Once Again: How Should Nonprofits Conduct Board Evaluations?*
By: Eugene Fram
Process Expectations Including:
• Value of board materials: board book delivery time prior to meetings, material clarity, meeting notices, etc. Are board books delivered a week ahead of meetings?
• Stakeholder Relations: Board interactions with various nonprofit stakeholders, especially staff. To what extent do directors meet with key stakeholders? To asses this expectation, are records noted of these
interactions? Which directors are most adept at building these relationships?
• Willingness to evaluate qualitative outcomes** To what are data developed that go beyond typical records such as accounting statements and membership records? What about the more difficult data to develop, such as brand
image and impact on the community? Hearsay evidence should not be used to assess these important outcomes.
• Composition of the board in regard to diversity including gender, skills, age, board experiences, etc. Does the organization have a diversity policy? Do current board members have sufficient prior board experiences in
order to act as models for new members without prior board experience?
• Action plans including a summary, for the board minutes, which obligates the board professionally to take action and may have liability implications if plans are not executed. The plan should provide evidence of a robust
evaluation. With luck, some nonprofits may be able to relate their field accreditation processes with the action plans.
Director Evaluation Approaches
As boards evolve, they can use: individual self-evaluations by each director; evaluating the board as a whole; peer-to-peer assessment, engaging an independent third party to conduct the process & to advise on confidentially and to present a report. Finally, the whole evaluation process can be outsourced to an independent facilitator.
Coming from an academia background, in which the peer-to-peer process is strongly engrained, I suggest a peer-to-peer blind review (source of individual comments not revealed to others) with a third party expert to advise on process and develop the report. This action needs to be supported by a report of how the board has accomplished its process expectations as listed above.
This venue for evaluation has its limitations in the nonprofit environment, but at least each director will obtain an understanding how others perceive his or her contributions. Also it will assist the board chair in asking those who are not contributing to resign from the board.
The major limitation are that nonprofit board members can tend to be restrained from being too critical, sometimes allowing for a report to have positive biases to maintain harmony. It does not assist the board chair with the most difficult job of counseling a disruptive director, making a substantial financial contribution, to leave the board.
Recent (2012) data from BoardSource show that only about 50% of boards have had “formal, written self-assessment of board performance in the last three years.” With the rapid turnover of directors that nonprofit boards traditionally experience, this seems inexcusable. Consequently, nonprofit boards need to have these evaluations more frequently then for-profit boards. While not all can financially afford to use the process described, at the very least a board member or small committee can review past board minutes every year to determine what has been promised to be accomplished and compare the information with what has been accomplished.
*Based on comments related to for-profit boards by Scott Cutler & T.K. Kerstetter on video, This Week in the Boardroom, Corporate Board Member, 1-31-2013.
** See Jerry Talley & Eugene Fram (2010) “Using Imperfect Metrics Well: Tracking Progress & Driving Change,” Leader to Leader, winter, pp. 52-58.