Unwritten Protocols for Directors Can Boost Nonprofits’ Effectiveness
By: Eugene Fram Free Digital Photo
Nonprofit boards are governed by a series of obligations —some are clearly defined as legal responsibilities such as financial actions. Others, however, are less clearly defined and relate to people who are, in some way, associated with the organization. Guidelines to these diverse interactions are not typically archived in policies but are important to the overall professionalism of the board. They include consideration of its: board structure, internal operations, recruitment methods and leadership style. (more…)
As the nation is reeling from the jolt of the 2016 election results, I happened to read a recent report from Deliotte Consulting suggesting ways that for-profit organizations can improve their performance in uncertain times. The report centers on key drivers of board effectiveness that, in my opinion, resonate with similar nonprofit situations. Most nonprofit boards typically live with uncertainty and are perennially “on the edge.” Here are some ideas from the Deloitte * report that, when adapted early, can bolster their operation in times of disruption.
Bold, decisive leadership: Nonprofit boards are responsible for donor and charitable types of revenues that place directors in a public trust position. In addition board members typically will only be active for a median tenure period of four to six years. As a result they often become overly conservative in their strategic views and may accept CEOs that “mind-the-store” with modest incremental growth annually.
To prevent the organizational boat from capsizing in the perpetual seas of uncertain times, the board needs rely on the best forward looking information about strategy, culture, people and clients. All of this must be in solid alignment with a substantial mission, or a modified one if the external environment requires it. This allows the nonprofit to cut through the cultural barriers that impede strategy development. As Peter Drucker has noted, “Culture eats strategy for breakfast every morning.”
Opportunity mind-set: Even when the organization is prospering, the board has a responsibility to press for innovations and to support small-scale experiments as called for in a “Lean Management” structure. Within this structure, the staff can test the waters via experiments to move more boldly, as long as the experiments yield positive results. **
Stakeholders: Nonprofits have a multitude of stakeholders, complicated by the fact that often those who receive the service are not the ones who support or pay for it. This requires management to balance the needs of the various groups and that can call for heart-breaking decisions. For example, should revenues be allocated to marketing or used for needed client programs? To solve the dilemmas Deliotte suggests, “Building valuable, open relationships across multiple stakeholder groups is key to building trust and organizational resilience”
Match fit: Boards have a responsibility to motivate the nonprofit to realistically evaluate the tensions between new models and existing ones. Two examples show contrasting results. Easter Seals boards perceived the market changes involved with polio vaccines and modified their missions. Nonprofit counseling agencies failed to assess the positive impacts of new pharmaceuticals and the need for face-to face counseling declined. To develop a fit, Deliotte suggests, “the board and the organization need to be agile and open.”
Culture, culture, and culture: Nonprofit boards’ cultures play a key role in determining the level of risk the board is willing to take. With key drivers, nonprofit boards have to take reasonable risks to survive and even encourage management to take it. Small scale, yet bold, experimentations that are jointly reviewed by board and management provide a “Lean Management” approach that has been used by venture supported business firms.
Cracking the diversity Code: Instead of recruiting new board members and maximizing the best they have to offer, nonprofit boards try to orient new board members to the current culture. A new member with a financial planning background, for example, will be asked to work with the CFO on accounting related problems. Instead, he/s should be asked to develop a long term-term financial plan. Board background (such as strategic planning abilities, critical thinking) diversity, as well as demographic (such as gender, ethnicity) ones, must be carefully crafted and utilized as well as demographics.
Curiosity is Key: Deliotte Consulting concludes, “Directors should get out of the ‘same old’ board room, and should even look across borders to learn from approaches in (different nonprofits) and companies… . Developing news skills and insights are essential for innovation and should be sought to create the questioning and challenging environment needed to imagine, inspire and deliver better outcomes (and impacts). Complacency (in uncertain times) can be a killer.”
Enlarging the Nonprofit Recruitment Matrix: The art of selecting new board members—Part II
By: Eugene Fram
There’s never enough to say about the selection of nonprofit board members. Following my last post on board behaviors and cultures I ran across a guide fo desirable skills/abilities for “for-profit” directors. From this list, I suggest the following additions to the recruitment matrices of 21st century nonprofit board candidates to improve board productivity. * Those included will have: (more…)
Nonprofit & Business Boards Have Similar Challenges – Some Reflections on Them
My blogs often highlight how nonprofit and business boards have similar challenges. Following I will highlight some business board challenges reported by William George, a Harvard professor, former board chair-CEO of Medtronic. Then I will show how his experiences can be related to those of nonprofit board directors.* As usual, I will quote or briefly paraphrase William George’s insights through italics.
Most nonprofit directors are independent ones. They typically have limited engagement with the (nonprofit) and its board, meeting six to eight times a year. Consequently, management’s knowledge of the organization’s information and data is superior(more…)