put the organization first and adopt a framework that allows the board and management to work together effectively.