WHAT SHOULD NATIONAL UNION EXECUTIVE BOARDS BE DOING?
There are several kinds of executive boards in the corporate and non-profit worlds ranging from the merely ceremonial rubber stamp varieties to those that engage in the active oversight management of the organization through standing subcommittees, extensive data access, and substantive check and balance powers. While there are exceptions to this observation, all too often the ceremonial rubber stamp board exists in one of two kinds of organizations. First, they are often found where an organization is newly created or recreated after an in-house fight and the top executive needs considerable leeway to stabilize the organization to get it on a growth path. The other place they are often found is with organizations that have made very serious strategic errors and are headed for disaster largely because the chief executive or even a small group of the executive’s direct reports are stuck in group-think trap or otherwise unable to break from their traditional perspective despite new facts, developments, etc. If you doubt that, look at the demise of such corporations as Enron, Lehman Bros., Blackberry, Kodak, Polaroid, etc. In contrast, healthy organizations that have passed through their formative struggles to succeed often shift to more active executive boards so that the single-minded vision of the CEO and his/her closest staff do not unintentionally limit, or even harm, the organization. Federal sector unions need to use their boards just as actively and creatively as any organization if they want to avoid the disadvantages of an all-powerful CEO or small leadership clique running the place. Below are some ideas for what union executive boards should be doing.
Before we begin the list, however, we want to disclose a bias. We fully agree with virtually everything written in what is probably the most significant book on organizational leadership so far this century, namely, TURN THIS SHIP AROUND by David Maraquet. Its core argument is that, “Leadership should mean giving control rather than taking control and creating leaders rather than forging followers.” If you disagree with that perspective, you will probably disagree with the list below. But if you disagree ask yourself whether your unstated approach to leadership actually is, “Leadership is about controlling others and creating followers.” If so, stop reading. The remainder will only give you guilt, self-loathing, and anger issues.
BUDGETS– A ceremonial board looks at a one-page proposed budget built around vaguely labeled budget lines and gives its blessings. It acts as if no one hides money in budgets for pet projects that might be tough to defend if made public or that the entire thing is not built on assumptions that can be wildly optimistic. Union boards need to look not just at the union-wide budget, but also the budget for each department, program and priority. The same should be done with the assumptions underlying the numbers and any off-budget acquisitions. If there is an organizing drive in the future or major contract negotiation, the board should know what it is likely to cost. Moreover, the board should be kept abreast of how the budget is working throughout the year, not just at one or two board meetings a year. Most treasurers generate monthly budget analyses and there is no reason to withhold them from the board.
INVESTMENTS/ACQUISITIONS– AFGE reports that it has $17 million in investments and NTEU, which is not even one-third the size of AFGE, reports $31 million. What about those two figures suggests that union investment decisions should be left to only the national president? If your answer is anything other than “Nothing,” go google the word “millions” and any of these keywords: Lawrence Taylor, William Bud Post, Rihanna, Mark Brunell, or Nicholas Cage. (If you prefer organizational investment errors, google MF Global, WorldCom, and Washington Mutual.)
Similarly, unions can make huge acquisitions from their investments which can bring great risk or even financial bankruptcy. IT systems can easily cost large unions millions as can real estate purchases.
While some boards are comfortable only being told about major money decisions after the fact and have no need for details about setbacks that hardly seems wise. The wiser approach would be for the board to have a majority role in majority investment decisions with the union’s chief executive. Frankly, we wonder what reason the top union leader could give for including the board or even a subcommittee of it in investment and major acquisitions BEFORE they are undertaken.
TECHNOLOGY– Two decades into the information age, no one should treat technology as a minor part of an organization’s success. Technology can increase membership, improve representation, boost electoral and legislative clout, decrease costs, and reveal things about the organization that no amount of institutional knowledge will ever yield. It is huge and it deserves the same high level attention of an executive board as any other issue listed here. While a union chief executive might understand that, there is a natural reluctance to aggressively manage technology because of the very high start-up costs for a new system or program. That can throw a budget out of sync, force them to cut back of pet projects, and even make them politically vulnerable. Only board involvement can help the elected national president push through his reluctance to make bold moves. Today, unions should have systems in place that collect and analyze the distribution of promotions, awards and overtime for each unit. If a union is still relying on individual members to alert the union when OT is being passed out inequitably or a local president to spot a problem with the distribution of awards, it is operating in the information dark ages.
REPRESENTATIONAL ACTIVITY– Grievances, arbitrations, and bargaining are core functions of any union. So, it is absurd for a board not to have established critical metrics for measuring success or at least spotting problems. For example, the board should regularly examine the union’s arbitration activity to see how quickly cases are moving to a final decision, which locals are generating an inordinate number of cases, what issues are and are not being worked, costs, etc.
LEGISLATIVE ACTIVITY– Federal employees’ biggest threats these days are not their managers, but Congress and the public. Managers are more like annoying neighbors while Congress should be considered a raging psychopath on the loose in the federal neighborhood. Any union that is not shifting major resources into everything electoral, political, and legislative is making the same mistakes the folks at the helm of Kodak did who thought digital photography was not a serious threat to their film photography empire. The members of NATCA contribute a many times larger amount of money per member to their PAC than any of the other federal unions. Since it has been that way for years, obviously the national leaders of the other unions need to do something different than they have and are. The purpose of a board is to push if not force a chief executive to do something even though they do not want to no matter what the reason, e.g., it is too hard, the task does not excite me personally, I would rather spend time and money other ways, etc.
MEMBERSHIP/INCOME– Here is another bias about how we see unions. We believe the single most important measure/metric of success is membership. If a high percentage of the potential members belong, the union obviously is generating value for them, fulfilling their interests, etc. (That may not be enough over the long term, which individual members rarely consider, but it is the strongest sign of short-term success.) Conversely, if membership is low across the union or even in significant pockets of the union, something is fundamentally wrong with how the national union is being run. (This is another place where it is foolish for the union’s national leadership and board to reflexively blame the local leaders for that and move on to the board’s happy hour, catered lunch or evening festivities.) Executive boards need to look beyond the national membership metrics and spot the smaller pockets of failure, e.g., the locals in a particular unit, the members in a particular occupation such as IT professionals, etc. Moreover, they need to demand the CEO do something about those problem areas.
Here are a few hints about how to gauge how good a job the CEO is doing with problem pockets. If his plan for boosting their membership is the same plan that failed last year, then the board needs to step in and force something more effective. If the CEO’s membership building program/incentive is the same for every local in the union, it is a poor program. One size almost never fits all in complex organizations. If the CEO has not put something in place to force local leaders to be accountable to the rest of the union when their membership lags seriously, e.g., it is below 30% of potential, then the CEO is shirking. Try to imagine the CEO of Walmart going before its board without a very serious action plan to turnaround a few pockets of very underperforming stores that are a drag on the entire corporation’s profitability? Not even neighborhood book club leaders let individual participants fail to read the material without booting them to the curb—no matter how tasty their artichoke dip.
STRATEGIC PLANNING– Here is a simple, very objective way to determine whether your organization needs a more active executive board. Does it have a strategic plan covering the next five to ten years? If not, it is wildly vulnerable to ad hoc strategic decision making by the chief elected executive or his/her small group of advisors for whom it is only natural to have a “shared and traditional” perspective on how to do things and what to do. Unions will be little more than grievance and bargaining operations if their leaders do not look at all perspectives, plot changes over the long-term, measure progress and think creatively.
LEGAL COMPLIANCE– It only takes two or three legal scandals in a union to cripple it for a long time, if not close it down. While it is easy for a union’s national leaders to treat a local’s financial violations/scandal as that local’s problem rather than the larger union’s, it is also foolish to do so. Look at the impact on McDonald’s every time some cook is videoed wiping the floor with a hamburger before serving it or the Red Cross when it’s CEO, Mark Everson, impregnated a local Red Cross leader while both were married to other people. The compliance of local officers with Dept. of Labor, IRS and Civil Rights Act requirements should be treated as a big deal by the board. It should be informed whenever the national presidents learns of a problem and it should get regular reports on which locals have not filed timely reports with DOL or IRS. It is not enough to leave it to the national president to take care of. Executive boards need to oversee protection of the larger union from a few local problem leaders. Check out the DOL list of unions that have recently had local leaders caught illegally using union treasury funds and otherwise violating their laws. Each of the three major federal sector unions, i.e., AFGE, NTEU, and NATCA has incidents mentioned. IRS publishes a similar list of locals that lost their tax exempt status years ago because they failed to file timely 990s. If boards meet without a report on compliance problems they make a significant error.
Union national presidents need latitude to carry out the union’s mission, achieve its goals, and boost its power. But that does not mean they should have unlimited power or only their vision should control the union’s destiny. An executive board is a union’s method for introducing diversity of perspective and thought into the big decisions. Ironically, if a union chief executive resists developing leaders on the union’s board then why should management ever believe them when they ask for employee pre-decisional involvement in agency decisions?
Be sure to check out a companion post to this which discusses the value of letting local union presidents continue to hold that office while also serving on the union’s executive board, namely, Developing National Union Leaders From Within.
