With TABS the Board is the “balance point” between owners and managers. The Board keeps the owners and managers “in balance” by making sure that these two working groups solve their distinct issues and problems. The Board does this by owning the process of directing the managers and owners to address and resolve their respective issues and problems. The Board does not, nor should not, own the result. A Director should act as a third party with no self interest in any decision made or any plan that is accepted.
Directing Management. The Board directs management by helping the managers discharge their distinct responsibilities. One responsibility of managers is to develop and implement strategic and annual plans for the overall well-being of the company that are consistent with the values, needs, and goals of the owners. Another responsibility is to manage the company in such a way that meets these values, needs, and goals of the owners and is consistent with the company’s current strategic and annual plans. Directing management is generally understood and accepted, since overseeing management is inherent in a Board’s legal responsibilities. In fact, this is typically the only responsibility a Board is thought to have. TABS, though, extends the Board’s role to directing owners.
Directing Owners. In addition to directing managers, an effective Board “directs” the owners, which means holding owners accountable to complete their unique ownership responsibilities. The primary responsibilities of the owners include the following:
- Understanding and agreeing how the owners will do their work and what the owners want from the Board and management;
- Identifying the owners’ values, needs, and goals as a single owners plan;
- Including succession and transition plans as part of the owners’ plan;
- Reviewing the owners’ understandings and agreements and the owners’ plan at least annually and communicating their plan to the Board;
- Electing qualified directors;
- Staying knowledgeable about the company and the functions of the owners, Board, and managers; and
- Making sure the Board is fulfilling its responsibilities.