Unity of Control – Why It Matters to a Healthy Board-CEO Relationship

Our firm helps organizations of all kinds improve their governance – corporations, non-profits, public agencies. One of the keys to a healthy relationship is unity of control.  

Unity of control is the idea that it is the Board of Directors as a body that makes decisions for the organization – not individual Board members. It sounds straightforward, but it isn’t. Board members are often important community leaders with specific things they want to accomplish, whether it’s improving quality, or lowering costs, or delivering specific services. They may all be jockeying to control the direction of the agency and where it focuses its energy. In many cases,  the loudest voice prevails. Amid competing agendas, the chief executive may not always have a clear path forward. 

Consider this example: An agency dedicated to feeding the hungry has a divided Board: at least three board members want to focus on increasing the number of food distribution centers. Several other Board members want to focus on policy advocacy, expanding state and local programs to fight hunger. A third group wants to focus on raising money for hungry families in their neighborhoods.   

All of these are laudable goals. But they imply different capabilities and different activities for the agency. The chief executive is frustrated by managing these different agendas. The situation comes to a head when the board chair says to her: “Can’t you do something to satisfy all three camps?” “No,” responds the CEO. “These are very different visions for what we do as an agency. I need the Board to make up its mind.”  

Here’s where the unity of control comes in. It’s the principle that only the Board, acting as a Board, can give direction to the CEO or to the agency. In tandem with other aspects of governance, the unity of control provides a fresh perspective on where the lines in the relationship are drawn.  

Here’s one example of a Unity of Control policy from the Board of a public agency. (This example has been lightly edited to focus on the important elements.) 

 “Only decisions of the Board acting as a body are binding on the Chief Executive Officer. 

Specifically: 

1. Decisions or instructions of individual Board members, officers, or committees are not binding on the CEO except in instances when the Board has specifically authorized such exercise of authority. 
2. In the case of Board members or committees requesting information or assistance without Board authorization, the CEO must refuse such requests that require, in their opinion, a material amount of staff time or funds.
3. Board members may communicate directly with agency employees or contractors.  However, the Board as a body and the Board members will never give direction to persons who report directly or indirectly to the CEO. If individual Board members are dissatisfied with the response they receive, they may seek a resolution by the Board.” 

Let’s highlight a few points in this policy. First, directions given by individual Board members “are not binding” on the CEO. A savvy CEO should be able to gracefully and diplomatically thank individual Board members for their opinion, while acknowledging it takes a Board vote and Board decision to establish – or change – direction. 

Second, the policy states that the CEO “must refuse” individual requests for information that require a material amount of staff time or funds. In our experience, a savvy CEO will always say “yes” to a reasonable request for information that does not consume too much time or distract people from doing their jobs. But this clause gives the CEO a way to say “no” to wild goose chases. 

 And lastly, it says that the Board and Board members can never give direction to managers or employees of the agency. The Board’s decisions must flow to the CEO, who is then responsible for how they get implemented. This provides protection for the CEO who experiences Board members trying to micromanage staff. It provides an avenue for the CEO to push back and say: “Please focus on giving me direction as a Board so that I can then be held responsible for how it gets implemented. If you keep trying to play my role, then you won’t be able to tell whether I’m performing well or not.”  

Taken together, the Unity of Control creates enormous clarity in defining the relationship between a Board and its CEO. However, it’s not the whole story. There are four more parts: 

First, the Board needs an avenue through which to give direction to the CEO and the organization. This can either be through a strategic plan or through strategic policies. (Our firm helps organizations develop both).  

Second, the Board needs a process through which it receives regular updates on the direction it has given the CEO. This ongoing monitoring process creates valuable feedback that cascades throughout the organization. 

Third, the Board needs to state clearly what decisions the CEO can make and what decisions the Board needs to make in areas such as procurement, asset management, and government affairs.   

Lastly, there is one more piece of policy-making that is crucial to keeping the relationship on a healthy plane – requiring that the CEO inform the Board of any significant news or circumstances affecting the organization. 

Here’s an example of that policy language:   

“The CEO shall use prudent judgment in the exercise of the delegations. If the CEO reasonably determines that an activity related to the delegations presents, regardless of the size of the financial commitment: (i) a unique and significant operational risk to the organization; (ii) a significant impact to customers; (iii) a significant impact to community relations; (iv) a significant impact to the agency’s reputation; or (v) materially compromises the policies and goals established by the Board, the CEO shall timely inform the Board and may request the Board to take appropriate actions.” 

Note that this requirement puts the burden on the CEO to initiate a conversation with the Board anytime he or she sees a change in circumstance that impacts the five areas spelled out in the policy. This “no surprises” rule requires the CEO to inform the Board and to initiate a productive discussion about the CEO’s concerns and whether the Board needs to shift direction. 

In conclusion, effective governance begins with clear roles and expectations. What is the role of a Board member? Should Board members be able to direct the organization in some way? What are the limits on what one individual decides? What is the role of the Chief Executive? What about the role of committees? Governance involves continuous clarification of all these expectations, a focus on who does what, and systems of accountability – all with the aim of helping the organization function smoothly and efficiently. 

At LRI, we help Boards and CEOs of all sorts, from public agencies and non-profits to small and large corporations, define the governance structure and business processes that help build and sustain a healthy Board-CEO relationship.  

Eric Douglas

For more than 20 years, LRI has successfully helped a wide array of government agencies, nonprofit organizations, and corporations achieve breakthroughs in performance. Eric's latest book “The Leadership Equation” shows how leaders can achieve strategic clarity, manage change effectively, and build a leadership culture.