Nonprofit Board Cultures Need To Be Defined
By: Eugene Fram Free Digital Image
Over several decades of contacts with nonprofit boards, I have yet to find one that has spent any time trying to define the organization’s culture that delivers service. Yet every organization has one. It defines what the organization has done well and what needs to be changed. It can grow over years haphazardly or change quickly when new board members are elected or when a new CEO is appointed. Those newly appointed, for better or worse, can change the organization’s mission as well as its culture. Nonprofit staffs that work a few levels below the board and CEO organizationally are especially sensitive to cultural movements emanating from above. They know that a change in culture can affect their work and livelihood.
The reason that nonprofit boards rarely try to define the cultures of their organizations is that it is an amorphous subject. Ask a group of directors to define the culture of their board or the organization and quite different answers will be given. Yet there are commonalities that arise that can form the culture—conservative vs. liberal policies; legacy vs. future focused programs; operations are clearly defined vs. CEO dominance assumes board powers in a de facto manner; etc. But cultures need to be defined: Uber failed in the process, while Microsoft has an ambition to transform Microsoft from “a know it all” to a “learn it all culture” *
I recently found a list of 12 attributes of a strong organizational culture. ** Following are six that I suggest that nonprofit boards should consider in assessing their needs of the organizations. My comments provide some practical ways that each can apply to nonprofit boards and organizations.
Respect/Fairness: Does the board respect the CEO as a competent manager? This may occur when the CEO is appointed from a staff position and the board continues to perceive him/her as a field specialist who needs to be micromanaged. One nonprofit board member described his culture as, “…we tell the CEO exactly what to do”.
Trust/Integrity: These attributes are usually listed in board operation guidelines. However, the CEO has significant responsibility for upholding them personally and conveying their importance to staff. Major nonprofit (e.g., United Way) and business (e.g., Wells Fargo) failures have occurred when the board has failed to effectively overview trust/integrity efforts.
Change/Adaptability: These will not occur until the board and CEO are in full agreement. Boards can mandate a change, but if the CEO is not in agreement, it will not become operational. Depending on the importance of the change, the board members will have a difficult choice—dismiss the CEO or accept his/h failure to respond. If a dismissal is based on a majority vote, it will likely leave a board cleavage that can last for several years.
Results Orientation: In the 21st century, results need to be reported in terms of both outcomes and more importantly in terms of impacts. Boards are beginning to understand that program changes are achievable in terms of their stated goals, but will not have client impacts. For example, a school-counseling program can create positive outcomes for students but not motivate them to become life-long learners.
Engagement: Two perspectives are important. From a board perspective, this means determining whether or not each board member feels his/h work is meaningful. From a staff perspective, it means overviewing the evaluation process to determine whether or not it is viewed as a fair and a motivating one.
Learning Opportunities: Both management and staff need to have local and national opportunities to grow professionally, which can be limited by budget restraints. Where budgets are extremely tight, the nonprofit might be willing to share the cost of learning opportunities with professionals. It’s especially important that the CEO have growth opportunities. She/h needs to be able to alert the board members to the latest thinking in the mission field. In turn, the board needs to be recruiting board candidates that fit the next phase of organizational growth.
Decision Making: During board discussions, the differences in cultural backgrounds can be seen most clearly when the decision centers around financial investment strategies. Those who take the charter’s requirement that investment need to be conservative will want to park funds in savings accounts or equivalents. Others coming from a higher risk environment may see the charter allowing for investments that can be described as business risk levels. Cultural norms must be considered in decision-making. If a proposal violates one or more of the organization’s norms, it is certain to be rejected.
An organization’s cultural norms are hard to define because hard data are often difficult to locate. However, every nonprofit has a culture and board members have an obligation to define it. They need to know what is being done well and what needs to be changed. This is much more than a listing of strengths, weaknesses, opportunities and threats. The norm drives the decision, action and overall performance of the board and the organization. It is up to the board to make sure all involved understand it.