Micro-management is chief among complaints of CEO's about their boards and can have a substantial negative impact on morale, productivity and CEO retention.

So, what are the root causes and how do we solve this?

Many consider the root cause to be lack of clear understanding of board vs. management role. Although this is often a major contributor, I have seen many boards once trained on role to continue micro-management. Thus, there must be a root cause that lies below. If your role is not clear to you, however, micro-management is a likely outcome. For a solution here, complete the Board Management Roles Worksheet and Answers and read Purpose, Responsibilities and Tasks of the Governing Board.

So, what lies below not understanding roles?

The Diagnosis

1. Lack of trust or fear of failure
   This can stem from personal disasters of directors, former crisis for the organization, eroding trust in management or the fact that negative politics is playing well to those electing directors, i.e. politics.
2. Lack of effective tools for fueling true role
   Board's know that they need to control something and do something. If they lack effective tools to set direction (plan), establish clear rules (set policy) or understand the true condition of the organization (evaluate), then they will engage in what I call, “miscontrol”. That is, they will control the wrong things.

For example, not knowing how to set or affirm strategy, the board will defer to management and instead control who gets to go to training or what kind of vehicle should be purchased. Not understanding financial statements and ratios, the board will micro-manage the budget. Not having data or understanding trends that determine the future of the organization, the board becomes fearful of supporting change.

Lacking good tools, the board has essentially abnegated true control of the organization to management. The board has substituted micro-management for leadership.

The Cure

1. For lack of trust or fear
   The cure is communication. Make the unknown known to the extent you can. This means management clearly communicating the impact on the organization of this fear, respecting that it is a normal reaction to past crisis or lack of knowledge and then working with the board to design solutions. Solutions will come in the form of improved communication and better governance tools.
2. Lack of effective tools
   1. Effective strategic plan and plan monitoring system
      Read Components of an Effective Planning System for more information on this. Planning is the tool for controlling the future. Setting direction is the foundation of sound governance. But you must monitor results against plan and take corrective steps as needed.
   2. Clear, comprehensive set of board policies
      Your expectations about service delivery/product quality, your financial parameters, your reporting requirements, authorities of committees and CEO, standards for evaluation, standards for considering new investment, etc. etc. all should be contained in a single set of board policies. Of course, you have to monitor adherence but making clear the rules, i.e. your expectations, will relieve your anxieties about what may or may not be happening inside the organization. It puts you in control, or leading vs. managing.
   3. Trend data with which to evaluate performance
      Financial data tells you what has occurred. You need to get a handle of what will occur and proactively respond to it. The key here is what we call an Instrument Panel (referred to in the literature as Balanced Scorecard). It should contain measures of progress toward vision, customer satisfiers or key results and core processes that drive both the satisfiers and the vision. For more information on this tool, read The Organization’s Instrument Panel.
   These three tools, if done well, will put you in greater control of the future vs. only reacting to what you have learned from what has already occurred. It will also relieve your fear of the unknown and ultimately cure the ills of micro-managing.