Introducing the EA Good Governance Project
By Grayden 🔸 @ 2022-10-08T19:42 (+114)
Writing in a personal capacity. Thank you to Sanjay, Joey, Devon, Jack and David for very helpful comments prior to publication and for the highly impactful work they are doing when not being distracted by me.
TL;DR
I believe good governance is important and often underrated within EA.
I'm launching the EA Good Governance Project. Its first initiative will be a directory of EA Board candidates. If you have skills and experience to offer to an EA Board, please add your profile.
Good Governance is Important
My career as an investor has exposed me to a large variety of companies, CEOs and Boards. A good idea, a good team and a good environment don't necessarily mean success. Execution is vitally important and it's easy to go off track.
Holden Karnofsky says that "the board's #1 and most fundamental job is evaluating the CEO's performance". I do not disagree with that, but I think it is not quite as binary as he (likely accidentally) implies. Successful governance that I have seen normally means:
- There is an alignment of interest between the shareholders (equivalent to beneficiaries) and the CEO, which cascades down the organisation. On the other hand, I know many public[1] company CEOs that are very good at growing their company (and often their pay) in value-destructive ways, e.g. through overpriced acquisitions.
- The right CEO is in place for the right stage of the organisation's journey. While there are notable exceptions, start-up CEOs aren’t often good at running large organisations. When the size of the organisation changes, often the CEO needs to change. Likewise, when the external environment changes and the key success factors for the organisation change, it sometimes requires a new skillset or personality type.
- The CEO has the right team around them. I've met more than 100 large company CEOs and not one of them has it all. Good CEOs recognise their own weaknesses. The best CEOs empower people very different from them to plug the gaps. However, perfect introspection is difficult and this is one of the key areas where the Board can work closely with the CEO to ensure there are no blind spots.
- The CEO is focused on what really matters. Strategy and execution are very different. If the strategy is well defined, it should be clear what you are trying to achieve, but day-to-day matters are much more mundane. Achieving a big visions requires a lot of little choices and the CEO is often brought in to resolve the toughest of those little choices. Even if you think you are good at the bigger picture, it is always helpful to report back to people who are solely focused on the North Star[2].
Good Governance is Often Underrated within EA
The contribution of Boards is rarely discussed in EA circles. On the EA Forum, there are only 2 posts before this one tagged "non-profit governance" and few posts talk about the role of Board Members. Only a handful of organisations recruit widely for new Board members.
Why is this? Here are my hypotheses:
- EA is entrepreneurial. When there are 100 reasons the organisation can fail, then governance is not top of the list.
- Governance is often perceived to be legalistic and risk-averse. It is true that there is a certain legal minimum in most jurisdictions. However, if they are occupying the majority of the Board's time, then I would argue that the Board is not spending enough time on its core functions (unless that is fulfilled by another body).
- Many EA organisations have very concentrated sources of funding. Donors therefore often fulfil the accountability and governance functions. Donors are analogous to customers, which can wield significant influence in for-profits[3].
- EA can be too academic. The world is a lot more complex in reality. Executing a good idea is much harder than coming up with one. The right people, culture, structures and processes are more important than most people naturally assume.
- On average we are young and inexperienced. We have not yet experienced a scandal / major problem and have not yet started to think through how to avoid that happening again.
However, if we are aspiring to build large organisations that can really change the world, I don't think we should put up with these excuses.
How do we Create Effective Boards?
I think the first step towards effective boards is choosing the right board members. At the same time, I think this is one of the hardest things to do. Most non-profits start with a Board comprising friends of the founder. This is bad for both cognitive diversity (people naturally hang out with people that are similar to them) and accountability (it's hard to be objective when you have a very strong personal bond with the CEO).
When I first joined the EA Community, there were a handful of people in normal jobs and a bunch of students debating philosophy. Now, there are around 10,000 active EAs. The collective knowledge is huge, but underleveraged. Diversity of experience and perspectives is vital for any board. Every board should undertake a self-assessment to identify its gaps.
In particular, I think we are also under-utilising the experience of EAs in the private sector. Many people who became involved in EA in the early 2010s are now mid-career and many are in the private sector (earning to give was a key 80,000 Hours recommended at the time). Many have experience of working in large organisations (which few people working within EA have currently). Many are keen to be more involved with EA. Many have experience of strategic decision-making and assessing CEOs. Ongoing involvement with EA organisations is also likely to increase community engagement and reduce value drift. Around a quarter of high-fidelity non-student EAs still earn to give. I think at least one quarter of Board seats should be filled by EAs with significant business experience[4].
Introducing the EA Good Governance Project
The aim of the EA Good Governance Project is to help EA organisations implement good governance.
At the outset, this means one thing in particular, the Board Candidate Directory.
Over time, we hope to add practical resources for Boards on topics such as:
- Measuring impact
- Running good meetings
- Setting appropriate policies
- Assessing CEO and senior team competencies
- Technicalities, e.g. incorporation, reporting
Eventually, there may be the potential to provide consulting services, such as recruitment, board assessments and leadership coaching.
This project is being bootstrapped at first and operating under the fail-fast philosophy. It is not pretty or fancy at the moment. That will come only if / when it proves its usefulness.
How Can I Help?
If you have skills, experience and time to offer, please add your profile.
If you are recruiting a new board member, then please direct candidates to the directory. If you get in touch, we can add a tag so candidates can specifically apply to your organisation as well as adding their name to the general directory.
If you have experience of Board effectiveness, e.g. having served on many boards before, having coached at board-level, having studied organisational behaviour, then we would love to hear from you. We are looking for people to contribute to resources.
Finally, if you have technical skills and would like to get involved, please also get in touch.
- ^
When you buy private companies, you get to set up the governance, so this is typically less of an issue.
- ^
Of the four, this is the one that can be most done by an external advisory board rather than by the legal board.
- ^
Some large customers will even demand open book accounting.
- ^
On a practical level, they are also much less likely to have conflicts of interest that could force them to step down. My personal experience suggests talented EAs wear a lot of hats and there is a lot of interaction between different EA organisations.
Trish @ 2022-11-14T20:40 (+24)
Upvoted with the benefit of hindsight bias.
In particular, I'm impressed with how these parts hit the nail on the head for recent events:
On average we are young and inexperienced. We have not yet experienced a scandal / major problem and have not yet started to think through how to avoid that happening again.
And:
Many EA organisations have very concentrated sources of funding. Donors therefore often fulfil the accountability and governance functions. Donors are analogous to customers, which can wield significant influence in for-profits.
Devon Fritz @ 2022-10-11T08:33 (+12)
Thanks for this initiative Grayden. I've seen time and time again that orgs would benefit from having a stronger, more effective board, so I am excited to see this taking flight.
pete @ 2022-10-09T01:51 (+8)
Excellent initiative - this increases my confidence that we can create organizations that truly scale and achieve significant impact
Manuel Allgaier @ 2023-01-24T15:16 (+5)
This seems valuable, thanks for setting it up!
It's been three months now - can you share any updates on how it's going so far? If you have any numbers you can share here or on the website (such as # of candidates who signed up, # of organisations who used the service and # of successful matches), I'd find that helpful to decide whether to sign up. If there's a bottleneck on either side (orgs or candidates), let us know!
Grayden @ 2023-02-11T21:39 (+2)
Thanks for the nudge. I've just posted an update here: https://forum.effectivealtruism.org/posts/nEnDvu2Ha9HLguvK8/update-from-the-ea-good-governance-project
BrownHairedEevee @ 2023-01-19T00:39 (+4)
This seems like a good "Task Y"!