Board Effectiveness

NPCC recently held a workshop on board effectiveness.  The session, moderated by Jane O’Connell, President of the Altman Foundation, included panelists Michael Washburn, President of Washburn Partners and NPCC President, Michael Clark.

There’s no one-size-fits-all for board governance, began Jane O’Connell.  She urged nonprofit managers that if they ever get a chance to serve on a board, to consider it seriously, because it will give them the chance to see things from the other side, especially if they serve on a board in crisis.

In the past, particularly with smaller, grass-roots organizations, there wasn’t too much scrutiny of board effectiveness by funders or anyone else.  However, the world has changed drastically because of reasons ranging from corporate scandals to Sarbanes Oxley to congressional scrutiny of the sector.  But, for whatever reason, not all nonprofits have caught on, and too many are still functioning with leadership that is not as effective as it should be.

Today, the funding world is beginning to say, “What are we getting for our dollar?”  Nonprofits have to realize that funding isn’t infinite.  Competition for funds is also driving nonprofits to become more competent.  Professionals from the corporate world serving on nonprofit boards are also bringing changes.

The push for accountability, measurable outcomes, and more effective boards will not go away and will only increase.  O’Connell notes that she is always astounded at the number of nonprofits that do really good work, but whose management or board is in terrible shape.  She turned to Michael Clark and Michael Washburn to offer some suggestions on how to improve a board’s effectiveness.

Michael Clark noted that his background and perspective is that of a nonprofit manager.  He cited the three traditionally prescribed legal duties of a nonprofit board:  the duty of care, duty of loyalty, and duty to the organization’s mission.  Today, due to factors noted by Jane O’Connell, boards have new duties:  transparency, accountability, integrity, and program effectiveness.

In the nonprofit sector, we separate the CEO and governance.  Defining and assuring effective nonprofit board governance is a work-in-progress.  He sees assuring strong board leadership as mostly up to the executive director, agreeing with Peter Drucker that well-run nonprofits are staff driven.  The board isn’t there every day.  The best approach for a nonprofit manager is to see this as an enormously effective partnership.

We tend to focus on pathologies or deficits, but it may be better to start with a vision of what a good board looks like.  Clark suggested as a mantra, “Low maintenance, high impact.”  Think of board members as partners.  Yes, they’re your boss, but avoid power struggles, he urged.

To build a genuine partnership, you need a board chair who’s supportive.  It’s up to the chair to communicate to other board members what’s expected of them.  Map out the requirements and skills needed by your organization, but remember that every board is going to look different.

While most boards need certain key skills: legal, financial, fundraising, etc., it’s a mistake to get experts (financial, legal, etc.) on board who don’t have passion for your organization and its work. 

You need allies on board.  Start with the chair, and a governance committee—a committee that oversees the functioning of the board.  Together with this committee, clarify the responsibilities of board members.  Clark distributed a sample board member job description (see resources).  He quoted one Governance Committee chair on being a nonprofit board member, “It’s not a journey, it’s a job.”  Communicate clearly:  You can’t afford to look a prospective or current board member in the face and say, “It’s easy, we don’t have a lot of meetings…there’s not much work…”

Regular, clear and consistent evaluations, led by the governance chair along with the board chair and executive director, can go a long way in raising the bar of expectations for board members.  Clark suggested definite and staggered terms so that it makes it easier to conduct evaluations.  Some boards now ask for signed board agreements that lay out expectations of each board member.  On the issue of self-evaluation where boards evaluate their own overall performance, Clark noted that it may be a matter of your appetite for process, adding that you have to recognize the additional administrative functions you are layering on the staff.

Clark estimated that it can take three-five years to turn around an ineffective or dysfunctional board.  Institutional transition is never easy, and it will vary for each board, depending on its makeup, culture, etc.

You need people with passion and involvement.  They should be not only fund raisers, but friend raisers as well.

Michael Washburn noted that there is a high correlation between passion and performance of board members.  Personal passion should be the first and essential criteria as you recruit for your board.  Other motivating factors that cause people to join, professional, social, etc., are fine but they’re not good predictors of performance. 

The key task is moving the whole board and individual members from point A to B.  The right board members want to use their skills and are ready to work.  Washburn presented the chart below outlining the sequence and action steps that can help leadership motivate board members.  A critical success factor in achieving a healthy, effective board is strong leadership.  Following this cycle of commitment, work and re-commitment requires dynamic leadership from the chair, committee chairs, and the executive director.  Selfish or weak leadership will erode the passion and performance of individual members.

The life cycle begins before someone joins the board.  Make clear your expectations of new members.  Have a specific job in mind for each recruit.  Do not proceed if the prospect cannot commit to the full job description.  When an individual joins the board, provide an orientation and consider having a fellow member provide mentoring.  Toward the end of the term review their performance and determine whether they want to remain on board or rotate off.  If they remain, the cycle begins again with higher responsibilities.

There is a natural lifecycle for board performance.  As you repeat this flow, people often diminish in their efforts.  Expect that, and respect it.  Allow or create a mechanism for them to exit gracefully, and if appropriate find ways for them to remain involved with the organization.

Michael Washburn can be reached at 212-213-5330.  His website is at www.washburnpartners.com.

Board Effectiveness Dynamics

Resources

Board & Administrator is a monthly newsletter with articles and tips for administrators that includes a special edition for board members.  It costs $195 annually, and can be ordered online at www.shoplrp.com/product/p-9502.ASP.html.

BoardSource offers dozens of publications on governance. Their website is www.boardsource.org.

Governance Matters offers resources to help develop boards at www.governancematters.org. Their Nonprofit Governance Indicator Guide is at http://governance1.web132.discountasp.net/web/NGIG/index.aspx.

NPCC has sample materials for board management, including structure, committee descriptions, job descriptions, and evaluations. It can be found at www.npccny.org/members_only/boards.doc.

This article originally appeared in the September 2006 issue of NPCC's monthly newsletter, New York Nonprofits. www.npccny.org