Board governance is a balancing act. The most effective boards maintain oversight without interfering in daily operations. This principle is encapsulated in the phrase “Noses In, Fingers Out”—a crucial concept from The Imperfect Board Member by Jim Brown.
This phrase is more than just a catchy saying; it is a fundamental governance principle that helps board members fulfill their responsibilities without overstepping. This article will explore what “Noses In, Fingers Out” means, why it matters, and how boards can apply it effectively to improve governance and leadership today.
What Does "Noses In, Fingers Out" Mean?
At its core, “Noses In, Fingers Out” is about staying informed and engaged (noses in) while allowing executives to manage operations (fingers out).
In The Imperfect Board Member, the main character, David, learns this principle through experience. He is a CEO of a corporation as well as a board member of a not-for-profit, and tastes the frustrations and temptations common to both roles. His mentor, Trevor, steps in to explain that a board’s role is to direct and protect the organization without micromanaging daily operations.
Here’s how the principle works:
- “Noses In” means board members should stay informed, ask the right questions, and ensure that management is accountable. Board members should ask for the information they need to provide big-picture direction, set helpful policies, and ensure the organization continues to fulfil its mandate. We do not recommend blind trust; paying close attention and engaging in communication with the CEO to monitor well is key to shouldering the role of the board effectively.
- “Fingers Out” means they should not interfere with management’s decisions or attempt to run the organization themselves. A clear separation between strategy/direction and operations/implementation is very important to maintain, and the CEO functions as the pivotal point between both of those roles, responsible to ensure good communication with the board while overseeing the staff's execution of those bigger-picture directives. The board needs to entrust the CEO to do this, and not step past them.
A well-functioning board ensures strategic oversight without taking over the CEO’s role.
The Origin: The Imperfect Board Member by Jim Brown
Jim Brown introduced “Noses In, Fingers Out” in his book The Imperfect Board Member, which provides practical insights into governance through a compelling story format. In it, the Governance Excellence Model (GEM) outlines seven disciplines that every great board director embraces in order to fulfil the role of the board.
The book specifically emphasizes the importance of clarity in board roles and relationships. David’s journey helps board members recognize the distinction between oversight and interference, ensuring boards operate strategically rather than tactically. It’s geared to be helpful both to CEOs and board members seeking to find the right relationship between their leadership roles in order to help the organization succeed.
Why “Noses In, Fingers Out” Matters for Board Governance Today
When Jim’s book was released in 2006, resources to help board members understand their role clearly were far scarcer. While we've seen a great deal more thought leadership on governance emerge in the past two decades, board members often still struggle with the balance between staying engaged and overstepping their role. Common pitfalls include:
- Micromanagement: Undermining executive leadership by getting too involved in operations.
- Passivity: Failing to hold management accountable.
- Confusion of Roles: Acting as an operational leader rather than a strategic director.
With increasing scrutiny on corporate governance, regulatory compliance, and stakeholder expectations, boards must be both proactive and disciplined in their oversight approach.
Joining a board may at first feel like an affirming way to lend your expertise to another organization and enjoy the benefits of seeing that organization grow or succeed (and it is!), but people continue to join boards without recognizing how distinct this role is from others they have had. Often, new board members (and old!) haven't yet clarified the importance of the line between them and operations and reflected on whether they are fulfilling their distinct role without either overstepping or neglect.
Over the years, we've had many board members remark that a periodic re-read of The Imperfect Board Member helps them self-assess and notice unintended shifts in their behaviour or new opportunities to fulfil their role more appropriately and effectively. And it's a quick read (or listen, for those who prefer audiobooks), which keeps it accessible.
Continuing the theme of “quick and accessible”, let's distill this principle into some take-aways.
How Board Members Can Apply “Noses In, Fingers Out”
To put the "NIFO" principle into action (as it has been sometimes called), board members should:
- Stay Informed: Review reports, financials, and performance metrics—but let executives handle execution.
- Ask Strategic Questions: Instead of directing tasks, inquire about outcomes and accountability.
- Set Clear Boundaries: Define governance responsibilities versus management duties.
- Encourage a Culture of Trust: Allow the executive team to operate while providing oversight through key performance indicators (KPIs).
- Use the Right Channels: Address concerns through the CEO and board discussions rather than going directly to staff.
By embracing “Noses In, Fingers Out”, boards can ensure they are effective stewards without becoming obstacles to leadership.
Common Pitfalls to Avoid
- Overstepping Authority: Engaging directly with staff instead of working through the CEO.
- Failing to Challenge or Monitor Leadership: Blindly trusting management without accountability.
- Shifting from Strategy to Tactics: Focusing on execution details rather than long-term vision.
Successful boards strike the right balance by providing guidance without becoming a second management team.
Learn More from The Imperfect Board Member
For a deeper understanding of “Noses In, Fingers Out” and other governance best practices, check out Jim Brown’s book, The Imperfect Board Member. This resource is a must-read for board members looking to enhance their effectiveness and avoid common governance mistakes.
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FAQs
Q: What does “Noses In, Fingers Out” mean in board governance?
A: It’s a principle from Jim Brown’s *The Imperfect Board Member* that encourages board members to stay engaged in governance (noses in) while allowing leadership to manage daily operations (fingers out).
Q: Where does the phrase “Noses In, Fingers Out” come from?
A: It originates from The Imperfect Board Member by Jim Brown, a book on governance best practices originally released in 2006.
Q: How can boards apply “Noses In, Fingers Out” effectively?
A: By asking strategic questions, staying informed, and providing oversight without micromanaging. Boards should set governance boundaries while ensuring leadership accountability.
Q: What are the risks of not following “Noses In, Fingers Out”?
A: Boards that don’t follow this principle risk micromanagement, role confusion, and inefficiency—which can lead to disengaged executives and governance failures.
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