Board micromanagement

Nonprofit Board Members—Are They Aware of Their Independent Director Duties?

Nonprofit Board Members—Are They Aware of Their Independent Director Duties?

By Eugene Fram     Free Digital Image

The vast majority of nonprofit board members serve as independent directors. They are not members of management, have other occupations as their major focus, but have some significant responsibilities to a community, profession, government or professional/trade association. Mary Jo White, Former Chair, U.S. Securities & Exchange Commission, outlined the responsibilities of fund board members who also are independent directors to overview the investment dollars made by 53 million U.S. households. Many of her comments, in 2016, easily apply to nonprofit board members and their responsibilities as Independent directors. Note: The italicized materials following are White’s direct quotations. * (more…)

Two Nonprofits Merge: Synergy or Collision Course?

Two Nonprofits Merge: Synergy or Collision Course?

By: Eugene Fram     Free Digital Image

Having led a merger committee that resulted in a successful merger with another nonprofit, I thought my field observations might be of interest to others contemplating a merger. These comments center on a merger of two equal partners, which plan to form a new organization, not the acquisition of one nonprofit by another. (more…)

Can Groupthink Hamstring Change on a Nonprofit Board?

Can Groupthink Hamstring Change on a Nonprofit Board?

By: Eugene Fram        Free Digital Image

Dictionaries typically define groupthink as “…the lack of individual creativity, or a sense of personal responsibility that is sometimes characteristic of group interaction.” In my opinion, the process is as lethal to the nonprofit board as smoking can be for humans. It ties boards to past experience and discourages experimentation. Since many nonprofit charters require boards to “conserve assets” and board members are characteristically volunteers, the nonprofit culture inevitably defers to groupthink–it’s in their DNA! “One goes along to get along.”
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Can Nonprofit Management Usurp Board Responsibilities?

Can Nonprofit Management Usurp Board Responsibilities?

By Eugene H. Fram     Free Digital Image

On balance management will always have more information about the organization than volunteer board members. As a result, board members must be proactive in seeking information from management and a variety of other sources, even if they must involve employees other than senior management. Following are three field examples showing what has happened when boards failed to be proactive (more…)

Can Only Three Nonprofit Board Committees Engage Directors Meaningfully?

 

Can Only Three Nonprofit Board Committees Engage Directors Meaningfully?

By: Eugene Fram

Current research shows that the average nonprofit board has an average of 4.5 standing  committees, down from 6.6 in 1994. * I suggest three standing committees. ** This three-standing committee configuration is flexible. Its strength is that it generates a coordinated robust review of the past board experiences to drive an emphasis on policy development and strategic planning. Organizations know where they have been, are thinking about the future but are not mired in micromanagement

    A Policy/Strategy Focused Board

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How Can A Chief Operating Officer (COO) Advance Your Nonprofit Organization?

How Can A Chief Operating Officer (COO) Advance Your Nonprofit Organization?

By: Eugene Fram

In my decades of involvement with nonprofit boards, I have encountered several instances in which the CEO has failed to engage the services of a COO– when this addition to the staff was clearly needed. In each case and for whatever reasons, this reluctance to act left the nonprofit organizationally starved.

This means that the CEO continues to handle responsibilities that should have been delegated, some of which a predecessor may had assumed during the start-up stage. I once observed a nonprofit CEO with an annual $30 million budget personally organize and implement the annual board retreat, including physically rearranging tables/materials and cleaning the room after the retreat! When top leadership is deflected in situations as this, client services and the general health of the organization is likely being negatively impacted. (more…)

The 12 New Year’s Resolutions EVERY Nonprofit Board Should Make

The 12 New Year’s Resolutions EVERY Nonprofit Board Should Make

 

By: Eugene Fram   Free Digital Image by Stuart Miles

Now that we’ve moved into December, I’m starting to see a bigger and bigger number of articles on one specific topic – New Year’s Resolutions.

And I came across some interesting numbers.

More than 40% of Americans make New Year’s Resolutions – exceeding the 33% who watch the Super Bowl each year. But as many as 80% of those “self-promises” fail by the end of February, and ultimately only about 8% are actually kept.

There’s a solution, of course. The experts who understand these things – say there’s a much higher likelihood that you’ll stay on your New Year-inspired self-improvement path if you come up with resolutions that are clear, simple, tangible and observable (measurable). The goal, of course, is to create positive impacts for clients.

I have to tell you: Not only did this advice make tremendous sense to me; it also inspired me.

After all, if regular folks can make resolutions and find a path to success, why shouldn’t organizations do the same?

And that’s especially true of all types of nonprofit organizations – which will face one of their most-challenging environments in years in 2019.

So I devised a list of Resolutions every nonprofit leader should consider in the New Year.

And here’s how to do it: (more…)

Reversing Traditional Nonprofit Board Barriers

 

 

Reversing Traditional Nonprofit Board Barriers

By: Eugene Fram          Free Digital Photo

Clearly the purpose of a nonprofit board is to serve the constituency that establishes it—be it community, industry, governmental unit and the like. That said, the “how” to best deliver that service is often not so clear. An executive committee, for example, can overstep its authority by assuming powers beyond its scope of responsibility. I encountered this in one executive committee when the group developed a strategic plan in an interim period where there was no permanent ED. The board then refused to share it with the incoming executive. In another instance, an executive committee took it upon itself to appoint members of the audit committee—including outsiders who were unknown to the majority on the board.

The fuzziness of boundaries and lack of defined authority call for an active nonprofit system of checks and balances. For a variety of reasons this is difficult for nonprofits to achieve:

  • A typical nonprofit board member is often recruited from a pool of friends, relatives and colleagues, and will serve, on a median average, for four to six years.   This makes it difficult to achieve rigorous debate at meetings (why risk conflicts with board colleagues?). Directors also are not as eager to thoughtfully plan for change beyond the limits of their terms. Besides discussing day-to-day issues, the board needs to make sure that immediate gains do not hamper long-term sustainability.
  • The culture of micromanagement is frequently a remnant from the early startup years when board members may have performed operational duties. In some boards it becomes embedded in the culture and continues to pervade the governmental environment, allowing the board and executive committee to involve themselves in areas that should be delegated to management.
  • The executive team is a broad partnership of peers –board members, those appointed to the executive committee and the CEO. The executive committee is legally responsible to act for the board between meetings–the board must ratify its decisions. But unchecked, the executive committee can assume dictatorial powers whose conclusions must be rubber-stamped by the board.

Mitigating Oversight Barriers: There is often little individual board members can do to change the course when the DNA has become embedded in the organization. The tradition of micromanagement, for example, is hard to reverse, especially when the culture is continually supported by a succession of like-minded board chairs and CEOs. No single board member can move these barriers given the brevity of the board terms. But there are a few initiatives that three or four directors, working in tandem, can take to move the organization into a high-performance category.

  • Meetings: At the top of every meeting agenda there needs to be listed at least one policy or strategy topic. When the board discussion begins to wander, the chair should remind the group that they are encroaching on an area that is management’s responsibility. One board I observed wasted an hour’s time because the chair had failed to intercept the conversation in this manner. Another board agreed to change its timing of a major development event, then spent valuable meeting time suggesting formats for the new event—clearly a management responsibility to develop.
  • “New Age” Board Members: While millennial directors may be causing consternation in some legacy-bound nonprofit and business organizations, certain changes in nonprofits are noteworthy. Those board members in the 40- and- under age bracket need some targeted nurturing. I encountered a new young person who energized the board with her eagerness to try to innovative development approaches. She was subsequently appointed to the executive committee, deepening her view of the organization and primed her for board chair leadership.

Board members who understand the robust responsibilities of a 21st century board need to accept responsibilities for mentoring these new age board people, despite their addictions to electronic devices.

  • Experienced Board Members: Board members who have served on other high-performance boards have the advantage of being familiar with modern governance processes and are comfortable in supporting change. They are needed to help boards, executive committees and CEOs to move beyond the comfortable bounds of the past. They will be difficult to recruit, but they are required ingredients for successful boards.
  • NEW Projects: Boards and the CEO must be bold and try new approaches to meet client needs. For example instead of going through a complete planning process for a new program the board must ask management to complete a series of small experiments to test the program. When a series of results are positive, the nonprofit can work on a plan to implement the program.

Conclusion: Individual board members working alone will probably become frustrated in trying to contend with the three overview barriers discussed. But working with three or four colleagues, over time, on a tandem basis, they can make inroads on the barriers. Meetings can become more focused on policies/strategies, new age board members can become more quickly productive, experienced board members can become role models and new programs and other projects can be more quickly imitated via the use of small scale experiments.

Can Nonprofit Management Usurp Board Responsibilities?

Can Nonprofit Management Usurp Board Responsibilities?

By Eugene H. Fram

On balance management will always have more information about the organization than volunteer board members. As a result, directors must be proactive in seeking information from management and a variety of other sources, even if they must involve employees other than senior management. Following are three field examples showing what has happened when boards failed to be proactive (more…)