Nonprofit Boards-Governance

What do you think of this description for the board chair’s role? Dean (Cohort 22 at Saint Mary’s University) and I drafted this together.

Here’s how we begin: The primary role of the board chair is to facilitate the governance process. While the board chair has no more power than any other board, he or she – along with the CEO – is ultimately responsible for ensuring that the integrity of the governance process is maintained in all board proceedings.

But upon further reflection: Do I really think the board chair is primarily responsible for good governance? Actually, I think it is the board’s role to ensure good governance. And the board chair helps facilitate that process.

Then Dean and I came up with various functional areas, e.g., interpersonal, operational, and community.

1. Interpersonal functions of the board chair

• Empowers all board members and board committees.
• Empowers the administration to work enthusiastically in support of mission. (Hmmm… Really? Or is that mostly the CEO’s role?)
• Ensures board members and the board (as a group) feels a deep commitment to mission and community. (Hmmm… Commitment is really an individual thing. Internal motivation. The board chair and CEO can certainly help. But ultimately, the individual is responsible for his or her own commitment and performance.)
• Ensures that board members feel valued and respected. (The board chair can help. But each person has to value and respect others.)

2. Operational functions

• Facilitates effective meetings.
• With the CEO, creates the board meeting agenda.
• With the CEO, appoints committee chairs and appoints board members to various committees.
• Serves ex-officio on all committees but is not required (nor expected!) to attend all meetings.

3. Community

•  Supports and advocates for the organization and its leadership team.
• Demonstrates leadership in fundraising

Great article – based on research – in the June 2013 issue of Harvard Business Review. “Dysfunction in the Boardroom,” by Boris Groysberg and Deborah Bell. 

The article focuses on women on boards – how it works, experiences of men and women on boards, and more.

If you’re the leader of a board, read the article. If you’re a board member, read the article. If you want to build a stronger more effective board, read the article.

In 2012, women occupied only 16.6% of Fortune 500 board seats. And according to Groysberg and Bell, that percentage has been “relatively flat, increasing by just two points” over the past 6 years.

That’s called a gender gap – and it’s such old news.

Moreover, the value of diversity / inclusion is documented over and over. Whether it’s women and men, people of color and whites, homosexuals and heterosexuals… Whatever. Experiencing life differently produces different insights and observations and ideas and that adds value – to businesses, to government, to life.

Enough already! There’s the business proposition for more women in every walk of life. There’s the  moral proposition for more women in every walk of life.

Wow. “Patience has started to wear thin,” say the authors. And especially in Europe. Several European countries have actually adopted legislation that requires more women on boards. Yippee. Good for the wise Europeans. Too bad the U.S. of A is is not so wise.

Yes, it’s called gender bias. Just read the article. What does the research show:

• Women have to be more qualified than men to get on boards.
• Boards say they like diversity, but they cannot quite figure out how to do it.
• Women’s experiences on boards is different than what male board members think.

And, no surprise, talented board members alone don’t create great boards. “Boards need formal processes and cultures that leverage each individual member’s contribution as well as the directors’ collective intellect.” And the female talent are not quite included quite well enough.

Share this article with your governance committee. Talk about the research findings with your board. Ask the women on your board how they feel. Ask the men on your board what they observe.

And fix this. Fix it now. Enough already!

I teach governance at Saint Mary’s University – for the masters program in philanthropy and development. I have soooo much fun (and great annoyance!) with governance.

At one point in the course, we talked about the role of the individual board member…the job description applicable to all board members. I like to call the policy “performance expectations.”

Here’s one version. Here’s a slightly modified version. (And keep in mind, the job description of the board member is different than the job description of the board, the group that does governance. Check out the board job description, two versions, in the Free Download Library on my website.)

Back to Saint Mary’s and the Philanthropy and Development Program. In class, we talked about the board’s job and the individual board member’s job.

And then, Chris and Dean (not to be confused with Jan and Dean the musical duo), crafted an additional version of the performance expectations for board members. See below. What do you think?

1. Use your position of influence for personal or family gain as often as possible.
2. Abdicate personal and professional responsibilities when appropriate.
3. Use creative excuses to miss important board and committee meetings.
4. Undermine and frustrate management’s efforts to lead the organization.
5. When operations are running smoothly, deliberately inject dysfunction and drama.
6. Breach confidences indiscriminately.
7. Hide, prevent, evade, and ignore the engagement of benefactors (also called donors!) in the work of the institution.
8. Denigrate and ignore all bodies of research and professional best practices, particularly when presented by staff.
9. Ignore data-driven decisions.
10. Resist outside counsel at all cost.
11. Disengage from, and frustrate, healthy conversation.

I’m thinking that this Chris and Dean version might be very useful. Perhaps add insights. Maybe wake some people up!

Have you heard about my worldwide mission to destroy all executive committees? You’ll find an article posted in my Free Download Library. And various blogs and NPQ columns.

And now, with my own governance Reading Room at SOFII (Showcase for Fundraising Innovation and Inspiration), the word spreads. With really cool illustrations. Check it out.

A colleague told me about a board meeting he observed. Here’s the scary story, in his words: 

“The board chair mandated order. And when I say ‘mandated,’ I mean it. It was tempting to allow my jaw to stay on the floor because as soon as I picked it up, it would fall once again.

“The board chair, with some input from the Executive Committee, ran a fairly dictatorial board. Those were not part of the inner circle – i.e. didn’t serve on the Executive Committee – felt excluded and angry.

“The meeting was heated and the lack of transparency and tension due to exclusion was immense. The board chair got more heavy-handed and more secretive as the excluded board members asked more and more questions.”

What an awful story – but more usual than one might suspect.

What went wrong? A rogue board chair who thinks he controls everything. An executive committee that thinks it controls everything that the board chair doesn’t control.

My advice: Disband the executive committee immediately. Join my worldwide mission to destroy all executive committees. By the way, it’s the board’s decision whether to have an executive committee.

Give feedback to the board chair about his performance. Remember, no board member – including the chair – has more authority than anyone else. At board meetings, speak out. Ask for what you want as board members. Express concern about dictatorial and exclusionary behavior.

If necessary, ask the board chair to resign. Recruit a new board chair who is a good facilitator.

Do you need some resources to help you understand this work – and then do this work? Visit the Free Download Library on my website. Click on Board Development. Then read the many free PDFs located there. Things like: Basic Principles of Governance. Destroy All Executive Committee. Firing Lousy Board Members. Sample Policy for Board Operations. Performance Expectations of the Individual Board Member. My due diligence outline. Questions for building the best board. And more.

A colleague told me about this bad news board: The CEO is paid several million dollars to run a huge nonprofit institution. This is not, necessarily, excessive compensation. But the board – the full board – is accountable for talking about and finalizing the compensation. This board doesn’t do that.

The board doesn’t participate in the CEO’s performance appraisal either. The board doesn’t review the results of the performance appraisal to decide if it agrees.

And, it gets worse! The CEO’s performance appraisal and compensation are not connected to service quality, client satisfaction, or adherence to industry standards. (I wonder what CEO performance is based on?!)

Sadly, I’m not particularly surprised at this report. I see far too many dysfunctional boards. Even the boards of big institutions – like hospitals and higher education – sometimes seem clueless about governance.

Or, maybe these supposedly highly sophisticated boards with all those powerful and important people think that compensation and performance are  the job of the board chair or the executive committee. And rogue board chairs and rogue executive committees are all too willing to comply. (I’m on a worldwide mission to destroy all executive committees – and to fire rogue board chairs!)

I wonder what the IRS would think about this. I wonder what donors would think about this.

Review the job description of the board in the Free Download Library on my website. See the sample CEO performance appraisal process in the Free Download Library on my website.

I’m home now – back from my annual July sojourn at Saint Mary’s University of MN. I teach in the Masters Program in Philanthropy and Development there. What a marvelous experience each year. Intense. Broad and deep conversations. Cage-rattling questions (CRQs).

Every year, I collect CRQs: those cage-rattling questions designed to stimulate meaningful conversation that produces learning and leads to change. It takes courage to ask CRQs. Thanks, Cohort 21, for these great questions generated through our governance course together:

1. What are the read flags that we need to raise / be aware of?

2. How far are we willing to go if it means dismantling / confronting those who are most powerful…in our organizations, in our communities?

3. We’ve thought of everything. Now what did we forget?

I also collect bumper stickers from my SMU colleagues. Those catchy little phrases. Those important insights communication in a small snippet. How about these?

1. Inaction is cover up. (We were talking about Penn State and Komen and so much more.)

2. Understand how much power you have and use it wisely.

Read more »

A rather nice overview of governance. Thanks, Debra (Cohort 20) and Lilya (instructor) – Saint Mary’s University of Minnesota Masters Program in Philanthropy and Development. 

Recently, there’s been lots of comments on LinkedIn regarding board member recruitment. I believe that board member recruitment (and orientation, training, development, evaluation) is one of the most important things that a board does for itself. And the competent CEO enables this to happen.

Good board member recruitment begins with a clear understanding of the role of the board and the basic principles of good governance. Board member recruitment continues with a clearly-articulated composition policy and board member performance expectations. All this is communicated and applied during screening interviews with candidates for board membership.

This is serious stuff. And lots of work. And often frustrating. But it must be done. And it must be done well. I expect the CEO/Executive Director to be well informed about governance, very knowledgeable about how to get this stuff done. Because the CEO enables the board and its members to do this. Often, board members just don’t know this stuff. And they aren’t paid to know this stuff.

I get soooooo frustrated! Fundraising is not the purpose of the board. Governance is. Only part of governance is ensuring that there is money.

Fundraising is not the purpose of the board member. Board members participate in governance. Board members – as individuals – do various things…including fundraising but not exlusively (or even principally) fundraising.

There is a difference between the board and its individual board members. There is more to governance than money.

People who work in the nonprofit sector – e.g., staff and consultants – need to know the difference.

Visit the Free Download Library on this website. Read all the stuff about boards. Read my web column for the Nonprofit Quarterly.