Nonprofit Boards-Governance

A few months ago, I was presenting in Harrisburg, Pennsylvania and had an interesting conversation with a man named Jim Shenk. We were talking about facilitating conversation – and using good conversation to make quality decisions.

Jim described this voting strategy: “Yes and…” “Yes but…” and “No.”

Imagine this as a conversation strategy before deciding/voting on an issue. The facilitator (a good board chair at board meetings) asks people to think in terms of:

— “Yes, (I see value in this. I agree with this. I like this. Or whatever.) and…” With the “and,” the speaker adds additional insights, etc.

— “Yes, (I see value in this. I agree with this. I like this. Or whatever.) but…” With the “but,” the speaker identifies issues of concern, contrary thoughts that might stimulate further conversation, et.

— “No, because…” And a “no” deserves the support of the various “becauses.”

Using this approach requires some “training” with the group (board, staff, community council, whatever) prior to facilitation. And, as usual, good facilitation is key for any good conversations.

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I talk lots about the difference between the board and its individual board members. Check out my blog archives. Check my NPQ columns. Download, study, use, and enforce the board job description and board member performance expectations on this website.

I want board members to behave as leaders. I expect board members to take the initiative and step up to the plate. I expect board members to inconvenience themselves on behalf of the organization. All that is part of leadership.

And part of board member leadership – for every single board member – is active participation in the philanthropic/fund development operation of the organization. Every single board member must give a personal financial contribution every single year, to the best of personal ability. Every single board member must help identify the predisposed and nurture relationships.

Yes, the board (the group, the collective) is responsible for ensuring that there is sufficient money, that the organization is financially sustainable. That’s part of corporate governance. And every single individual board member – as part of the governance group, the board – should demonstrate leadership in fund development.

“Fix your board” is my shock and awe approach. Scandals in the for-profit and nonprofit sectors make governments nervous. And nervous people do not-so-good stuff. Look at what the U.S. Congress was thinking about a few years ago, led by Senator Grassley. And now, there’s Representative Charles Boustany. He thinks of himself as a prominent watchdog of nonprofit organizations. He wants the IRS to be more aggressive and go after nonprofits.

I don’t agree with the ill-informed governmental approaches at state and federal levels. But I sure understand their frustration at poorly governed nonprofits.

Wake up! Fix yourselves. Quit being an embarrassment to the rest of us. Your poor governance makes watchdogs like Boustany make ill-advised decisions.

If your board is more amenable to self-examination, learning, and possible change – then take the “make governance stronger” approach. Talk about the health check-up. No need for shock and awe when well-meaning people believe in continuous quality improvement.

Whichever way works for your organization — shock and awe or health check-up — do it. Do it now. You’ll find lots of resources in the Free Download Library on this website. Click on Resources. See the pull down menu. Then visit the board development/governance section.

Some random thoughts for you to remember – and explain to your boss and board:

1. Board committees help the board do corporate governance. These committees report to the board and the board directs and controls these committees.

2. Good committees don’t waste board time by making reports. Send reports to board members and they can read the reports.

3. Good committees don’t just make recommendations to the board. Sometimes committees refuse to make a recommendation. Instead, the committee explores options and engages the board in conversation. And the board decides.

4. Mostly, committees should engage the board in strategic conversation. That means the committee has to provide background information and set the context.

5. At the end of each committee meeting, the committee should explore the following:

— Does the board need to make a decision based on something we, the committee, have explored? If yes, will the committee recommend a decision to the board and seek board reaction to the recommendation? Or, should the board have a strategic conversation – facilitated by committee information – and the board should then decide?

— Do we the committee need to help build board understanding and ownership, but no action is necessary at this time?

— Do we the committee need to inform / expose the board to something now? And at some point in the future, the board might make a decision about something?

The best board members actually inconvenience themselves when they serve.

The best board members make every effort to attend board meetings. And, of course, the best board members come prepared – having read the materials and even made notes! The best board members bring the materials and are ready for conversation. Conversation! Not advocacy.

Sure, sometimes it’s inconvenient to be a board member. There was that performance you really wanted to attend. But there was a board meeting that evening. Your commitment to the board comes first, before the desire to attend the performance.

Your daughter plays soccer Saturday mornings. You always go. But not on the Saturday of the board retreat. Of course, if you’re on vacation, then you don’t attend the retreat. But please don’t schedule your vacation on the day that the retreat was scheduled – not unless you absolutely have to do so.

I talk with lots of organizations about good governance – and those wonderful board members who expect to inconvenience themselves on the organization’s behalf. I received a rather marvelous email from an organization after just such a talk. They wanted to share with me “the impact I had.” Here’s what I was told:

“We spoke with our board about our meeting with you and how helpful it was. And at the meeting, we learned that our always very committed former president took one of your recommendations literally and missed his 27th wedding anniversary to be present at our meeting. This sets the bar very high for all board members. We wanted to thank you again for inspiring this type of commitment. We keep trying to implement your recommendations and the board is going strong.”

Yes, I talk about board members caring enough to inconvenience themselves. I talk about board members missing birthdays and anniversaries – and celebrating them at another time – because committed professionals fulfill their obligations to the business.

Kudos to this organization. Kudos to that board member. (Who celebrated the anniversary on the weekend, I was told.)

This week, I’ve been in the Berkshires working with great nonprofits in the Berkshire Taconic Community Foundation Nonprofit Learning Program. We’ve been talking about good governance.

First, always remember this! Corporate governance is a collective act – and only happens at board meetings. Read the board’s job description…that’s what you do at board meetings. How do you do that at board meetings…check out my due diligence outline. And if you’re not doing all this, at some point in some board meeting(s)…then you aren’t fulfilling your corporate governance responsibility.

Here’s one way to evaluate how well you’re doing with corporate governance: Conduct my governance self-assessment. Tabulate the responses and then talk about the results at a board meeting. Use your board’s Governance Committee to create a plan to improve your adherence to standards. Every few months, talk about another one of the governance standards. Figure out how to improve your performance.

What does your board need to know? Your board (the group) needs information to have conversations to make decisions. The conversation and decision-making happens at board meetings (and the background information arrives in advance, for reading and thinking).

Your board needs reports within its scope of work (which is governance, not management!) And reports need to include an analysis of trends and implications. Send reports. Don’t present reports at board meetings; that’s a waste of good conversation time. If the report warrants it, use board time to engage in a strategic conversation about the trends and implications.

Your board – in its governance role – needs a general sense of the health and effectiveness of the organization. The board learns this through the quality and transparency and appropriateness of the information provided to them. That’s staff work.

The board also feels more confident when it receives regular updates about general stuff. Yes, general stuff that’s happening. And, board members – some more than others – are curious about general stuff.

Do what Kellyann Day, Executive Director of New Haven Home Recovery does.

She sends out a regular e-news to her board members. An update about the agency. Brief. Only one page or so. Includes key dates they have to remember. Sometimes includes a story about a client. Or an update ona grant received. Maybe some service stats or a donor compliment. Reminds them to sell tickets to the fundraising event. Or introduces a new staff person. Or or or.

And she doesn’t give these updates at board meetings. Instead, she uses this great e-news. She’s got a format, perhaps Constant Contact. She and her marvelous executive associate Kristen drop in the information. I’ll bet this doesn’t take much more than 20 minutes. And it’s sooooooo good! I recommend this to all of you. How often? You decide. But certainly once between board meetings.

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I’ve told you before: I collect quotes. From books, articles, colleagues. Here are some more thoughts from colleagues in Cohort 19, Saint Mary’s University of Minnesota, Masters Program in Philanthropy and Development:

— “In order for meaningful conversation to occur, a healthy tension needs to exist between the collective board and the board as individual members. If either one dominates the other, meaningful governance is lost.” (Katie Broach)

— “Board member selection requires dual consideration of the collective capabilities of the board and the attributes of each member.” (Cheryl Hadaway)

— “For board members to be fully engaged, they should not just care about the organization but about the cause. The nonprofit’s mission must be something that touches them. Even if they weren’t on your board, they would still be reading articles about the issues you work on, and discussing the issues with their friends – and doing so in a way that demonstrates both knowledge and understanding.” (David Earle)

— “What are the indicators of success in good governance? Is the board a reflection of the organization or does the organization reflect the quality of its board?” (Karen Denny)

— Here’s a great question to ask your volunteers, thanks again to Karen: “What would you be doing with your volunteer time if you weren’t here at this organization?”

— “Leadership wants to lead. Empowering them to find the best decisions is far more effective than trying to tell them what the right decision is.” (Brittany Janis) But here’s my follow-up to Brittany: Yes, some leaders want to lead and accept all the hassle that goes with that. But I suspect that some leaders just want the title and power (that they hope they get!) Here’s a test for leadership: Who will inconvenience themselves on behalf of your organization? Who will be the last person standing?

— “How can you effectively articulate the case for board reform, based around their needs,” asks Brittany Janis? Kinda like customer-centered and donor-centered.

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Yes, please write job descriptions for your committees. See examples in the Free Download Library on this website. And if it’s a board committee, your board adopts the job description. Include these components:

Committee name | Reports to (board of directors if it’s a board committee) | Composition (for example, 5 – 7 members including board members and non-board members) | Meeting frequency (don’t get carried away with meetings!) | Purpose of the committee (a couple sentences!) | Accountabilities (And now you list the specific responsibilities.)

Corporate governance – whether you are BP, the Smithsonian, or the local library – means: the process whereby a group of people (e.g., the board) ensure the health and effectiveness of the corporation. Corporate governance only happens when the board is together.

No single individual – including the board chair – does governance. See the job description of the board. That’s what you do at board meetings. See how the job description plays out by examining the sample due diligence outline.

How can we play more like Wayne Gretsky, hockey star. He said: “Skate where the puck is going, not where it’s been.” Actually, that’s a good idea when reviewing your financial reports, too. An accountant colleague of mine once said: “Why do boards spend so much time reviewing the financial report, which is already finished. Instead, they should pay attention to the trends and implications of that past report for the future.”