169. The Challenge of “Information Asymmetry” for Church Board Chairs.

I came across this phrase “information asymmetry” recently in some reading I was doing about board operations. It refers to the common inequality of knowledge, experience, skill and giftedness among board members. No two members on your church board bring the same things to the table.

Within church contexts we rely upon the qualifications defined by Paul in 1 Timothy 3:1-7 as the primary criteria used to discern a person’s suitability for serving as a church board member. If the person happens to bring other knowledge, experience, skill or giftedness into that role, it is almost a bonus. Perhaps informally congregations select such leaders with a view to other competencies, but if this is the case, it usually is not overtly advertised.

And so at the beginning of the church year, when the newly constituted church board gathers, the chair person will need to assess carefully what mix of knowledge, experience, skill and giftedness now resources this board room. And further, how can the chair facilitate appropriate, respectful, and valuable contributions from every board member in order to advance the mission? The problem of “information asymmetry” creates challenges and tensions.

Corporate boards recognize this problem. In the recent 2012 Board Practices Report prepared by the Society of Corporate Secretaries and Governance Professionals and the Deloitte Center for Corporate Governance they noted that boards seeking new members place “industry knowledge” as the primary skill and experience desired. Obviously they are seeking people who understand their industry and can bring the best possible advice into their board’s deliberations for the good of the corporation. They recognize that without such knowledgeable members, “information asymmetry” will impair their board’s ability to make good decisions. When the majority of board members do not understand the nature of the industry, boards become too dependent upon management, minority opinions in the board can dominate, and boards members do not feel equipped to make the tough decisions. Along with this competence is experience as a corporate leader (i.e. CEO, COO, etc.).

Information asymmetry is a reality within church boards. Consider the following scenarios:

  • A lead pastor is a member of the church board. He brings fifteen years of church leadership experience, a graduate theology degree, and vocational competence into the board. What other board member can match this grasp of the church and its operations. When proposals emerge or other theological issues (e.g. policy on marriage, divorce and remarriage), other board members automatically will defer to the lead pastor’s perspective. After all, he is the expert.
  • It’s audit time. Ralph, who is a chartered accountant and church board member, always gets tagged with chairing the audit committee. Who else has the financial acumen to do this? The other board members depend upon Ralph to do things right when it comes to fiscal accountability. But what happens if Ralph makes a mistake and the other board members are unaware of it? Who’s at fault?
  • George becomes a member of the church board. He has extensive non-profit charity board experience. His first two meetings with the church board seem like a nightmare. In his view the church board lacks knowledge and understanding of how a board should operate. He offers to assist the chair in training the board and implementing better operational practices. Three other long-standing church board members take offense at these suggestions, perceiving them to be serious criticism of their work.

I am all for variety within a church board — it can be a huge asset. However, it only serves to strengthen the board when the chair knows how to bring this diverse knowledge, experience and giftedness into coherent application. The chairperson is like the conductor of an orchestra, utilizing all of the amazing tones, sounds, and rhythms generated by various instruments to produce wonderful music. They all have the same musical score, but the parts the instrumentalists play are quite different. This asymmetry becomes a strength not a weakness through the leadership of the conductor and the cooperation of each board member.

It is quite probable that other board members are unaware of the range of experience, knowledge and skill other members possess. Schedule a few moments in the agenda of the first meeting of the new year for members to share something of their background. Many will be reluctant to be specific, but encourage them. They are not “blowing their own horn,” but enabling the whole board to function well together. This is important knowledge.

Not every board member needs to have the same knowledge, skill or experience. However, each board members must have sufficient understanding of the nature of the church and its operations in order to apply their knowledge, skill and experience to advance the mission. Many board members think that just because they have participated in congregational life for many years they understand how a congregation should be lead. They may understand some parts of it, but not the whole. Board members need to grasp the big picture and for most this requires some serious learning.




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