Is Excessive Deference Shown To Nonprofit Boards?
By: Eugene Fram
Expectations of volunteers serving on a nonprofit board are often thought to be lower than necessary. Paul T. Hogan, Executive VP of the John R. Oislei Foundation, recently agreed with this position,
Because board members…are volunteering, their time to serve on a board, there is a tremendous hesitancy to ask them…to devote additional time, (especially for learning.) … Respect them enough to teach them what they’ll need to know to (fully) contribute (what they have to offer)*
Hogan’s point is a good one. Management and staff’s continued deference ** to the board can lead to an unhealthy power equilibrium that can weaken the organization’s performance.
Here are some thoughts on the challenges involved:
• The Board-Management Compact: Nonprofit CEOs and staff often feel that they have to defer to boards for various reasons.*** They can view the board as possessing ultimate powers, and its members having unusual insights because of their working positions. Many nonprofit managers, however, have much more management experiences than board members who work as independent contributors such as professors, physicians, attorneys and accountants. Also just because a board member works for a large complex commercial or nonprofit organization doesn’t mean he or she has had management education, experiences or has acquired the strategic know-how necessary to contribute to a state-of-art NFP board.
Excessive deference to the board can, in turn, lead board directors to passively accept lower performance standards, especially when it is a nonprofit with a human service mission, as Hogan has noted. (In some instances, CEOs even prefer this arrangement! It reduces their responsibilities, as a number with whom I have had contact, have openly admitted.) From my decades of experience as a nonprofit director and consultant, I have seen the development of an unwritten compact between nonprofit boards and managements, with each tolerating minimal performance from the other. Where subtly or overtly present, these compacts need to be eliminated in the 21st century. The organization needs a relationship between the two that provides an equal partnership, with a clear trust and respect for the differences in the required roles.
• Volunteer Time: Currently Baby Boomers and Millennials are the two age groups from which board candidates are being selected. Except for the leading edge of Baby Boomers, now beginning to retire, both cohorts have time-restricted schedules in terms of work-family obligations. Asking them for more time to formally learn about the nonprofit through traditional orientation sessions or classes, in my opinion, has a little potential to develop long-term learning.
There are alternatives that can be adopted. One is to first make certain that the board has a subgroup of directors with experiences in strategy development, management assessment, governance processes and the field of the organization’s mission. Then ask the “veterans” to become informal mentors for newly appointed directors.
Example: Ask these mentors to meet informally, or by phone, with the neophytes to review, for example, governance obligations for due diligence other important issues. (In some cases, the CEO, CFO or other senior managers can become mentors.) After a year, proactively schedule a series of brief convenient conferences or conference calls to enable the new directors to pose unanswered questions and make certain all are reasonably acquired the knowledge needed to effectively contribute. This shouldn’t be an unreasonable task, if about three to four new directors are elected each year.
• Teachable Moments: During the course of board meeting or committee meetings, issues can arise on which new directors may have little background. It should be the obligation for the board chair or committee chairs, prior to or after the meeting, to make certain that new directors are properly briefed in a non-judgmental manner on these issues.
Recently, I encountered a nonprofit board where the board chair, an experienced senior business executive devoted to the organization’s mission, privately complained that there was no one on the board who understood strategy development. The board was largely composed of millennials stressed with work-family obligations. They completed specific helpful time-limited projects in professional manners but just couldn’t find time to become involved in the essences of board responsibilities. Board turnover was high. In my opinion, it was a compact-type situation where the board performance was low, but the staff met goals that might have been higher.
Obviously the board needed a better balance with experienced directors having time to act as mentors for these busy millennials and to eventually eliminate the culture of deference to the board, its strong chair and to eventually form a true partnership culture between board, management and staff.
*Paul T. Hogan (2014), “Boards Cannot Be Sacred, Staffs Cannot Be Saints, and Founders Should Never Be Martyrs,” Nonprofit Newswire, May 20th.
**Hogan referred to the board as being “sacred.” I consider that to be excessive “deference.”
*** Compacts between students and faculty also have been reported in university settings, under which faculty require modest educational rigor in exchange for students providing their class room instructors with superior teaching ratings. See: Richard Arum & Josipa Roksa,(2011)Academically Adrift, Chicago, The University of Chicago Press p.5.
Eugene, I’ve been on two different nonprofit boards, which almost couldn’t have been more different in board member composition. One was mostly people from professional backgrounds. The other had a few people with professional backgrounds, but most without. Both boards had people with good hearts and intentions. It varies tremendously from nonprofit to nonprofit. An example, I have prepared materials for public company and nonprofit audit committees. In some ways I have referred to the nonprofit audit committee as being a more difficult position because there is so little specific guidance or required structure that is talked about.
Dave Tate, CPA, Esq. (San Francisco)
David: Thanks for you note. You also may be interested in these articles and links, especially the blog-site and book, if you haven’t already seen them. I have noted that very few directors are familiar with the Intermediate Sanctions Act, but they need to have knowledge about excess benefits.
Blog site http://bit.ly/yfRZpz Book: http://amzn.to/eu7nQl
The nonprofit governance model in the book is based on: building trust between the board and management, eliminating redundant board committees; eliminating board micromanagement; focusing the board on policy & strategy and having a robust board evaluation focused on outcomes and impacts, not processes. It has been adopted or adopted by thousands of nonprofit boards.
Many ways book can be used: Adopt or adapt the model; Reference source for board issues; Training tool board development; Motivational tool for director engagement; Reference to understand board governance & compliance obligations. A leader’s guide is available for the book for those who want to use it as a base for collegiate/ continuing education classes or for short seminars that appeal to board members and CEOs.
BTW: My partner on the book is a professional writer. The material in the book is however, is based on my extensive field experiences as a NFP board director and consultant. All examples reported have a fact base without embellishment. The material is presented in story line format for interesting and easy reading.