Governance as a Risk Area

Independent and international school boards are rightly focusing on risk, specifically, understanding the risks incurred by the schools they govern and how school management approaches mitigation and containment. We think board engagement with risk is long overdue and something that every governing body should take seriously, but what about governance itself as a risk area? How many risk analyses include board conduct along with student travel, swimming pools, and adult-student misconduct?

Boards can add or subtract value from the schools they govern. Risk comes into play when the board value-add becomes negative, either by unnecessarily consuming precious management bandwidth or by creating instability in the school. A sampling of the ways boards create risk—in ascending order of their likelihood—looks something like the list below.

• Failure to provide proper fiduciary oversight.

• Conflicts of interest.

• Compliance/legal.

• Failure to update and follow bylaws.

• Failure to engage in strategic thinking.

• Disconnection between boardroom and institutional purpose/mission.

• Individual members directing administrators.

• Inappropriate engagement with parents or teachers.

• Rapid churn of board membership.

• Failure to preserve the confidentiality of boardroom discussions.

• Antagonistic relationship with school administration.

While damaging to be sure, the obvious risk areas, such as conflicts of interest or inattention to fiduciary responsibilities, are less frequently occurring than aspects of how the board governs. We find that many board members believe micromanagement or having an adversarial relationship with the head of school is good governance. Neither of these behaviors adds value, and both have the potential to cost significant management time and, in extreme cases, money.

Does your board pay attention to risk? And does it include governance itself among the risks to analyze?