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Once Again: How to Keep a Nonprofit Board Informed.

Informed.

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Once Again: How to Keep a Nonprofit Board Informed.

By: Eugene Fram   

With high performing nonprofit boards, its members will rarely be invited by the CEO to participate in operational decisions. As a result, management will always have more information than the board. Yet the board still needs to know what is happening in operations to be able to overview them.
The name of the game is for the CEO to communicate the important information and to keep directors informed of significant developments. Still, there’s no need to clutter regular board meetings by reporting endless details about operations.

Following are some practical suggestions:
• An executive director, in response to a blog post I presented, provided a most creative approach. He and the board chair have a weekly conference call, usually on Thursday. Other board members are invited to join the call if they have time. A few days later, the ED sends a brief e-mail to all board members highlighting the important events that took place during the week. (He joked that his high school English teacher would never approve of its format, but the board is always full informed.)

• Probably the more traditional way of keeping board members aware of what is happening within the organization is to have staff frequently make short presentations. I have seen this approach used in dozens or nonprofit board meetings without success. Two problems frequently occur. First the staff person is so enthusiastic about an opportunity board that the presentation continues well beyond the allotted time, and, second, board members raise “micromanagement” level questions, that further extend the presentation session. To solve these problems, the board chair needs to suggest to those seeking more than appropriate detail that the questions can be answered “offline.” In addition, the chief executive should meet with the staff person well ahead of the meeting to make sure that the material to be presented is succinct, and the staff person is well aware of the time constraint. A “dress rehearsal” might even be appropriate for some staff personnel

• Another technique is to use a consent agenda. With a consent agenda, routine and previously agreed upon items are organized together in the pre-meeting agenda and then, hopefully, approved as a group. If one or more board members question an item in the group, it is placed on the agenda for the next board meeting. This process eliminates the time consuming effort of having a separate discussion for each item.

• A third controversial way is for the chief executive to meet with board members informally about every quarter. (It is controversial because many nonprofit CEOs feel this is too time consuming.) Occasionally, these meetings are with two directors at one time. At the sessions, the chief executive can discuss the more “entrepreneurial or wild ideas” that might need testing and update board members on operational decisions in greater detail. Some of the meetings can happen quite informally, before or after a committee meeting or after a monthly board meeting. Others can occur at appropriate social events. This is a controversial suggestion, as some CEO’s report they don’t have sufficient time for such a rigorous meeting schedule.  My observations of dozens of CEOs indicates that the very best manage to develop the schedule.
It is important to have the executive’s assistant keep track of the meetings and then to have authority to make new appointments to meet the quarterly schedule. Obviously, the CEO would need to meet with the board chair more often. If the board is a national one, meeting less frequently or a scheduled phone call are appropriate. One veteran CEO I know meets frequently with two board members. One is a long serving member, and the other is a newly appointed board member.

Keeping important information flowing to the board is critical to having a high performing nonprofit. It is a significant CEO responsibility

What Role Should nonprofit Board Members Play in Overviewing Management /Staff Talent?

 

What Role Should Nonprofit Board Members Play in Overviewing Management /Staff Talent?

By: Eugene Fram    Free Digital Image

Nonprofit boards rarely develop an in-depth strategy for assessing its organization’s human capital. Some will keep informal tabs on the CEO’s direct reports to prepare for the possibility of his/her sudden departure or is incapacitated. Others –smaller organizations with fewer than 20 employees—need only a basic plan for such an occurrence.

Need for Strategy: In my view, maintaining a viable talent strategy to assess staff and management personnel is a board responsibility, albeit one that is often ignored. The latter stems from the constant turnover of nonprofit board members whose median term of service is 4-6 years—hardly a lifetime commitment. Like for-profit board members whose focus is on quarterly earning results, their nonprofit counterparts are likely more interested in resolving current problems than in building sufficient bench strength for the organization’s long-term sustainability.

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Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

By: Eugene Fram    Free Digital Image

At coffee a friend serving on a nonprofit board reported plans to resign from the board shortly. His complaints centered on the board’s unwillingness to take critical actions necessary to help the organization grow.

In specific, the board failed to take any action to remove a board member who wasn’t attending meetings, but he refused to resign. His three-year term had another 18 months to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of directors decided such action would hurt the board member’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action.

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Raising The Bar For Nonprofit Involvement

Raising The Bar For Nonprofit Involvement

By Eugene Fram            Free Digital Image

It’s no secret that some nonprofit 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 board members 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  or “where they’re coming from.” With this information at hand on both sides of a discussion, it increases board members 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 board Members. ***

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 phone line when the office was not open. The management, a creative group, found a way to do it, without increasing costs.

Engage by cultivating 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 was 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 director, 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 harmful to 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/

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Is Your Nonprofit Board Chair Productive?

Is Your Nonprofit Board Chair Productive?

 

Is Your Nonprofit Board Chair Productive?

By: Eugene Fram         Free Digital image

Hundreds of articles have probably been published about the skills and abilities nonprofit CEOs need to have to meet the challenges of the nonprofit environment. These include: reduced funding, increased use of technology and increased responsibilities for fundraising.

Relatedly, nonprofit board chairs have been encountering escalating challenges to recruit able board personnel. Current chairs must develop a more active partnership with the CEO in fundraising and lead the board in making difficult financial, technology and other strategy decisions.

To address these challenges, following are the attributes that I think a nonprofit board chair should have to be productive, within the confines of being a volunteer (part-time) chairperson.

• Great Communication Skills: Current issues can be so pressing that chairs will need to be the types of people who don’t limit their board communications to regular meetings. Those who head the board must be in positions to return phone calls or other communications promptly and proactively seek the counsel of directors as needs arise. As a communicator, the chair should listen intently as well as provide outward-bound communications.
• Understands Importance of External Stakeholders: Traditionally chairs have not have much contact with external stakeholders. This is rapidly changing as funders want more assurance about board overview involvement in the grants they award; those providing gifts want more assurance that the intent of donor is being clearly recognized. The chair understands that an organization’s modern stakeholders range broadly from vendors to staff/management to donors. She/h understands that the nonprofit board represents the interests of a community, profession or trade association.
• Manages Board as an Organization: The chair makes certain that all directors understand their roles to overview, to have robust compliant financial and legal processes and to generate civil meeting discussions. He/s is able to abort any board attempts at micromanaging the executive group or staff. Board decisions should be viewed as being democratically developed, even when there is not unanimous agreement.
• Positive Relations With CEO: Mutual respect between the two is the hallmark of the relationship. Differences are settled without rancor, understanding that each role has boundaries – the board has the final word on policy and strategy while, at the same time, the CEO has final authority on operational decisions.
• Acquainted With Technology Basics: Since the use of technology is pervasive, the chair should be able to intelligently lead the board discussions on major technology issues. These currently include the use of the Internet, use of cloud computing and social media. Discussions can range from purchasing technical hardware and software to questions of privacy protection.
• Strategy/Policy Development: The chair has major responsibility to see that these topics are placed on the agendas, and, where approved, are implemented on a timely basis. Over the years, both issues on FP and NFP agendas have not been given the discussion time they deserve. These topics can range from pension reforms to whether or not an organization should have an acquisition/merger strategy.

The challenges facing nonprofits, their CEOs and board chairs have escalated and will likely continue to escalate. The managerial requirements for nonprofit CEOs have risen. But it has not been the same for the board chairs. Although a part-time position, nonprofit boards and their stakeholders should realize that they need to elect people with leadership know-how. They are not necessarily the people who make the largest financial donations. The two can be the same, but nomination committees must be certain that whoever is chosen to preside as board chair has the requisite skills to do so.

Can Small Experiments Test Nonprofit Strategic Validity?

Can Small Experiments Test Nonprofit Strategic Validity?

By: Eugene Fram        Free digital image

When given a series of potential mission changes, modifications or opportunities, most nonprofit boards take the following steps: (1) Discuss alternatives (2) Develop working plans, board/staff presentations and funding proposals (3) All three usually are packaged into a three or five year strategic plan for implementation. Typically the process can take about six months to “get all stakeholders on board.” When something new is suggested, the conservative board and nonprofit management immediately respond, “Great idea, let’s consider it in the new strategic plan.” Results: It can take three to five years to implement the idea, assuming the plan actually gets off the shelf, not an unusual occurrence for nonprofit organizations!


Another alternative being implemented by some nonprofit is to use a rapid experimentation approach called Lean. “First developed for use in the for-profit world, … the method focuses on new ideas for products through iterative experiments. Lean practitioners build simple prototypes ‘called minimum viable products (MVPs),’ …move quickly to get feedback on these items from constituents/stakeholders.” * As long as they have some positive iterations they continue to full product development.

Example: The software division of a large firm suggested a program that it felt certain would have great marketability because of it perceived uniqueness. The software developers were required to present it personally to a small group of potential customers. As a result of the interviews, both marketing and development executives dropped it.

How Can Nonprofit Boards Utilize Lean Experimentation?

These lean experiments can be conducted at minimum costs and with small samples that initially may not be statistically significant. (For example, in the software case cited above, there were only four customers in the sample, but they generated significant sales.)

Not being able to afford the time and money to develop excellent metrics, nonprofit boards, especially in assessing ambiguous and qualitative impacts, need to initially glean what they can from the use of imperfect metrics. (http://bit.ly/OvF4ri). The metrics can be anecdotal, subjective, interpretive or qualitative. For most nonprofits, it is a great leap forward from doing nothing or taking years to implement action. Also it offers an opportunity for client centered investigations.  The most critical requirement is that the directors and management agree that the process is reasonable and that outcomes from each experimental iteration constitute fair and trustworthy information.

A Current Example

There seems to be a growing body of knowledge of how to apply the art of lean in the nonprofit environment. * The use of lean to assess the proper venues to select social media by which to communicate with donors and other stakeholders is an example. All agree that the use of various social media venues is difficult to assess for both for-profits and nonprofits.

Here, as an example, is what might be done to obtain some directions on using social venues to reach millennials. Charitable nonprofits are seeking ways to communicate with this group as potential volunteers and future donors. Instead of a board waiting to take action on a broad social media strategy before taking some action on social media, it might start with some small-scale, low cost experiments. The information it obtains from one or two MPVs would be useful in backing into a comprehensive social media strategy when a new strategic plan is needed. But an early MPV also might also provide some information for immediate action.

Summary: Like any management process lean is not a panacea for either the business or nonprofit sectors. It has its advantages and disadvantages and will not replace more rigorous process, when required–longitudinal studies and strategic planning. However, its experimental design feature can help drive the nonprofit decision process to be more effective and efficient. That alone can help to recruit more able directors, who because of time-compressed lifestyles, now are impatient with the traditional pace of nonprofit decision-making.

* For a robust report of the use of lean in the nonprofit sector see: Peter Murray & Steve Ma (2015) “The Promise of Lean Experimentation,” Stanford Social Innovation Review, summer, 14pp. (http://ssir.org/articles/entry/the_promise_of_lean_experimentation)

 

Establishing Effective Nonprofit Board Committees–What to Do

Establishing Effective Nonprofit Board Committees–What to Do

By: Eugene Fram          Free Digital Image

Based on my board and consulting experiences, following are ways that effective nonprofit boards have established  board committees.

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Six Approaches to Innovation for Nonprofit Boards

 

 Six Approaches to Innovation for Nonprofit Boards

By Eugene Fram                     Free Digital Image

The Bridgespan Group, supported by The Rockefeller Foundation, completed an exciting research study. The results identified “six elements common to nonprofits (in bold/italicized) with a high capacity to innovate” * Following are my suggestions on how to implement these elements.

  1.  Catalytic Leadership that empowers staff to solve problems that matter. 
    This involves the board to lead with committed and generative leadership. ** Board members must be ready to ask tough questions. They must require management to respond to the classic question, “Who would miss the nonprofit if it were to disappear?” Board members should be able to suggest new ideas drawn from business and the public sector that can be adapted, assessed and tested by management and staff

  2. A curious culture, where staff looks beyond their day-to day obligation, question assumptions, and constructively challenge each other’s thinking as well as the status quo.
    This, in my view is difficult to achieve, but boards should attempt to take every advantage to develop it. Boards that question the status quo are hard to find in all fields. They should, at the least, involve the staff in strategic planning efforts and pay close attention to its development. Staffs then are in an excellent position to challenge the status quo. One staff person in a human services agency, for example, challenged the status quo by observing the nonprofit did not have a “safety net” mission, but in reality had a “sustainability” mission. The agency was not only helping clients on a day-to-day basis but also was trying to assist them to achieve sustainable lifestyles.
  1. Diverse teams with different backgrounds, experiences, attitudes and capabilities—the feed-stock for growing an organization’s capacity to generate breakthrough ideas.
    As the Bridgespan Group has noted, it is necessary to have board members, “who are diverse across their dimensions: demographics, cognitive and intellectual abilities and styles with professional skills and experiences. In my opinion, nonprofits have been successful in recruiting board members in all of these categories except two—cognitive and intellectual abilities. I have encountered nonprofit boards without a single director with strategic planning or visionary abilities. Board members’ full time occupations often do not require them to have these abilities. As a result, strategic planning was just a SWAT (strengths, weakness and threats) review without any real analytical depth. To rectify the situation, nonprofits need to add these abilities to their recruitment grids. Unfortunately, this makes the recruiting effort more difficult since the abilities don’t appear on many resumes. Candidates must be assessed from an in-depth interview process.
  1. Porous boundaries widen the scope for innovations, by allowing fresh ideas to percolate up from staff at any level—as well as constituents and other outside voices—and seep through silos.
    Because many nonprofits have small travel budgets, they may operate in “bubbles, ” consisting of themselves and similar neighboring organizations. In addition, they can acculturate board members to the “bubble” traditions and environments.   For example, they may ask a new board member, with strong financial abilities to help the CFO with accounting issues, instead of asking her/h to develop a strategic financial plan for the organization. Perhaps as national webinars become more available to nonprofit managements and their staffs, these information flows will help to change the innovation roadblocks. Then they can, “generate new ideas systematically, test ideas using articulated criteria, metrics methodologies and prioritize and scale the highest potential ideas.”
  1. Idea Pathways that provide structure and processes for identifying, testing and transforming promising concepts into needle-moving solutions.
    For example, the process of Lean Management can allow testing of new ideas quickly. Instead of waiting for a new strategic plan to establish a pathway for   something new, a nonprofit can test it with a series of small-scale efforts to determine its viability. The idea can be dropped if positive results are not developed after a couple of tests.   If after successive tests with viable information results, the idea can be moved quickly to an implementation stage when the nonprofit has the necessary resources.

  2. The ready resources—funding, time, training and tools—vital to supporting innovation work.
    To fully take advantage of most of these six innovation guidelines, fundraising is critical. But each board and staff cannot do it alone. It must be a partnership between the board members and the CEO that recognizes fundraising for innovation is a necessary part of the nonprofit’s resourcing efforts.

*https://ssir.org/articles/entry/is_your_nonprofit_built_for_sustained_innovation

**https://www.bcg.com/publications/2022/all-about-generative-leadership-and-its-benefits

Does Your Nonprofit Have A Process For Implementing Strategy?

 

Does Your Nonprofit Have A Process For Implementing Strategy?

By: Eugene Fram           Free Digital Image  

My observation is that intense interest in nonprofit organizational strategy only takes place  very three or five years when the strategic plan needs to be reviewed.  The cause, as I see it, is that substantial numbers of nonprofit board members and senior managers lack substantial strategic  backgrounds and interests to enable them to give the plan implementation attention. Most boards I have encountered are fortunate to have one or two  board members with broad based strategic experiences. With nonprofit board members rotating every four to six years, it’s likely that any board member will only participate in one strategic plan change experience.  Also some nonprofit CEOs and senior managers can be directly appointed from staff positions, lacking knowledge of strategy development.    

Based on a survey of commercial organizations by McKinsey, it appears that these boards and their managements have similar strategic challenges as nonprofits. * 

Following (in bold) are McKinsey’s three suggestions for implementing strategy development and my suggestions for adapting them to nonprofit organizations (more…)

Time Compressed Non Profit Board members – Recruit & Retain Them!

Time Compressed Non Profit Board members – Recruit & Retain Them!

By: Eugene Fram               Free Digital Image

Every nonprofit board has had the experience of having board positions open and being unable to fill them with highly qualified people. The usual response from qualified candidates is that they are too busy to be accept a board position. However, the real reasons, if speaking privately, are that they perceive the nonprofit decision process to be too slow, board agendas loaded with minutiae, presentations that take up more time than they should, unfocused discussion, etc.

Following is a list of “selling points” to potential board candidates, providing a board can deliver on them!

• We are careful to make wise use of your valuable time.
• Board meetings will begin and end of time, a quorum will be present at the beginning of the meeting.
• Board meeting material will be sent a week ahead of time.
• The agenda also will be sent out a week ahead of time.
• If you miss a meeting, the minutes or videos will be available within a week afterwards.
• If are going to be traveling, we have the facility for directors to attend virtually.

• Divisional staff reports will each have a time limit and be well prepared in advance, so the agenda can be completed as scheduled. The CEO works with each presenter ahead of time to assure well developed presentations.
• The board chair has the responsibility to quickly refocus discussions if they get off track into the weeds.
•  Visual presentations will be limited to 10 important visuals.
• Policy and strategic topics will be the major foci of the meetings, not operating minutiae. We view our responsibility to overview, not micromanage.
• Board committee work will be aligned with the candidate’s interests and backgrounds. Committee chairs will understand board members’ time constraints.
• The board chair and/or CEO will meet with each board members individually once a year to make sure the board members perceives the board experiences are in line with the above guidelines and to seek suggestions for board improvement.