CEO Evaluations

21st Century Nonprofit Boards Need to be Proactive in Strategy Development

21st Century Nonprofit Boards Need to be Proactive in Strategy Development

By: Eugene Fram       

Most Boards do not excel at strategy planning. In fact, when the subject is included on a meeting agenda, it usually produces a general lack of enthusiasm. A McKinsey study * cited weakness in for-profit boards dealing with the topic. And in my opinion, similar deficits are endemic to nonprofit boards whose response to strategic proposals is often simply– “ to review and approve.”

What causes these vital governing bodies to be passive when the future of the organization is obviously at stake? First, most nonprofit boards meet between 8 and 12 times a year, for what averages to about 1.5 hours monthly. With an agenda crammed with compliance issues and staff reports, there is little time left for board members to dive deeply into a discussion of future transformative efforts on behalf of the organization. When a new strategic plan is developed (that may only occur once every 3-5 years, with a limited perspective), its implementation is not as rigorous as it should be—even in high performing boards.

According to the McKinsey study, only 21% of business board members claim to fully understand the firm’s total strategy. Because of their diverse backgrounds, the percentage of uninitiated nonprofit board members is probably similar or even higher!

Next, the study also reports: “…there is often a mismatch between the time horizons of board members and that of top management.” Since the median tenure for a nonprofit board member is between four and six years, it follows that management‘s experience with the mission environment exceeds the vast majority of board members. Since the outset of the 2009 recession, it becomes critical that a dialogue between board and management brings focus to economic priorities. When the economic environment remains more dynamic, it requires much more discussion.

Questions that board and management need to consider to overcome these issues.

• How well do board members understand the mission dynamics? In terms of nonprofit experience, management has a better understanding of the mission’s environment. As a result, management needs to be proactive in educating board members about the dynamics involved. This can take place at meetings, retreats or engaging outside experts to interact with board members. Where it is possible and appropriate, management should invite board members to join them at local or regional conferences.

• Has there been enough board-management debate before a specific strategy is discussed? “Board members should approach these discussions with an owner’s mind-set and with the goal of helping management to broaden its thinking by considering new, even unexpected, perspectives.” During these debates management should provide information on key external trends affecting the mission. It also needs to review: strengths and weaknesses of staff talent to achieve the mission, the abilities of the nonprofit to differentiate itself and to increase services to its clientele. All of this can keep the organization from perpetuating the status quo—providing small budget increments and keeping current clients satisfied, not seeking growth.

• Have the board and management discussed all strategic options and wrestled them to the ground? Nonprofit board members and their managers may not be used to having high-quality discussion like these. To provide bases for these types of conversations the board must view management as a set of peers with different responsibilities. “Creating a participative, collaborative dynamic while maintaining a healthy tension is critical.”

“Developing strategy has always been complex—and becomes more so with a board’s increased involvement, which introduces new voices and expertise to the debate and puts pressure on management teams and board members alike to find the best answers.”

* http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/tapping-the-strategic-potential-of-boards

Is Your Nonprofit Forward Focused or a Prisoner of the Past?

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By Eugene Fram                          

It’s no secret that some board members cruise through their term of board service with minimal involvement. McKinsey Company, a well-known consulting firm, has suggested five steps that can be used to counteract this passivity in for-profit boards. * With a few tweaks, McKinsey suggestions (in bold) are relevant to the nonprofit board environment where director engagement is often a challenge.

Engaging between meetings: Nonprofit boards traditionally meet monthly, bimonthly or quarterly. Unless the board is a national one, these meetings range from one to three hours, with the three hours being typical of quarterly meetings. The meeting agendas are usually packed, and they leave little time for individual directors to enhance discussions. ** In addition, a sense of anonymity develops among board members who do not know each other personally, a significant barrier to team building. I have encountered nonprofit boards where disconnect between board colleagues is simply a nod—or less– when passing each other.

Board cohesion based on interpersonal relationships has an important impact on the quality of board discussions. It allows a board member to more fully understand the perspectives and goals of his/her fellow board members or “where they’re coming from.” With this information at hand on both sides of a discussion, it increases the possibility of creating “win-win” impacts for the nonprofit.

Responsibility for promoting between-meeting engagements needs to rest with the board chair. As a staring point, the chair can sponsor a few informal Jefferson dinners. The topic should be a cause which can excite the invitees. It needs to be, a challenge to the directors. ***

Engage with strategy as it’s forming—do not just review & approve it: Traditionally most of what becomes an organization’s strategy will emanate from the management and staff. But the board must proactively help to form strategy or step in to fill gaps when the management refuses to do it.

In forming strategy the board has an obligation to make certain all viewpoints are heard. Staffs as well as management ideas need to be considered. In addition, the board may need to take direct actions when the organization fails to fulfill a mission obligation. Example. A counseling agency only offered services during normal business hours–9 am to 5pm, five days a week. Its board required management to offer services, 24/7 with an emergency line when the office was not open. The management, a creative group, found a way to do it, without increasing costs.

Cultivate talent: The nonprofit board has several responsibilities in regard to talent.   First, it must engage and then evaluate the CEO. This is a complex duty because the vast majority of the board members are not full-time employees and many have only tangential attachments to the organization’s mission field. Second, the board must overview the quality of the staff talent so that it is in line with budget constraints. Third, it must be aware of those within the staff who may be promotable to management. Finally it must be alert to succession opportunities internally and externally in the event the CEO were to leave abruptly. Succession planning for the CEO must also include considerations about the talents that will be needed beyond the current one.

Engage the field: Since nonprofit board members have full-time occupations outside the mission field, it’s important that they receive a flow of information about leading edge changes taking place outside the organization. However, CEOs sometime can operate a “mind the store” nonprofit, by looking at past successes without a visionary component. To help avoid this occurrence, specific directors might be assigned to become more deeply familiar with key projects in order to assess their progress.

Engaging on tough questions: A difficult task on a nonprofit board where politeness is an overriding value. Peers are friends and business associations and generally there are few potential penalties for “going along to get along.” In all my decades as a nonprofit board member, I have yet to see one board member ask that his/h dissenting vote be recorded in the minutes. A necessary action when he/she feels that the vote being passed by the majority may lead to harming the organization.

*http://www.mckinsey.com/business-functions/organization/our-insights/changing-the-nature-of-board-engagement

** In California, the Brown Act might prohibit such meetings. The Brown Act covered concerns over informal, undisclosed meetings held by local elected officials. City councils, county boards, and other local government bodies that were avoiding public scrutiny by holding secret “workshops and study” sessions.

***For details on the background and planning for Jefferson dinners see: http://jeffersondinner.org/jefferson-dinner/

CEOs Need To Develop Partnering Relationships With Board Members

By Eugene Fram              

When a CEO publicly introduces a board member as “my boss,” (as I have overheard more than once) there is a problem. It’s true that both parties—CEO and board member—have specific roles in the success of a nonprofit organization. But the hierarchy of authority should be deemphasized when it comes to interpersonal connections. The most effective mindset for CEO and board members is to view each other as partners in working to achieve the organization’s mission and their impacts.

The CEO’s efforts to cultivate such relationships are key. The following are some initiatives that he/she can utilize: *

• Partners need to know each other as individuals: With overcrowded meeting agendas, rambling debates and hurried exits, there is often not enough time to know the person’s name who sits next to you, let alone anything about his life outside the boardroom. Even off-site meetings for informal exchange are hard to schedule and poorly attended. This lack of human connection is a real deficit in internal board relationships. The CEO can help in a number of ways.

1. Take a few minutes at the beginning or end of the meeting to allow board members, if they choose, to report something new or important in their personal or professional lives.
2. The CEO and/or board members should try to meet with individual board members or small groups to suggest new or unique ideas for improvement within the organization. Show professional regard for their responses even if it is not actionable.
3. Create social occasions by inviting board members and their significant others to participate informally. Or ask some board members to plan gatherings that could be as casual as afternoon wine and cheese or self paid dinners out together.

• Connect partner directors to the CEO’s real work: Since most nonprofit board members’ full-time interests and professions are not directly related to the organization’s mission, it’s important for CEOs to educate board members more deeply about what goes on routinely to achieve the mission, especially in those areas (e.g. human resources) in which the decision-making information is quite ambiguous.

For partner board members wanting deeper organization knowledge, the CEO needs to invite them to accompany him/h to local, regional or national professional meetings. Not only do these offer professional benefits, such as understanding accrediting processes, but it also offers the CEO an opportunity to solidify partnerships. Example: As a young faculty person at a university, the senior VP of Finance occasionally would invite me to accompany him to professional meetings. He would use travel time to orient me on macro issues facing the university.

• Energize board meetings: In recent years business meetings have been described as “death by power point.” Many presentations ranges from 20 to 30 power point cells when 8-10 can highlight the story. There are many actions the CEO, with the concurrence of the board chair, can take to develop these into partnership relations.
1. Keep minutiae off the agenda. If it crops up because a few directors find a small topic of tangential interest, the chair has a leadership obligation to take action by saying, “How does the X issue contribute directly to achieving our mission? Let’s set up a process where those interested in this issue can discuss it after the meeting.”
2. Place the boilerplate topics at the end of the meeting.
3. Staff reports on their operations are necessary at every other board meeting. While the CEO has an obligation to make certain they are brief and well presented, the chair has to make certain that board member questions are precise so that the staff person can stay within allotted time.
4. Use a “consent agenda” process for items about which there appears to be substantial agreement.
5. Make certain that every new chair is reasonably familiar with Robert’s Rules of Order to encourage civil discussion and conduct an orderly meeting process. It also can be helpful to appoint a parliamentarian should the rule-book need interpretation.
6. Focus on action items. “Send board members out the door with a clear idea of what they need to do between now and the next board meeting”** (and with the feeling that he/s has met with a group of high energy partners.)

• Meaningful Work: As much as possible, the CEO, with the board chair, has to make certain that every director views his/h efforts as meaningful to achieving the mission: Example: A CEO devoted an entire meeting to reviewing a powerpoint presentation he was planning to make. This was the final straw for a board member, who felt his time was being squandered. He immediately resigned his position with the usual excuse of increased work responsibilities.

A Leadership Challenge: Bonding with the board and encouraging board member connections is a tall order for a CEO with full operational responsibilities. As board members’ terms expire and new people step up to the plate, the challenge to build relationships is continuous. Even some termed-out board members need meaningful contact and must be kept interested and invested in the nonprofit’s development. The CEO, with the strong support of the board chair, should provide leadership in these important tasks—it will help the organization to move forward while maximizing the benefits to its clients.

*http://boardassist.org/blog/bored-blazing-7-steps-get-board-reconnected-re-engaged-enth

**Ibid

How A Nonprofit Board Member Can Initiate Positive Change

How A Nonprofit Board Member Can Initiate Positive Change 

By: Eugene Fram             

A nonprofit board member comes up with an idea that he thinks will do wonders for the organization. He is convinced that establishing a for-profit subsidiary will not only be compatible with the group’s mission but may even bring in new sources of revenue. It’s his ball–now what’s the best route to run with it? All too often in the nonprofit environment, initiating change can be as daunting as trying to get consensus in the US Congress! There are, however, certain interpersonal levers, which, if pushed, can accelerate the process–although one hopes that not all the levers will be needed in any specific situation.

  • Board Colleagues – Quietly enlist as many board colleagues as possible to support the idea.  Enlisting support from board opinion leaders is critical — then open up the discussion to others in informal conversations. Premature presentation to the entire board could stall the process.
  • The CEO – Either before or during conversations with board colleagues, be certain to review the proposed change with the CEO.  He/S will voice acceptance, rejection, or asks to consider it.  If s/he is opposed to the change, the board member only has these alternatives – wait until a new CEO is engaged; seek board termination of the CEO that is generally not a good move; or wait for better timing and board support.  It is foolhardy to seek the change in face of the full opposition of the CEO. If the CEO will support the change, it may be a good idea for the board member to step back and make the CEO the leading change agent.
  • Revenues – No matter how good the change, implementation will likely require financing beyond current budget allocations.   Consequently, a plan for fund  development from foundations and individuals will be needed for the final proposal.
  • Other Organizations—Other organizations with similar situations could serve as useful models. An on-site visit will provide information and enable the nonprofit to develop benchmarks that will reassure those that remain skeptical.
  • Measurement–Establish measurement metrics before the change is launched.  Do not hesitate to use imperfect metrics to track progress and drive change during the development period.  (http://bit.ly/OvF4ri)

Nonprofit board members have relatively short tenures—typically four to six years or less– and are often regarded as temporary overseers. There are opportunities to be much more than that if the board operates in a 21st century generative manner. The board climate should be open to ideas of positive change, and the creative board member must appropriately adapt or adopt the above levers to ensure effective acceptance and implementation

Do Nonprofit Boards Proactively Engage Their Stakeholders?

Do Nonprofit Boards Proactively Engage Their Stakeholders?

By: Eugene H. Fram

Nonprofit directors and trustees need to take overview responsibility for engaging all of the organization’s stakeholders.

The first step must involve defining the term“stakeholder” in the broadest action oriented terms. Most boards will quickly agreethat clients and board members are stakeholders, but what about others such as external auditors and significant vendors. For example, if a charity is depending on one vendor for a substantial part of its grocery supplies, that vendor needs to be viewed as a stakeholder—its failure to delivery properly affects the efficiency and effectiveness of the organization.

Following are some guidelines for engaging all types of stakeholders. Don’t marginalize, dismiss or ignore any stakeholder: Nonprofits do this with termed-out board members. * After six active years, a typical tenure, many former board members only received boilerplate materials or development solicitations. The board’s rationale is that they have served welland there is a downside on more frequent communication.This tactic assumes all board members want such a communications approach.

However, for board members who have been very active, it maybe counterproductive from development and future interest viewpoints. The ED and Board Chair need to keep a list of name of this special group and see that they keep in personal touch with the members once or twice a year.

I have observed several cases in which this unintentional marginalized has resulted in losing substantial financial gifts and needed talent. In both cases,the termed-out board members have declined with the excuse that they have been too far away from the activities of the organization. Using members of this group in advisory capacities can avoid such marginalization by forming them in alumni groups or including them insocial occasions and celebrations.

Recognize who may be a true partner: Such a partner can range a vendor that has supplied the organization or a volunteer whose interests have moved to another nonprofit. “ It is generally easier to build consensus,request help and engender trust when those who support you are well-informed, candidly an truthfully.” *

If stakeholders don’t know about the nonprofit’s challenges and needs, even the best-managed nonprofits have their ups and downs. During the latter periods, having stakeholders knowledgeable about the issues can help to dissuade some to avoid protesting job cuts and other receactions. Self–perpetuating boards can became insular and lose touch with other stakeholders: “These boards tend to retreat into a silo-or bunker-mentality that only serves to intensify bad habits and practices, as well as preclude consideration of other that only serves to intensify bad habits and practices, as well as preclude consideration of other perspectives.” * At difficult times, the board can tend to lose trust in the ED even when the problem is beyond the EDs control. If the board is at fault, it may look for a scapegoat on which to hang the the problem, often people in senior management.*

http://www.huffingtonpost.com/eugene-fram/how-does-your-nonprofit-r_b_5393736.html* https://www.linkedin.com/pulse/what-sweet-briar-reminded-us-alumni-engagement-mark-w-jones

OnceAgain! How Can Nonprofit Boards Support Management & Staff and Refrain From Micromanaging?

Once Again! How Can Nonprofit Boards Support Management & Staff and Refrain From Micromanaging?

By: Eugene Fram                    

The dilemma is common to nonprofit organizations. As start-ups, everyone aspires to do everything. Passion for the mission and determination to “get it right” imbue board members with the desire to do it all. But once the organization starts to mature, board roles shift to focus more broadly on policy and strategy issues. With the advent of qualified personnel to handle operations, there are many overview activities, sans micromanaging, available to board members. Following are some ways that boards can assist and demonstrate support for operations, CEOs and staffs without interfering.

    • Respect Management & Staff: The Board needs to accept the CEO as professional manager, not as a person dedicated to a field specialty—police officer, physician, attorney, etc.—with part-time management efforts. * He/s should know how to hire well, interrelate with staff, board and other stakeholders and make certain day-to-day operations are effective and efficient. It is possible, however, to have a mediocre board and an effective management and staff that is devoted to the nonprofit’s mission. Hopefully, a few board members recognize the situation and are able to build a culture of respect for the management and staff, often a difficult task when the board is micromanaging the nonprofit.
    • The Importance of Long-Term Goals: Currently nonprofits tend to plan on a three-year to five-year cycle because the environments in which they operate change so quickly. With nonprofit board members having 4-6 median terms, this suggests many will have one short-term outlooks. But, in my opinion, much longer-term planning needs to be considered, perhaps for as long as ten years. This way current planning can influence longer-term planning. This generative thinking will also provide some benchmarks for the types of abilities and skills that future CEOs will need to possess.
    • Understand Psychological & Non-Monetary Benefits: Flexible benefits are required by nonprofits to compete with business and other nonprofits paying higher wages. For example, in many areas, hospital chains compete with human service agencies for people with social-work abilities. They must also compete with businesses for computer specialists. One way is to offer flexible scheduling to all personnel needing it. Another way is for the board to formally honor staff for successes and make certain that management provides appropriate praise frequently, a requirement for millennial, and possibly generation Z age staffs.
    • Empower the CEO and staff: Boards need to be sure that the CEO is fully empowered to make tactical operating decisions without board interference. On an overview basis, the board needs to request management to ask small staff teams to work on projects that can yield tangible results. This will encourage groups and teams to become more responsible.

Within its overview responsibilities, nonprofit board members can be quite proactive in assisting management and staff when they meet routine operational challenges. The above discussions demonstrate ways this can be accomplished. Nonprofit boards can add to them to meet local challenges.

* Some growing nonprofits unfortunately elect the CEO from the staff and allow him/h to continue to have some staff responsibilities.

The “Compliant” Nonprofit Board—A CEO Takes Charge Like a Founder!

The “Compliant” Nonprofit Board—A CEO Takes Charge Like a Founder!

By Eugene Fram             

According to BoardSource, “ ‘Founderitis’ and ‘founder’s syndrome’ are terms often used to describe a founder’s resistance to change. When founderitis surfaces, the source of the dilemma often is a founder’s misunderstanding of his or her role in an evolving organization.” * I would like to suggest that a nonprofit CEO also might suffer from the “founderitis illness,” sometimes with the board only being mildly or completely unaware of it.

Board Member Tenure versus CEO

The average board member tenure is six years (e.g., two three year terms) as compared with the average almost 13-year CEO tenure. ** The CEO has twice as longer period to influence polices and strategies. More importantly, she/h has more opportunity and time to acquire background knowledge and influence the organization’s culture.

“CEO Founderitis”—Typical Board Members & CEO Behaviors

  • The board is a dependent one, cancels or reschedules major committee/board meeting when the CEO can’t attend.
  • The CEO is overly verbose in presenting background information at meetings.
  • Concurrently, the number of board member comments is limited at most meetings.
  • The CEO places limits on the types of contacts the staff can have with board members, in the name of avoiding staff “end runs. “
  • The CEO carefully covets outside relationships and donor relationships. Board members are only marginally involved in fund development.
  • The Executive Committee does not challenge the CEO when setting the agenda.
  • The nonprofit board is satisfied with marginal gains each year, without seeking broader challenges to provide enhanced client services.
  • The CEO’s performance isn’t rigorously assessed.
  • The board rarely, if ever, overviews CEO and staff talent successions.
  • Board actions and activities are not rigorously reviewed or discussed.
  • Led by the CEO, Board resistance to change is substantial.

What should the board do if the CEO takes charge like a founder?

Three Options:

Does Nothing: This assumes the CEO is performing reasonably well in developing positive program impacts, not outcomes. (i.e, Program objectives can be achieved, but they can have little impacts on clients.)

The CEO and Board are satisfied with program outcomes as performance measures. As a result, the organization inadvertently may not be innovative. In addition, long-term organizational sustainability may be compromised. There may be long-term challenges on the horizon that go beyond the typical three to five year planning cycles.

A majority of board members may feel comfortable with this option because the CEO acts strongly, even though he/s occasionally may encroach on a board’s perogrative.

Makes Changes: This will probably require the CEO & Board to change, modifying some of the behaviors listed above. The CEO then forms a partnership with a changing independent board.

Some board members will be satisfied the status quo, little is required of them. But others may want to remove a CEO who leads like a founder. Internal conflict will likely arise on both sides to delay or abort change.

A Solution? Don’t rock the boat. Only when the CEO, especially one with long tenure, suffering from “founderitis” makes a graceful exit will there be opportunity for change. Hopefully, the new CEO will develop a partnership culture with the board.

* https://boardsource.org/resources/founders-syndrome/

** See: “Average tenure of nonprofit CEO Nonprofit Times”

For-Profit Boards Versus Nonprofit Boards: Similar Challenges?

   

By: Eugene Fram  

For-Profit Boards Versux Nonprofit Boards: Similar Challenges?                               

The wise person learns from his/h own experiences. The wiser person learns from the experiences of others. Chinese Proverb

The CEO Forum published an article covering the governance views of five business board members, known for their wisdom and vision.   Following are some of topics in the article that relate to nonprofit boards. *

Good governance is dependent upon well-curated boards. This means that nonprofit boards must look beyond the functional competencies (e.g. accounting, marketing, law, etc.) for candidates. Within these groupings, they need to seek candidates who have strategic outlooks, are comfortable with critical thinking and have documented leadership skills.   This requires recruiting and vetting efforts that go well beyond the friends, neighbors and colleagues who traditionally have been the sources for board positions. Also related is the issue of board succession, since that many will leave the board after a four to six year period. The current board(s) has an obligation to make rigorous recruiting and vetting become part of the nonprofit’s culture.

Assessing long-term sustainability. In the past, nonprofits have projected longevity because there will always be a need for the services or products they provide. This is no longer an assured proposition. Nonprofit day care centers now must compete with those that are for-profit. Improvements in medication have decreased the need for individual counseling and many new technologies can quickly solve problems that are embedded in the nonprofit’s mission.

Review governance best practices carefully! Know who is suggesting them and make certain they are appropriate for a specific organization. For example, some experts suggest that executive committees should be eliminated. However an executive committee that is responsible for a slim board committee structure can be effective in driving change and promoting better communications throughout the organization. **

Changing public accounting firms. Nonprofit accounting practice suggests changing public accounting firms about every five years. However one expert suggests, “It is important to ensure that judgment areas such as nonGAAP disclosures are well-defined, supporting calculations are well-documented and that the definitions and calculations are consistent across reporting periods.” At times of accounting firm change, nonprofit board members need to be able to add these issues to their question that they pose to management.

Ethics & Compliance. Like business organizations, nonprofits are subject to significant lapses in ethics and compliance. One study of  nonprofit fraud found that it 46% involved multiple perpetrators.  ***  As shown in the recent Wells Fargo debacle, establishing the tone for rigorous applications of a standard needs to start with the board and flow through all management levels. In the current environment, audit committees have to be especially alert and take immediate actions when red flags arise in either the ethics and/or compliance areas.   In my opinion, a nonprofit audit committee that meets only once or twice a year is not doing the necessary job.

Strategy. The nonprofit board has an obligation to help management see “around the next corner.” This involves board members assessing coming trends and sparking civil and meaningful board and committee discussions.

Board member comfort zones. Like their business counterparts, few nonprofit board members are “comfortable testing how to rock the norms.” It is easier to acculturate new directors to the current norms, a process that is inward bound and self-defeating. But a start can be initiated with questions such as, “If we were to start a new nonprofit across the street, what would it look like and who of the present board and a staff members would we ask to join us?

*https://www.forbes.com/sites/robertreiss/2017/05/22/americas-five-governance-experts-share-perspective-on-boards/#2a2ee326659a   

**For documentation see: https://goo.gl/QEL8x3

***https://nonprofitquarterly.org/nonprofit-fraud-its-a-people-problem-so-combat-it-with-governance/P

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Is Your Nonprofit Forward-Focused or a Prisoner of the Past?

Is Your Nonprofit Forward-Focused or a Prisoner of the Past?

By: Eugene Fram           

Governance arguably suffers most … when boards spend too much time looking in the rear view mirror and not enough scanning the road ahead. *

It has been my experience that nonprofits rarely address the possibilities and perils of “…the road ahead.” An endless stream of current and pressing issues can cause both Board and CEO to take a myopic view of their nonprofit responsibilities — either totally ignoring strategic issues or procrastinating a discussion of the subject. The results can be damaging to the organization. Here are some “prompts” that might guide nonprofit board members and CEOs as they attempt to provide leadership in this important but neglected area:

Balanced Agendas — Include and highlight strategic issues on every board meeting agenda (not just when a committee report is presented) until they are resolved with action plans, policy development or thoroughly discussed and removed. This constant emphasis on planning can go a long way towards achieving concrete actions on topics of future concern. A discussion of immediate issues juxtaposed with ongoing strategic concerns will provide a balanced meeting format that may possibly discourage board member’s attempts to micromanage, a very common tendency in nonprofit boards!

Short Term Focus — In a BoardSource report,  “…only 33 percent of nonprofits report that their board members are actively involved in advocating for their missions, and many organizations aren’t advocating at all.”** To inspire and challenge board leaders to actively serve as ambassadors.  The explanation for weak performance in this area is often attributed to the fact that the directors’ terms of service on the board are usually three to six years during which time people’s interest in the long-term future of the organization may be compromised. Some boards may be disproportionately represented by “millennials” whose participation comes with heavy time constraints. Problems of this type can be mitigated by seeking board members who are partially or fully retired. They are likely to be better equipped to focus on the important governance functions and the fundamentals in which the nonprofit operates. Boards need to look to look further out than anyone else in the organization… There are times when CEOs (those operationally concerned with strategy) are the last ones to see (environmental) changes coming.

Board Recruiting — Nonprofit recruiting can be a hit-or-miss process, often producing candidates who are readily available and familiar to the current board. Rarely will the committee seek out people who have strong track records as strategists and/or competent visionaries. This is a real challenge, but a forward focused board should make every effort to identify potential directors who have these types of experience and skills. The topic of recruitment is a challenging one and the process should have continual annual evaluation.

Can Nonprofit Boards Work Smarter Not Harder?
As noted earlier, nonprofit board people are often limited in the amount of time they can devote to board participation. Given these constraints, the board chair and CEO can choose from a range of options that will help orient directors to better understand the external landscape in which the organization operates. These initiatives can include visits to comparable facilities, opportunities to attend field related conferences or inviting experts in the same or similar organizations to interact with board members. The purpose is to infuse each member of the board with an informed view of the organization’s long-term future and prepare them to take the appropriate action. The CEO and board chair must address this question with a viable plan: What actually helps… (to develop) a board environment that encourages participation and allows board members to derive meaning, inspiration and satisfaction from their (board) work?

Talent: The Key to Nonprofit Success — A nonprofit board has one hiring decision to make: the engagement of the CEO. But it also has a significant responsibility to overview long-term talent development in the staff and management. The board of a family service agency needs to assure that its counselors are up to date on current modalities of counseling. A recreational organization must be operating in the context of accepted fitness practices. Annual talent reviews need to be scheduled with CEOs and the appropriate staff. In addition, individual board members, with the concurrence of the CEO, may want to have occasional professional contact with key people below the senior management.

Make strategy part of the board’s DNA — (Many nonprofit) … CEOs present their strategic vision once a year, the directors discuss and tweak it at a single board meeting (or a short retreat), and the plan is then adopted. The board’s input is minimal and there’s not enough in-depth information to underpin proper consideration of the alternatives.

An educated nonprofit board will have the depth of understanding to be alert to the future needs and problems of its organization. Typically there is usually an unanticipated “fork” in the road ahead. Status quo, “minding the store,” participation by rote are all too easy mindsets that will only hobble the progress of an organization. Board chairs and CEOs are key actors in turning an existing board environment into one that is focused on moving forward.

*Christian Casa and Christian Caspar (2014) “Building a forward-looking board,” McKinsey Quarterly, February. Note: Quotations from this article are presented in italics.

**https://boardsource.org/research-critical-issues/

 

Nonprofit Board Discourse: a Meeting of the Minds??
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Nonprofit Board Discourse: a Meeting of the Minds??

By: Eugene Fram       

Several years ago, a nonprofit board member complained to me that there was too little “conflict” at board meetings. Too few hands were raised to challenge or simply question the efficacy of certain important agenda items. Having participated in hundreds of nonprofit meetings, I have observed that this laissez-faire response still typifies a significant number of board member’s attitudes, especially for items that deserve vigorous discussion. Why is that? And why can the term conflict be  perceived as an asset to an organization that is determined to move forward?

Below are some answers based on my own experience in the nonprofit environment.

  • Major Focus is on Operations: As I have commented in other posts, focusing on operations seems to be a default option for many nonprofits. Unlike members of business boards who have substantial financial investments in their organizations, nonprofit board members are volunteers with little personal risk and with insufficient motivation to challenge the status quo. Since the median nonprofit director’s term of service is seldom greater than 6 years, a board member can lack significant interest in the nonprofit’s long-term future. In addition operational items are more concrete and inherently more interesting because many center on people related decisions. Then there’s the “nice guy” impulse—directors’ meetings are usually brief (1 to 1.5 hours) and board member are often reluctant to voice dissenting views that may offend colleagues and extend meeting times.

Encouraging “Constructive Conflict”

  • Preparation Is Critical: Review of governance agenda materials leads the way to more rigorous discussions.   This requires nonprofits to provide meeting materials at least one week in advance to facilitate fact- based discussions. Some may argue that busy board members will ignore materials well in advance of the meetings. But isn’t it a solid advantage to have some of the most interested board members well briefed for the meeting?
  • The importance of mission: As much as possible, the board chair needs to frame each agenda item in light of its impact the nonprofit’s mission.   This helps eliminate frivolous comments and questions, e.g., voting on the color of the menu at the annual diner. These distractions, like responding to tweets, detract from discussing substantive issues. Chairs can diplomatically eliminate them by simply suggesting the distraction  issue can be handled “off line.”
  • Recruitment: Nominating candidates for the board who have the abilities to interact effectively at meetings are important to improving the quality and quantity of meeting discussions.   While nonprofits often need a diversity of board members from different fields and backgrounds, they also must have a core of directors who know the differences between governance and operational activities, who understand what is involved in critical thinking, have demonstrated leadership elsewhere and have broad understandings of what constitutes strategic planning.   Otherwise the board, like the one I encountered, had many very busy middle level managers types who did well on time-constrained specific projects, but they had no interest in governance or strategic planning.   The de facto result was that the Board Chair authoritatively operated the board.
  • Getting Together: Currently, most nonprofit board members live time-compressed lifestyles and only connect with others at formal board or committee meetings. To build an effective team decision-making, board members need to know each other personally and professionally.   Board chairs and CEOs must take steps to provide social or professional occasions for the board at which directors can interact.   Sometimes a simple 10-minute agenda item at a meeting asking each member to briefly review personal or professional events can help—as proven by organizations like Rotary.

Passion vs. Passivity: The nonprofit board member who lamented the absence of “conflict” in the boardroom recognizes that an engaged and often challenging governing body is in the best interest of a healthy and forward moving organization.