Step 6 – Measure and monitor the right things

Staying on track

A key aspect of the board鈥檚 stewardship responsibilities is to ensure the organisation鈥檚 performance is scrutinised and kept on track.

The board must monitor against pre-established criteria.

Unless the board establishes criteria for what it wants achieved, monitoring is likely to be disorganised, uninformed and unfair 鈥� leading to lost time, staff confusion, inefficiency and an adversarial board-chief executive relationship.

Monitoring should focus on outcomes or results, rather than how the outcomes are to be achieved.听

Monitoring versus evaluation

It is important to distinguish between monitoring and the process of evaluation.

Monitoring

Monitoring involves observing, recording and reporting information. It is retrospective.听

Evaluation

Evaluation is making a judgement, mainly to improve future performance.听

Board meetings should primarily be used to create the future, not rehash or review the past.听

Performance measures

Clear expectations need to precede performance measures.

Poorly expressed expectations will foster poor performance measures. The two main elements in establishing performance expectations are:听

desired outcomes: results to be achieved.听
planned actions: ways in which results will be achieved.

The board鈥檚 job is to specify what the organisation is to achieve.听

The chief executive determines the actions required.听

Common errors in creating performance agreements听

Reliance on feelings, instead of using demonstrated evidence听
Misuse of adjectives like 鈥榓ppropriate鈥� and 鈥榚xcellent鈥� that are imprecise听
Misuse of verbs like 鈥榩romote鈥�, 鈥榗oordinate鈥� and 鈥榝acilitate鈥� that direct attention to the action instead of the intended outcome听
Use of comparative words like 鈥榠ncrease鈥�, 鈥榠mprove鈥�, and 鈥榤ore鈥� which need a fixed reference point听
Failure to be exact听
An unreasonable expectation, e.g. 鈥榚nsure the government increases funding to the organisation鈥�.听

Scanning the environment

Many boards are inclined to focus inwards and backwards instead of forwards and outwards.

Being strategic is not something that an effective board is, or does, occasionally. The external operating environment is constantly changing and the board needs to keep focused on the future.

Periodically the board needs to:听