Episode Transcript
[00:00:00] Speaker A: Hi, it's Steve Vindig at Sport Law. Leave me a message. I'll get back to you as soon as I can.
[00:00:06] Speaker B: Hey, Steve, it's Dina. You aren't going to believe what just came across my desk. We need to chat. Give me a call.
Welcome to Sportopia. We're so excited to share our knowledge and have conversations about healthy human sport.
[00:00:47] Speaker A: Today, we're going to talk about the importance of maintaining a healthy relationship between senior staff and volunteer directors. Not surprisingly, some of the most challenging aspects of leading is to ensure that decision makers have a shared vision of where the organization is heading, a common sense of purpose and collective values that reflect who we're serving. One of the ways to mitigate the risk of conflict between the CEO and their board is to have a clear understanding of their respective roles and responsibilities. But before we get into the meat and potatoes, Dina, what is coming across your desk this week?
[00:01:25] Speaker B: Well, I just love that we're going to be talking about roles and responsibilities, because I'm having several conversations this week with leaders.
Some of them are directors.
So the chair who's really wanting to ensure that they are setting an agenda for success in 2026, and so they really want to get clear on what matters most to them and to ensure that they are acting, they being the board, is acting in the best interest of the people who elected them. And also wanting know, well, what more can I do to ensure that healthy relationship with the CEO?
And then I'm also having a coaching conversation later this week with a CEO who wants to and has been granted a budget to do some deeper developmental work. So really focusing on cultures, Steve, on ensuring that they're living into their values, that the staff is feeling supported and recognized.
So I'm, as you know, very excited because these are the kind of proactive, holistic solutions that we feel is going to help mitigate some of the risks that are happening in sport that I feel are preventable.
What about you? What's coming across your desk before I.
[00:02:40] Speaker A: Before I discuss that, Dina, one of the things that you just spoke about that I love asking, and sometimes I say it rhetorically because I don't want to put people into a difficult position. But I like to say to directors is, how do you know you've been successful after your term or half your term or the first year of your term, the second year? And most of the time the answer is, I don't know. So I really enjoy when people have the answer to say, this is what we're focusing on this year. And this is how we know we're going to be successful. I also like to say we are not everything for everybody. So again, trying to narrow down the goals and objectives of the org is really important to me.
From what's coming across my desk is contracts.
And I always say, or maybe I don't say, but I think that things always come in threes. So just even today I got a couple contract reviews and last week I had a client reach out who was looking at terminating or ending the relationship with one of their staff people. It just wasn't working out. And my first question always back to them is, can you send me their contract?
Oh, well, we don't have one. Or we, we do have one, but we're not sure it was ever signed.
And in this particular case it was an unsigned contract where they treated the individual like an independent contractor, but the contractor included tons of language which we would apply to an employee.
So now we are in what I like to call the gray zone and we're going to try and facilitate the best way of managing this issue.
But of course having a proper contract in place, properly reviewed in advance of execution is always the best way to move forward in these areas. So we call it the 9010 rule, I should probably call it the 99.1percent rule where it'll cost you resources, money and time. 1% if you're proactive versus 99% if you're reactive. And that's the situation that we have today.
So we will get through it. But it, of course it's always simpler when there's a document.
My favorite saying is of course, what does your policy say? So what does your contract say?
Which would give us some guidance. But that, that's what's coming across my desk this week.
[00:05:03] Speaker B: You know Steve, I, what I appreciate about that is one of my coaches, I'm taking you back a moment now. Used to say do the hard work first.
So this is the daily, you know, actions that we're doing to invest in good practice. And if you don't have a contract, what I love about contracts, it's basically articulating the commitment between, you know, us, the employer and then the employees who we owe a duty of care towards. And contracts, the best possible contracts are not one sided. They provide clarity. They let you know what happens if the organization wants to part ways.
They are clear on the remuneration and the expectations and the roles and decision making and communication. So for me, contracts are such a fundamental part of ensuring really healthy relationships as things evolve. So I'm glad to hear that they have someone like you that's helping them ensure that they're fulfilling their responsibilities as leaders.
So Steve, why are we talking about this topic?
A strengthened relationship between board and staff and what happens when we don't ensure that that the staff and the board have clarity.
[00:06:19] Speaker A: So I always like to provide tangible examples. And the reason we're talking about this today is again just a couple phone calls I've received over the last couple weeks where one CEO reached out to me to pick my brain about reestablishing or reintegrating the relationship between the board and the senior staff person, in this case the CEO, where the board started getting into operational discussions and literally deciding what tournaments the organization would attend, would run, would manage rather than leaving that within the purview of the CEO. As a lot of our listeners would have heard us say before. We like to see the board responsible for governance strategy, budget, policy development, what I like to jokingly call the boring stuff and the operational is the responsibility if you're lucky enough to have staff. Now we recognize a lot of the organizations that we work with may not have the luxury of staff or it's one part time staff, but we're talking in this particular situation, it's an organization with, I'm going to say 10 staff where that operational aspect should be able to be managed within, within the operational staffing side.
And the alternative happened to a second call I got where the board was actually staying within their purview of governance and particularly policy development, yet they weren't engaging the staff in the development of that policy. So the staff was a little bewildered as to they're being handed these policies to which they haven't had input or conversation or discussion or sharing of their previous experience to help frame that policy.
So, so it was this misalignment, miscommunication where in one situation the board's very much involved in operations and dictating to the CEO what they will operate. And then the second example where it is their purview of developing policy but was not engaging the staff who had the responsibility of implementing those policies and saying like you're giving us something that may or may not work, we just don't know. But you're not giving us the chance to have our input.
[00:08:37] Speaker B: Yeah, I can feel why and how that would cause sleepless nights for the CEO. And usually we get called by the CEO or the executive director. That's typically who contacts us. Unless of course you're a board who also then has to manage the affairs of the organization, because you have no paid staff.
And so for me, when I hear you speak about the central importance of this, I mean, one of the things that we've done is we created this online learning tool, right? Governance essentials.
And when we reflect back on why we did this, it's because all roads lead back to, you know, accurate information about what is my role, what are the expectations of my role, and then how do I nurture these really strong alliances between myself and my other directors? How do I ensure I'm fulfilling my role as a fiduciary, as an elected person, right. By the members of the registered participants or membership? And then what am I doing to contribute, to help support the staff in ensuring that they feel respected, safe, and that they have a sense that we are here to help them support the mission of the organization, safe. So, you know, I think some of the warning signs that can cause friction between board and staff. And I'd love to hear what your thoughts are, Steve, you know, early indicators, right? Like what are the things that are really that we can predict are going to contribute to tough relationships? Well, it's what you're not doing. So I often say to a CEO, what are you doing to ensure that you and the board have a shared sense of what the fundamental purposes of the organization and the strategic plan is? That linking document between the staff and the board. Right. It should be reported against. There should be clarity on what those key performance indicators are. There should be a clear sense by the CEO of what the expectations are of the board for their performance.
And so some of the friction happens when, for instance, I'll give you a really practical one, when the board of directors start overreaching, bypassing the CEO and start having conversations with the staff.
And this can happen innocently at first, especially if that board of director, that director is also on a committee that's reporting into a staff person.
And for the staff person, they get really, it's very difficult for them because in one sense, that contributor, that volunteer, is on the board. So they are by proxy their boss. Right? It's not just the CEO, it's really the directors. And then on the other hand, they are there as a committee member, and so they are reporting into that staff person. It can make things really, really tense. So that's one area of friction. Steve, what about you?
[00:11:49] Speaker A: I mean, absolutely, I do want to respond to that, Dina, and just maybe talk about some of the tools to support those situations. And same thing again, just literally last week got a call from a client whom the president was retired, borderline retired, and had some expertise that could assist the organization in a paid role.
So we had this circular reporting structure. So the CEO reports to the president overall, but now because the president is taking on an operational contract, they report to the CEO.
So obviously that gets really, really confusing. And of course, my suggestion around managing that is, as you've alluded to, is just clear policy, clear documentation on responsibilities. And some of those policies will take different forms. So there's policies themselves, then there's job descriptions, then there's committee terms of reference, and lastly, executive limitations. One of the, we don't see it very often, maybe for larger organizations where the executive limitations is the CEO does everything except what's in this policy, which, which is great because we want clarity.
Or in addition to sometimes we draft governance manuals where we literally say by bullet form, the board will do these 10 things, the CEO, CEO will do these 10 things.
So we can always revert back in the case of conflict or perception of conflict to say, like, whose responsibility is this?
And the other thing that I think is really important is having champions. And we've. I share my own story. I sat on a board once and the marketing staff person came and did a report and said all the marketing they had done that month for the organization and they had bought ads on this website and lit up physical signs on these streets in Toronto and somebody put their hand up and said, well, why didn't you put one on Yonge Street? Or why didn't you put one on Dufferin Street?
And I wanted to bang my head a little bit against the table. But I also hoped that the chair of the meeting would say, thank you, Michael, for the question, but that's an operational conversation that if you'd like to have it, you can facilitate that through the CEO. But instead we spent 15 minutes talking about signposts, postage in, in Toronto, which to me didn't make a lot of sense. So having a champion, preventing or limiting or minimizing conversations, I think is, is really important in those situations.
[00:14:29] Speaker B: I agree, Steve. It's what you're pointing to is the importance of disciplining yourself to focus on what the organization is going to do if you're the director, right?
Not how.
How is the purview of the staff. And so it's just the discipline. What you're pointing to is can I be disciplined as a director to stay focused on the what and not the how.
So I would also offer one of the warning signs is the quality of the agenda.
So if I want to Know is the organization, how is the relationship between the CEO and their board?
One of the things I'll ask for is can you share an example of a recent agenda? And I can predict where there's going to be tensions just by looking at the agenda. Right.
So some of the things that we want to do is ensure clarity. We want to ensure that there's usually a conversation about the strategic plan, some kind of update around that, that we give room for conversations around risks. And we are updating our risk register. Right. Based, at least I would say at a minimum we once a year. But in more complex times, as we are finding ourselves in now, I would say, you know, the new minimum should be three times a year. You're reviewing your risk register for those high level risk that could be catastrophic to the organization. Right.
So that's one thing I would say that the organization a predictor of good relationship is the agenda.
[00:16:01] Speaker A: Any other, I mean, no. I want to add to that, Dina, you know, when we look at the fiduciary and legal responsibility of a director to make decisions in the best interest of the organization to do so in the same skill and expertise of somebody in similar circumstance.
But there's also statutory liability with respect to the payment of source deductions or staff wages or staff vacation pay.
So I always recommend trying to divide the meeting into almost two parts now, particularly if you're an operational board or a hybrid board, where you are getting into that, that operational side is dividing into two. So first, let's take the first hour and talk about governance. How are we doing on what policies do we need to review and approve? How are we doing on our strat plan? How are we doing on our budget? Have we paid our staff? Have we paid our insurance premiums? Have we, you know, taken care of these high level things?
And I rarely see that at a board meeting. And those liabilities vest personally on people sometimes outside of the corporate shield. So you, Dina, if you're on a board, a not for profit board, you are personally responsible to make sure your staff are paid. Are you asking for proof that the staff have been paid? Are you asking for proof that the source deductions have been made? Because if they're not, and depending on the financial viability of the organization, there could be some personal liability there. So I want to know, and to be blunt, I always tell people like you're volunteering your time, don't lose your house because you volunteered your time for a soccer club or a ring at club or whatever. It happens to be so do those things on the opera, sorry, on the governance side of the board meeting. And if you do happen to have an operational component to the board, move it to the part B.
Where are the tournaments? Who's driving? How much is the bus cost?
Where are we staying for hotels?
But divide it up. And if you're a governance only board, well, you don't need the second half. You're going to rely on the report from the CEO to let you know how things are going.
[00:18:10] Speaker B: It's so true, Steve. And for people who are listening, when we first started, there's something out there. Insurance, so you don't lose your house because you're volunteering.
There's insurance called directors and officers liability insurance.
And when we started working, maybe a million dollars would have covered, and I would say five to seven years ago, it was about 2 million.
Now I'm seeing directors and officers. One of the things you should be doing if you are being asked to sit on the board, depending on, of course, on the size of the board, but really we're looking and recommending that people take out $5 million of directors and officers liability insurance. So that's one of the things you as a director should be asking, right, Steve?
[00:18:56] Speaker A: I mean, 100. You need to ask that question, you know, when we.
Again, I don't think people necessarily know the right questions. When I interview board members at a board training or at an annual general meeting, you know, why are you here? Well, my son plays, my daughter plays, I played. I want to give back to the sport. Okay. And I support that a million times over. But, you know, do you also understand what you're getting into and are the proper protections in place for you? And you brought up DNo, Dina, what's interesting is most general liability, somebody gets hurt, they sue. That's protected, usually through your provincial territorial sport insurance or your national sport insurance. But what you're speaking about, dno, is usually an add on, meaning that the organization has to buy it outside of their PTO or their nso. And I don't know if a lot of people do that or have the knowledge of asking that question as to whether it exists or not. So I totally, absolutely agree with that. You know, as we're talking about this, Dina, I want to know your thoughts about, let's call it a rogue CEO who decides they're going to run 12 tournaments and cost the organization $2 million to which they don't have.
So we talk about, usually we kind of talk about it more from the overreaching board perspective because it's more fun to talk about operational issues than governance issues.
But what about the other way around?
[00:20:23] Speaker B: Well, it's music to my ears because then my question to the board before answering the what we're doing is what's the level of oversight that you are ensuring that you are maintaining with the CEO? So I would say a common practice right now that I'm seeing even in multi million dollar companies is the strength of the relationship between the elected the board chair or president and the senior most staff person, which is the ED or the CEO.
So it's not surprising. Maybe it is to some, but I would say Most of the CEOs that I'm supporting as a leadership coach, they are having weekly coffee chats with their president.
And so for the president to ensure that they have that kind of ongoing relationship, that they have access, you know, a board portal, for instance, where they have access to the financials would be another way to help mitigate those risks. And that you are, you have someone with financial literacy as your, either as an accountant, who's working as a staff person, a CPA or on the board that you have someone with the accounting acumen, acumen and certification so that they have a deeper understanding of financial, so it reduces the risks of people over committing and overextending the organization.
And then you know, to have the harder conversations. If you are not happy with the way in which the CEO is executing on the strategic plan in the absence of having that kind of document, Steve, you can see how the CEO might decide and determine that this is in the best interest of the organization.
So I think this really healthy oversight on behalf of membership is one way to help mitigate that risk. What else is coming up for you?
[00:22:24] Speaker A: And I agree with you, Dean. I think there has to be a continual open dialogue. Again, usually it's the CEO, the executive director, the chair, the president, whatever their portfolios happen to be so that there's nothing shocking that comes forward.
But I do think there has to be. It's a bit of a gray zone and I guess I say that in a good way and a bad way.
At the end of the day, the authority of the organization starts with the board and they pass that authority out through contract and committees and in terms of reference and job descriptions and things like that. But the liability does sit with the board. So if you do have a bit of a call it a rogue CEO, I do think that board has to have the ability to make decisions in the best interest as to their legal duty, in the best interest of the org. So I agree, it's this. It's finding the sweet spot of everybody staying in their lane, but also potentially having the ability in a very catastrophic situation to be able to overrule. But I think that's obviously the rarity and not the norm. So I agree with you. I think it's just common communication, no surprises.
Yeah. And then again, you're setting yourself up for success from a policy perspective, an agenda perspective, and an education.
Because again, at board meetings, when you have to be, it's almost strategic as to what the CEO talks about. Because if you talk about it, the board members are going to have an opinion about it. And that's not a bad thing, as long as, again, they understand their purview versus the, the CEOs purview.
[00:24:02] Speaker B: Yeah. And, and Steve, I, I appreciate that because you're speaking about what's a matter of preference. And if you're going to bring it on the table and you're asking the board for their thoughts on something, you know, that some of the times they're going to be talking about at a level of preference versus really having discussions and debates at a matter of principle. And that's where it gets sticky. So if you have, you know, clarity on your role and responsibility as both staff and board, if you come to the table educated, if you have linking objects like key performance indicators, risk registers, strategic plans, it becomes a lot easier to have these focused conversations that are going to help to grow the organization while mitigating risk. If you have these contracts in place that are clear about the executive limitations of the staff, you'll reduce the likelihood that the staff person will go rogue. Right. Without these checks and balances. And I would say the one thing we didn't talk about here, and it's near and dear to my heart, is respectful communication.
So sometimes, you know, if a board of director, if there's a disgruntled member, you know, they find their way to the board and then the board gets involved. Right. Because that director wants to make sure that that person is being attended to. And that's great. But I would say the first line of, you know, of offense is really good defense. And I would say to the director, have the discipline to not overstep and get involved in the middle. Have the discipline, the trust and the reflex to say, you know, so and so I really appreciate you reaching out. I'll ensure that the staff person. Right, the CEO will reach out and make sure that your concern is addressed as opposed to getting involved and wanting to deal with it themselves.
And I would say, finally, you know, the board has to remember to speak with one voice.
Right. So that as a board, one question to ask the director, the chairperson, is, what are you doing to ensure that your board is running optimally, that you are ensuring that everyone around the table has a shared sense of, you know, mission, vision and values, that people are feeling respected, that you yourself as an entity have clarity on what you're doing to contribute to the mission of the organization. Like really setting an agenda for what are we doing? What are our own goals and objectives over the coming year, for an instance. So if we do those things, my hope is that this tension which can arise between board and staff is mitigated. Any final thoughts?
[00:26:37] Speaker A: Steve, you. You've raised a whole nother podcast. You know, my mind, imagine that. Yeah, my mind's going to, you know, the nomination process of directors, and I've been a part of tens of nominations committees and, you know, you ask the question and, you know, hi, Dino, why do you want to be on the board? Well, I'm an official and I want to advocate for the officials or I'm a financial expert and I want to do the bookkeeping of the organization. Well, wait a second. I don't need operational. I have 50 staff. I have 30 staff. I have 10 staff.
Those are the people usually we screen out because they're looking for more of an operational role. And being descriptive as to what kind of board member we want is really important. So I do think nominations is important. I agree with you. Education, communication, and we talk over and over again about policy. And the reason we love policy is it gives us a roadmap to manage issues. And when we get involved in complaints or crisis management, I don't spend that much time trying to solve the problem. I spend a lot of the time trying to find the process that will lead us to the yellow brick road to solve the problem, which will usually do that itself if we follow the process. So anyway, I'm with you, Dina, on all of these recommendations. And hopefully people spend a little bit of time thinking about the way in which they want to govern and the way in which they want to work with staff and to move in the right direction.
[00:28:09] Speaker B: Well, I would say amen, Steve. And I think it's really incumbent, which is governance essentials as a tool to help ensure people have the basic fundamental knowledge of what it is that they need to know as directors.
And importantly, we would also say staff also needs to know, not just the senior level staff. I think it's really a very effective way of ensuring that the next level of staff like managers and coordinators for them to also understand the fundamentals of the structure that underpins their organization.
So it really is a gift to the organization to the effectiveness to be more proactive, not reactive if people you know have the knowledge they need so that they can serve fully in their role.
So thanks again Steve for you know this very enlightening conversation.
In the episode notes below you'll find some spor law blogs where you can find more information related to our conversation today. Thank you so much to our listeners. We're so grateful to share our vision of so Sportopia with you as we all look to elevate sport.
[00:29:20] Speaker A: As always to have your say in Sportopia, email us at hello Sportlaw CA to let us know what you want to hear about next. Have a wonderful day and we look forward to connecting with you again on our next podcast.
[00:29:33] Speaker B: Until then be well.
[00:29:43] Speaker A: It.
