By Tami Tanoue, Executive Director, CIRSA
AGRiP member pools are a diverse group, but it’s a safe bet almost all share these characteristics:
- The pool executive has a longer tenure in the organization than most governing body members.
- The pool executive devotes their entire effort to serving the organization, while governing body members have a whole other professional life that demands their attention.
- The pool executive has expertise in pooling and insurance issues, while governing body members are relied on to be “generalist” decision-makers.
There’s nothing wrong with these characteristics – in fact, they’re desirable. But, over time, these elements can contribute to a lack of detailed communication to the pool governing body, documentation that can be hard to track, and unclear lines of accountability.
How it Begins
Each pool governing body is generally made up of officials from their member entities. For each governing body member, that means pool governance is one more responsibility among a daunting array of other professional commitments. Governing body service is necessarily a part-time (and perhaps short-term) endeavor.
By contrast, pools tend to be managed by long-term executives. In addition to years of trusted service, the executive runs the pool as a full-time job, has experience in all facets of pooling operations, and manages a staff of subject-matter experts in pooling finance, underwriting, legal issues, loss control and so forth.
Naturally, governing bodies often delegate or entrust many responsibilities to the executive. And this is good! A governing body needs to focus on the “big picture” issues, and the executive should be trusted to carry out the mission competently (and to mind the details).
Delegation Accumulation Syndrome
However, over time, this can lead to something I call “delegation accumulation syndrome” – i.e., where too many matters (“keys to the castle”) have been delegated or entrusted to the pool executive.
Once the governing body lets go of something, documentation may be lost or lacking. Maybe the delegated matters themselves are forgotten. Ultimately, it may become difficult for anyone to envision the pool being any different than exactly the way it is.
In this situation, everyone becomes comfortable – maybe a bit too comfortable. The pool executive is the governing body’s most trusted professional, after all, and is paid to do the heavy lifting. So everyone’s generally OK when the executive’s attitude about many issues appears to be, “I’ve got this.”
Governing body members may also appreciate that meetings are shorter and less stressful as the need for their decision-making narrows. Agenda packets become smaller as the governing body requests “only the executive summary,” or “just the first page,” or “no more of those lengthy claims reports!”
Over time, though, accountability can erode. For example, the governing body may believe it’s in charge of determining a compensation plan and benefit structure. After all, it receives periodic revisions of the personnel regulations for governing body action.
But, if the pool executive has instituted some “unwritten” benefits that don’t appear in the personnel regulations, then an element of non-transparency has appeared – as well as a lack of accountability, not to mention an absence of documentation.
The Problem of Succession
And then, the unthinkable happens: The executive position is suddenly vacant.
Any governing body can be caught off-guard in the aftermath of such an unexpected event. But, if all of a pool’s “keys to the castle” have been handed over, it’s in a far worse spot. Those who are left behind no longer know where the keys are, where they’re supposed to go, or even how many exist.
What now? How does an organization regain transparency, accountability and control over documentation? Such an event will prompt a renewed focus and effort on everyone’s part – from the governing body on down – on inventorying the keys, seeing where they go, and making sure they’re in the right hands going forward.
To prevent your pool from falling into this situation, consider inventorying all delegated responsibilities and authorities before a crisis hits. Take a look at this transparency checklist. Add or subtract your own concerns as appropriate, but do a regular inventory of the controls that are in place (or should be) to ensure there’s appropriate transparency, accountability and documentation for the “keys to your castle.”
Contact Tami Tanoue at 720-605-6055 or email@example.com.