Better Board Governance. Is it the same for both business & nonprofit organizations?
By: Eugene Fram Free Digital Photo
Viewer Favorite: Updated & Enhanced
Both BoardSource in 2015 and the Charted Global Management Accountant (CGMA) in 2012 have issued reports on improving board governance. The former group focuses on nonprofit boards and the latter focuses on business boards globally.* Both the nonprofit and business organization reports listed the following prime areas for board improvement or focus: The CGMA report called for improved strategy development & risk analysis; better boardroom behaviors; better relationships between board & management. The BoardSource report asked for improved focus on strategy, with much less emphasis on operations; more board commitment, engagement, & attendance; better self-assessment, recruitment & development.
Although the CGMA report does not differentiate the types (strategic vs. operational strategy) the “risk oversight” notation can indicate there is a need for greater board focus on long-term strategy. For nonprofit boards, the strategic side of planning is often neglected. There has been a decades-long board culture support for directors’ involvement in operational decisions, often leading to board micromanagement and less strategic interest.
Nonprofits need substantial trust between board members and management. If all board members and the CEO understand the board mandated boundary line for governance versus operations decision-making, both sides will recognize their responsibilities with limited board micromanagement. This is not to say that each may overstep the boundary line on rare occasions, but infractions must be approached professionally with partnership civility.
Peter Rinn, Breakthrough Solutions Group,* published a list of weak nonprofit board practices. Following are some of the items listed and my estimation of what can be done about them, based on my experiences as a nonprofit board director, board chair and consultant.
• Dumbing down board recruitment.Trumpeting the benefits and not stressing the responsibilities of board membership.
Board position offers frequently may be accepted without the candidate doing sufficient due diligence. At the least, the candidate should have a personal meeting with the executive director and board chair. Issues that need to be clarified are meeting schedules, “give/get” policies and time expectations. In addition, the candidate, if seriously interested, should ask for copies of the board meeting minutes for one year, the latest financials, and the latest IRS form 990.
How Do Nonprofit Boards Keep Stakeholders Engaged?
By: Eugene Fram Free Digital Photo
Viewer Favorite Revised and Updated
First, exactly who are the “stakeholders” in the nonprofit environment? Most directors would readily define the term as clients and board members. But what about other participants such as external auditors and significant vendors? Surely a charity that depends on a vendor to supply groceries can be hobbled if the food is not delivered properly. And, last but not least, the backbone of the organization — the volunteers! Many cogs in the wheel make the nonprofit world go around and need consistent and careful attention. Following are some guidelines for engaging all types of stakeholders:
How Do Nonprofit Leaders Manage Unsolicited “Great Ideas?”
By: Eugene Fram Free Digital Photo
What does a board member or CEO do when a donor or valued volunteer approaches him/h with a great idea that needs to be implemented at once? Since most of these ideas are what a Stanford professor terms bad ideas, the board chair and CEO are often between a hypothetical rock and a hard place! To agree to a proposed project that is impractical or irrelevant to the mission will put the nonprofit at risk. But to reject an eager volunteer or potential donor could have serious donor related financial or interpersonal consequences.
When bad ideas are suggested, nonprofit directors and CEOs traditionally have hastily reviewed them—then prolonged the evaluation process hoping the presenter will lose interest in it. When an immediate reply is called for, a full review of the project will involve board and management time and effort to provide a fair assessment. If the verdict is negative, everyone hopes for the best!
Pressure Test Your Nonprofit’s Fund Development Efforts
By: Eugene Fram
It’s no secret that nonprofits do not excel in the craft of fundraising. A 2015 study reported that 65% of CEOs gave their boards academic grades of “C” or below for efficacy on this front. Yet most will agree that without the continuous influx of financial support, the mission to which the directors have committed themselves will fail!
I clearly remember examples of this deficit from my own board experience—one in which I served on the fund development committee for a small nonprofit which met monthly for about a year. A sincere and hardworking board chair headed it, but the meetings took place without the presence of the CEO. Many ideas with merit were exchanged such as developing a reserve fund, “get or give” board requirements etc. There was a lot of talk but no implementation, and after a year of pure discussion, a new president, who convened a new committee, disbanded the group.
A review of the pressure points in key fundraising activities would have taken the group from talk to action and further implementation. Here are three activities and their variations that I consider most critical to nonprofit development processes: (more…)
Improve Your Nonprofit Director Onboarding Process using Going For Impact
New guidebook covers
What to Know, Do and Not Do
As a veteran director with extensive experience on 12 nonprofit boards I have been “treated” to a wide variety of on-boarding sessions for new directors.
They’ve ranged from asking:
Every new director to read a 2.5 inch policy manual. (I checked the size!)
Having experienced board members sit next to new ones at meetings.
Listening to the CEO review the entire policy manual.
Going For Impact: The Nonprofit Director’s Essential Guidebook lets you improve such sessions by making on-boarding governance material more meaningful and interesting. For example:
Use the book’s 150-item Index Strategically: Ask new directors to read specific topics (e.g., micromanaging; outcome vs. impact data; responsibilities of the board) and relate the readings to their new board.
Select Key Chapters in the Book: Choices include topics such as Nonprofit Culture Presents Challenges or There’s a Boundary Line That Shouldn’t Be Crossed. Then later – in either formal or informal sessions – have the CEO and/or board panels discuss the topics with the new directors.
Give All New Directors a Copy of the Book: Ask them to skim or read the book’s content, which encompasses 112 pages, and list topics of greatest interest. Then hold three or four informal on-boarding sessions, led by experienced directors that relate to the selected topics.
Going for Impact can also be utilized by creative boards and CEOs to develop retreat agendas that can help enhance their board’s governance perspectives!