Episode 3 - Governance in the Grey - Board vs Management

In this episode, Lisa Coletta and Adam Coonan unpack one of governance’s oldest tensions — the line between Board oversight and management responsibility — and why it still quietly destabilises decision-making inside organisations every day.

Most governance conversations stop at structure:  “Here is the line.”  “Here is the delegation.”  “Here is the approval authority.”

But the real challenge is rarely the policy itself. It is how the line is actually experienced in practice.

The hesitation.  The second-guessing.  The delayed escalation.  The Board drifting operationally because something no longer feels quite right.  And executive teams trying to “fix it first” before bringing matters forward.

In this episode, Lisa and Adam explore how pressure changes judgement, how fear delays escalation, when Board curiosity becomes operational interference, and how ambiguity quietly distorts decision-making long before anything reaches the minutes.

Because governance frameworks matter. But frameworks alone do not explain what really happens inside rooms under pressure.

Transcript

SPEAKER_00 0:05

Well, hi everyone. Welcome once again to Off the Record, a podcast full of governance conversations that don't make the minutes. I'm Adam Coonin, and here with me as always is Lisa Colletta. We are both governance consultants for those of you that don't know. And between us, we bring different lenses to governance. And in this podcast, we explore what is really driving decisions inside boardrooms. Not just the structures and frameworks, but the dynamics, tensions, and conversations that sit underneath them. Everything we share is drawn from our own experience drawing uh working with boards, chairs, and uh their executive teams. Uh and it's important to say that these are just our perspectives. They do not constitute legal advice or formal governance and guidance. This instead is about opening up the conversations that shape the decisions in practice, not just what formally gets recorded. And today's conversation sits right in that space. We are going to talk about the line between board and management. It's one of the most talked-about concepts in governance, which might make you wonder why we are rehashing it or what useful contribution we can make. We decided to talk about it though, because it's uh the one that is possibly least felt, Lisa. And uh we are all about feelings here at Off the Record. Um and uh that is fair enough in my policy-driven mind and world, because the real tension doesn't sit in the policy, it sits in the moment where someone thinks, is this mine or theirs? And if like me um usually uh thinks about it half a second before hitting send on an email they may then later regret. Yeah. Uh I've learned. Lisa, uh, where do you think this really starts to show up?

SPEAKER_01 2:15

Oh yeah, look, Adam, it definitely shows up in that exact moment, you know, that pause, um, that internal check. Do I take this forward or do I hold on to it? And that moment is really clean, I found. It's really, really loaded because if management escalates too early, they risk looking like they're not across it. If they escalate too late, they risk being asked why the board wasn't brought in sooner. And on the other side, if the board leans in too far, it can feel like overreach going into the weeds, you know, is what we say. But if it stays too high level, it can feel really um disconnected and not particularly value adding, you know, to some. So you get this constant sort of push-pull, you know, and testing of the edges, yeah. And and none of that ever makes it in into the minutes.

SPEAKER_00 3:14

Hmm. Yeah, I I hear that. And so I guess the obvious question is what's absolutely or possibly happening underneath that push and pull.

SPEAKER_01 3:26

Yeah, look, it's it's a couple of things really. It's tension around ownership, um, clarity, around trust, around judgment. And often you'll see executive teams holding things a little longer than they should, trying to resolve it before it becomes boardworthy.

unknown 3:45

Yeah.

SPEAKER_01 3:45

Holding it into keeping it in operations. And you'll see boards asking questions that drift slightly into management territory because something just doesn't feel quite right.

SPEAKER_00 3:57

And so a lot of them have been there before, right?

SPEAKER_01 3:59

Look, look, they have, and they they're in, they've got their own, you know, internal worrying, their own intuition. Um, and they tend to start with, you know, just help me understand, XYZ, which is usually where things start to slide. Yeah, and in between that, of course, there's often hesitation, there's conversations that are almost raised, but are not. There are signals and sort of, you know, the mood in the room that's sensed but not fully articulated, because no one wants to get the line wrong. And so instead of clarity, you get this behavior of carefulness, and carefulness slows everything down. A room full of very careful people not knowing where to step or how to step. Um, or worse, and I've seen this a few times, and I'm pretty sure you have too, Adam, and that is it creates blind spots. Dangerous.

SPEAKER_00 4:55

Yeah, well, I I've seen that play out where everyone in the room knows something is not quite landing, but no one really wants to uh be the one to formally, you know, own it. Uh it just sits there and uh quietly gets bigger. But how do you um I guess move from that tension into something that actually works? I guess that's the that's the question that we might be able to explore.

SPEAKER_01 5:27

Yeah, look, it's there's a couple of things there around it. Um, you know, taking taking from the delight from the dark and bringing it into the light, or in other words, you bring the tension into the open. And what I've found is the line works best when it's actually co-created and not assumed, you know, not imposed.

SPEAKER_00 5:50

In that context, isn't the magic word delegation, um, where the the board and management sit down together and define what genuines to be escalated, what sits with management, and then I guess how how that escalation actually happens in practice.

SPEAKER_01 6:06

Look, yes, but most importantly, creating an understanding in where matters of strategic significance actually become critical. And and as part of that, um, you know, we need to have this shared definition. Um, and every because otherwise everything becomes, you know, really subjective. It's one of those things, too, I found that um it's typically principles-based. So while ever you've got shades of grey and not black and white around these things, you know, and where everything is subjective, the line tends to move depending on who's in the room and how confident they feel and what's at stake. Um, but when it's actually anchored properly in strategy, those lines and those principles become a lot clearer, um, a lot better understood, not rigid, not those hard black and white lines. There's gray, but there's the ability to be able to navigate the gray because of that anchoring. And that I found actually changes the dynamic really quite significantly, quite completely.

SPEAKER_00 7:14

Yeah, yeah. Well, I think anyone who works in the corporate governance space knows that that grey is just the reality of things. You know, grey is is is part of what we do, part of what we have to navigate. And so from a practical lens, um, I guess I'd ask the question, where do you see that organizations fall down here most often? Because it has to be said that most of the ones we work with will have some form of written delegation seeking to define the line.

SPEAKER_01 7:45

Yeah, look, they avoid the discomfort of really defining it or they document it, but they never really truly embed it. Yeah. So in practice, people are still relying on instinct. And instinct under pressure isn't always reliable. A pick, you know, particularly at about 10:30 p.m. the night before a board meeting agenda is finalized and published, or then, you know, the day before the papers go out, you know, that's when that rule shift really happens. You know, management knows what to escalate without second guessing. The board trusts that it's seeing what it needs to see, and both sides respect that their roles are different, but equally critically and equally critical and equally important.

SPEAKER_00 8:26

Um, you need that shift, right?

SPEAKER_01 8:28

Look, you definitely do, and because it isn't actually about control, it's about flow. And when the line is working, things move. You can feel it. Decisions are made at the right level, that escalation piece really happens at the right time, and accountability is really, really clear. And when it's not, oh, you feel it, and you feel it in that you know, hesitation. Um, sometimes you even see it and feel it in the duplication. Um, you know, we're talking in circles uh or or in the silence as well. What we're not doing.

SPEAKER_00 9:06

The sometimes the same paper coming back three meetings in a row syndrome, just slightly reworded, you know, or maybe even the same paper because it's just not hitting the mark.

SPEAKER_01 9:16

But yeah, or the right conversation hasn't been had because the right lens or the or the wrong filter is being applied to it. And you know, the board's wondering why it's come to us, and management can't understand why the board aren't helping them and supporting the right things forward. It happens, you know.

SPEAKER_00 9:34

Yeah, no, for sure. I look, um, as I said earlier, it's this grey area, and and it it is it is a big part of what decision making in an effective way is about. And so I guess in keeping that practical lens for listeners, I'd take the opportunity to mention uh something that I've seen work well to keep that flow in decision making. Again, just to caveat this, where those boundaries are well understood and appreciated and um the board and management dynamic is significantly robust. And and that is uh this concept uh of ratification of a decision. You know, I guess uh ratification of a decision would be whereby a manager makes a decision that can be reasonably seen to fall into a grey area of the line between board and management, and then they report it to the board at first opportunity, seeking the board's specific support for the action taken. Um I mention it because I've seen it work well where there is an urgent decision to be made and trust exists between the various levels of decision makers and decision making, um, particularly where time-bound considerations pervade on a on a matter or issue. Uh so when advising, you know, usually a CEO or general manager or on something like this, whether to act or to go to the board, I usually pose the obvious question, well, what would the board expect? Would the board expect me to just get on with it? Or perhaps even more pertinently, what do you think, well, what would the board do, but what do you think the board would do? Because this person has been uh given a level of authority through through delegation. So that's a that's an important question to consider too. Yeah. Um, and maybe considered by some listeners as a cavalier approach, but in my experience, um it's uh generally forward to help the executive um become comfortable with making a decision when there is a a genuine gray area. Uh this to some gave governance frameworks can be a proper test of the line, insofar as the board will either appreciate and possibly even congratulate that executive on taking action.

SPEAKER_01 11:49

Yeah.

SPEAKER_00 11:50

And then uh testing approval with them after the fact, but but or otherwise say, yeah, don't do that again. Exactly. As long as the decision was was reasonable and legal, you know, testing the line is okay, in my experience.

SPEAKER_01 12:06

Yeah.

SPEAKER_00 12:07

Um so Lisa, if there's one thing to leave people with on this one, what would you say that would be?

SPEAKER_01 12:13

Well, I think the one thing is um as uh you know, in your practice, you know, in your experience shows, Adam, the line between the border management isn't a line on a page, it's a lived experience, and sometimes it needs appropriate testing. And you can feel when it's not working, and you can definitely uh feel when it is.

SPEAKER_00 12:36

Yeah.

SPEAKER_01 12:36

Um, and none of that tension, none of that push-pull ever makes it into the minutes.

SPEAKER_00 12:45

Well, that's for sure, and maybe that's the point. The most important dynamics in governance are really the ones written down, they're felt, as you would always tell me, Lisa, but they're then tested. And this is where documentation and and feeling come together. They're negotiated in real time, uh, because even if there is a documented line, um, it's a living line. Um you know, this is usually in conversations that um could have uh uh been heard to start out a meeting with um, you know, this probably isn't for the minutes uh to use our uh our theme, uh conversations that don't make them. Um but that's exactly what we are exploring here on the record. Uh thanks for joining us, everyone. Until next time.