By: Eugene Fram
A recent study of business boards by Stanford University yielded the following results:
- Only one-third (36%) of board members surveyed believe their company does a very good job of accurately assessing the performance of individual directors.
- Almost half (46%) believe their boards tolerate dissent.
- Nearly three quarters of directors (74%) agree that board directors allow personal or past experiences to dominate their perspective.
- And, perhaps most significant, the typical director believes that at least one fellow director should be removed from the board because the individual is not effective. *
Given that many of these business boards have the financial power to employ legal counsel or consultants to conduct a rigorous impartial evaluation, what can a nonprofit board, with limited financial resources, do to make sure that the board and its members are being fairly evaluated to drive change?
Ask The Tough Questions: No matter what process is used in the evaluation, the board has to address some difficult common questions. These include:
- To what extent are board members overly compliant with the wishes of the board chair or CEO? Having been a veteran nonprofit board member or a consultant with dozens of others, I find there is a tendency for nonprofit board members to “go along to get along. As a result, the board tends to be compliant with the wishes of the board chair, the CEO or an influential director. Rigorous/civil dissent is not part of meeting discussions.
- Leadership selection discussions are rarely a priority. Often, through lack of interest or the organization’s formal culture, the board has little contact with staff members below the senior management level and little interest in assessing where future management strength can be developed.
- I have yet to encounter a nonprofit board that is willing to discuss its effectiveness in terms of overall strengths or weaknesses. Critical tough questions are: Are all members contributing at a minimum “get or give” level? Especially between meetings, how can board’s internal communications be improved? To what extent does the board become involved in micromanagement or perpetuate it long after the board has outgrown the startup stage? For example, I observed one mature board make a decision about the timing of fundraising events and then spend the next hour brainstorming the types of events that might be developed—clearly a management responsibility to investigate.
- The strategic strength of the board. Nonprofit board member backgrounds should be aligned with the emerging needs of the nonprofit. Examples, if fund development is going to be a priority, a person with event planning experiences should be recruited. If the reserve fund return is not being maximized, a person with a financial background, not a CPA, is required.
- The ineffective nonprofit director. It is the most vexing problem that boards face. This person’s behavior can range from one who monopolizes discussions to the person who attends meetings but never makes any financial or other types of contributions. Some boards claim that they can approach the problem by asking each director to assess the effectiveness of his/h colleagues, but in decades of nonprofit governance experiences, I have never encountered a board that has had this process in place.
Review Current Practices: If the board has never been self-evaluated, to do a proper self evaluation, these steps are important:
- Develop a questionnaire to be completed by all board members. It should be carefully crafted to determine how the board as a group and each individual director contributes to enhancing the organization’s mission.
- The committee assigned to the project should seek the assistance of someone with professional evaluation competence to guide the work. Hopefully he/s will accept the assignment on a pro bono basis. This also can be an interesting project for a small group of graduate students, guided by a knowledgeable professor. Because of the confidential nature of the material, no more than three students should be involved.
- Develop the processes for dissemination, confidentiality, collation of materials and organization of survey information. Again, engage a professional to assist with these efforts.
Traditionally, nonprofits use a simple questionnaire to evaluate the organization and the CEO. Their development processes vary widely, and their usefulness often can be questioned when not all directors take the time to thoughtfully respond to the survey or when it is developed by committee. However, board self-evaluation needs to be completed with professional assistance, and the results reported with diplomatic care to drive positive board change.