By: Eugene Fram Free Digital Photo
Viewers may question my taking time to develop this post when a Google search, using the above title, shows about 302 million listings recorded in 0.63 of second! The answer is that I located a board article with a few interesting insights, relating to for-profit boards, that also can be useful to the selection of nonprofit directors. * Following are some of the unusual ideas.
- Select For Job Background: Nonprofit boards do look for a diversity of backgrounds—physicians, attorneys, ministers, etc. But they also need to address more specific needs. Example: One board I counseled decided it needed a director who has a marketing background, the nonprofit’s funding was significantly dependent on two major events for over 50% of its annual donations. Therefore probing the issue further, it was agreed to look for a marketing person who had event planning experiences. A marketer with an advertising background would not be as helpful as an event planner.
- Select By Focusing On The Business Model: The key to understanding the business model is the ability to understand the financial statements. Just recruiting an accountant does not fill the bill. While every board member needs to be able to evaluate monthly or quarterly statements, there should be at least one person on the board who has a strong familiarity with fund accounting, the financial language of nonprofits
- Select The Growth Stage: Obviously, nonprofit startups need a group of board members who can assume responsibility for efforts that later will be taken over by paid staff. But every startup needs at least one visionary board member who makes certain the nonprofit changes with milestones, usually marked by revenue and/or staff increases. Otherwise progress is impeded or opportunities missed. Board agendas, in these situations, become loaded with operational issues and strategy opportunities are ignored. Management and staff remain highly dependent on board approvals. Unfortunately, some CEOs like this arrangement because, when something goes wrong, they can claim: The board told me to do it.
- Select For Same/Similar Missions: Most board members work different areas from the nonprofit’s mission area. As a result, one or two directors should have backgrounds in allied fields. Example: A nonprofit dedicated to solving heart problems might have an executive director or development director from a cancer nonprofit serving as a board member.
- Select For Courage of Conviction—What’s Best for the Nonprofit: Board members who will consistently vote, in their judgements, what is best interests of the nonprofit and its mission. I have observed too many who vote to get along with board colleagues, the board chair or CEO.
Over decades of experiences as a nonprofit board member and consultant, I have encountered directors who have abandoned their convictions and have taken the easy road by.
- Selecting board chairs on the bases on their personalities and personal appearance.
- Engaging a weak local CEO to avoid moving expenses.
- Acting as a “rubber-stamp” to avoid unpleasant board discussions.
- Allowing a CEO to maintain the status quo instead of innovating.
- Failing to react to small “red flag” situations generated by management or staff.
Nonprofit boards have difficulty in bringing about change when:
- Recruitment is continually constrained to friends, colleagues and relatives.
- Most on the board are not conversant with fund accounting.
- Organization and board processes are not in line with revenue and staff growth.
- Board and management fail to look well beyond their similar peers for new idea to serve clients.
- Board members continually fail to state their convictions and “go along to get along. “