nonprofit governance

How Long Should A Nonprofit Director Serve?

How Long Should A Nonprofit Director Serve?

By: Eugene Fram

Nonprofit board terms are like clothing sizes.  They come in all shapes and sizes!

Some terms are as short as two years, with the charter specifying the person remain off the board for one year.  Other charters have systems that allow a director to remain for decades.  The most common format allows the director a two three-year terms, with some exceptions relating to whether the person is originally filing an interim year or chairs the board in his/or her final year. (more…)

Attn. Nonprofit Board Recruiters: Marketing & Sales Are Not The Same!

Attn. Nonprofit Board Recruiters: Marketing & Sales Are Not The Same!

By: Eugene Fram

What are the differences and what do these background differences mean when a nonprofit board concludes that a person with a “marketing background” needs to be added to a board. ! 

If the nonprofit board needs a person help define and/or segment a market, a director with a strong marketing resume is needed.  For example, if a teen social center finds that its clientele is shifting from one ethnic group to another, a marketing person can help with the research to determine the overall differences between the two groups.  Then a marketing plan can be established to show how the organization can help solve the problems being faced by the new ethnic group.

Assume the board has a good knowledge of its market but has a critical need for action in the fund development function, and then the need is for a director with a strong sales background.  This person can help with planning fund raising events, provide techniques for “making the ask,” educate senior management and directors on the fine points of presentations to senior business executives and, in general, help spark the fund development effort.  However, some of the suggestions might seem to be “outlandish” to a conservative nonprofit board.  For example, it took me two years to establish a highly successful annual fund raising dinner for a human service nonprofit.

Another background to consider is a person with a marketing communications (often called Marcom) person who can assist with the website, developing print promotions and advise on communications to stakeholders and staff. 

In nonprofit board recruiting, a person with “marketing” background can vary greatly.  Be sure to define specifications. 

 

   

A 2012 Agenda for Nonprofit Audit Committees

A 2012 Agenda for Nonprofit Audit Committees

By: Eugene Fram

Nonprofit audit committee members might want to view a video presentation at the Corporate Board Member Website (June 9th) for a list of top issues being faced by for-profit audit committees.  Catherine Bromillow, PwC Center for Board Governance, presents the list. 

Following, in her order of importance (high to low), are those that I feel can apply to nonprofit organizations.

RISK MANAGEMENT – Focusing on the known risks and estimating the unknown ones.  For example, how will the greater use of psychiatric drugs impact nonprofit counseling organizations?

INCREASED USE BY REGULATORS – What use will the IRS make of the governance information now being collected annually via the expanded 990 Forms?  Do volunteer directors know the potential impact of the Intermediate Sanctions Act?

CHANGES IN REGULATIONS & ACCOUNTING STANDARDS – What impact, if any, will Dodd-Frank have on nonprofits?   (Although not directed to nonprofits, Sarbanes-Oxley has had some indirect impacts.)  What changes in accounting standards need to be reviewed by a nonprofit audit committee?

TURBULENT ECONOMIC CONDITIONS – What plans are in place to survive more turbulence in the world economy? 

INTERNAL CONTROL STRUCTURE – How does the internal control structure need to be changed after a merger or acquisition transaction between two nonprofits?

TAX COMPLEXITY- How do changes in state or federal tax regulations impact a nonprofit organization’s business plan?

OPERATION COMPLEXITY – For those nonprofits that operate from multiple sites, the audit committee needs to understand key issues for each site.  Visits to all sites by the committee or individual directors are important.

COMMITTEE EFFECTIVENESS – With frequent rotating membership, how do nonprofit audit committees go about improving their operations?

My Blog Site:  http://bit.ly/yfRZpz

 

  

 

 

 

 

 

Why Are Dysfunctional Nonprofit Boards Interesting?

Why Are Dysfunctional Nonprofit Boards Interesting?

By: Eugene H. Fram

My blog (http://bit.ly/yfRZpz) has been drawing an unusual number of views related to dysfunctional nonprofit boards.  Is it because:

  • Nonprofit evaluations has become a prime media interest?
  • Dodd-Frank passage has alerted a greater number of nonprofits to really review their charters?  
  • More boards have found board problems arising as a result of reviewing the expanded 990-form section on governance?
  • More audit committees are being given expanded responsibilities?  

Can a nonprofit organization focus on its mission vision and values if it has a dysfunctional nonprofit board?  I have seen this accomplished in situations where the CEO is managerially oriented and can live with the board’s problems or foibles.  For example, one nonprofit I encountered had an eleven person board, four of which never attended meetings and several others were sometimes absent for personal reasons.  Meeting minutes clearly showed a focus on operational detail. However a strong CEO was able to focus well, and the organization prospered. On the other hand,the CEO openly complained that she was overworked, needed board assistance and could become a “dictator” for the nonprofit!!

In another situation I encountered, the board chair and ED were very strong, but the board governmentally weak. Work and family pressures constrained the time directors could devote to their governance responsibilities. While the organization performed reasonably well, performance problems and board liability issues might arise, if either the chair or ED retired or resigned.
 

If you have any other insights as to why I am getting so many views related to dysfunctional nonprofits, I and other viewers would be delighted to have your comments.

 

 

 

 

In another situation I encountered, the board chair and ED were very strong, but the board governmentally weak. Work and family pressures constrained the time directors could devote to their governance responsibilities. While the organization performed reasonably well, performance problems and liability issues might suddenly occur, if either the chair or ED retired or resigned.

Do Nonprofit Board and For-Profit Boards Face Similar Major Challenges?

Do Nonprofit Board and For-Profit Boards Face Similar Major Challenges?

By: Eugene Fram

The answer is Yes!  Following is a current list of four major commercial board challenges, published by Deloitte Consulting.   The italicized comments show the nonprofit similarities. (more…)

A Nonprofit Director Board or A Nonprofit Trustee Board?

A Nonprofit Director Board or A Nonprofit Trustee Board?

By: Eugene Fram

Nonprofit organizations refer to their board members as “ Directors” or as “Trustees.” I recently encountered one nonprofit board that referred to it board members as directors, but the charter, when referenced, clearly stated it was a trustee board. Do these board titles make a difference? (more…)

Can Lead Directors Help Improve Not-For-Profit Board Performance?

International Journal of Not-for-Profit Law / vol. 14, nos. 1-2, April 2012 / p.57

Some blog followers may be interested in this article.  .

 

Eugene Fram