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Developing Your Board of Directors: Building and Sustaining an Effective Board*. March 6 th , 2012 Judith Kidd, Interim Executive Director And Chair, Board of Trustees Brookline Community Foundation * Adapted from ESC, Inc. and BoardSource. Why do we have boards of directors?.
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Developing Your Board of Directors:Building and Sustaining an Effective Board* March 6th, 2012Judith Kidd, Interim Executive DirectorAnd Chair, Board of TrusteesBrookline Community Foundation* Adapted from ESC, Inc. and BoardSource
Why do we have boards of directors? • Minimum Legal Requirement • Extra Hands • Community Input and Outreach • Public Trust/Tax Exemption • Access to Financial and Human Resources • GGG or WWW
Legal and Ethical Governing Principles • Duty of Care • Duty of Loyalty • Right to Know; Responsibility to Ask Are your board members aware of these responsibilities? Do you have a board handbook?
Legal and Ethical Governing Principles, cont. The board has legal and ethical obligations in governing a NPO for which it is accountable to beneficiaries and stakeholders. The board must ensure that the organization operates within local, state and federal guidelines, and must safeguard the mission and resources.
Legal and Ethical Governing Principles, cont. The board determines the MISSION of the organization. This sets the overall direction for the organization and is the basis of all strategic planning exercises. A strong commitment to the mission is essential for all board responsibilities. Do your board members know your mission statement?
Legal and Ethical Governing Principles, cont. The board is responsible for OVERSIGHT of the organization. Oversight includes legal, ethical and fiduciary responsibilities, as well as supervision of the chief executive. Does your board have a system for evaluation of the executive director and self-evaluation of its performance as a board?
Legal and Ethical Governing Principles, cont. The board is responsible for obtaining the RESOURCES required by the organization. Board members must be diligent in reviewing the organization’s financial resources, as well as in securing funds and cultivating volunteers and board members with the needed skills. Do you have a fundraising plan that engages board members? Do you have a year-round board recruitment effort?
Legal and Ethical Governing Principles, etc. The board is responsible for OUTREACH to the community served by the organization. Board members must be an articulate voice for the organization’s mission and value, and also able to listen to the needs and interests of these potential stakeholders. Does your organization have an “elevator speech”? Do your Board members have talking points?
Thinking About Board Service How about you? What experiences have you had as a member of a board? Why do you think people volunteer to serve on a board?
Thinking About Board Service, cont. The “ideal” board is productive, knowledgeable and self-renewing Productive Board Attributes • Decisions get made • Important issues and tasks get addressed • Work is appropriately delegated to committees/individuals • Strong working relationships exist between board and staff • Clear sense of purpose
Thinking About Board Service, cont. Knowledgeable Board Attributes • Appropriate roles and responsibilities of board and staff • Aware of mission, programs and services of the organization • Instructed about the elements and requirements of nonprofit governance
Thinking About Board Service, cont. Self-Renewing Board Attributes • Evaluates self regularly • Strategically identifies and recruits new members • System for retiring nonproductive members • Orients and educates members • Uses human resources wisely • Continuously develops future leaders
Life Cycle of Nonprofit Boards • Organizing Board/Founding Board • Usually small (ten or less) • Recruited by founder • Board members tend to be somewhat alike • Board actively engaged in all aspects of operations • If there is a charismatic leader, board defers to founder • Problems trusting staff, delegating authority
Life Cycle of Nonprofit Boards, cont. • Governing Board • Medium Sized (10-25) • Recruited by a committee • Wide range of skills and interests and representation of stakeholders • Healthy division of responsibilities between board and staff • Everyone understands and accepts roles • Board raises funds, sets policy • Good relationship between board and staff
Life Cycles of Nonprofit Boards, cont. • Institutional Board • Primarily boards of large cultural, educational or health institutions • Large board • Membership prestigious • Members have high profiles in the community • Members have capacity to give or access funds • Active executive committee that serves as the governing board • Large Staff • Board action usually consists of ratifying action taken by the Executive Committee
Life Cycles of Nonprofit Boards, cont. Understanding what stage your board is in can often help in determining the cause of current issues. Some boards spend a long time in transition between organizing and governing. Some boards remain in between phases for the entire life of the agency. • Transition to organizing board may be caused by financial problems, board-staff struggles, new board members with differing expectations and motivations, less personal identification with mission or founder. • Need for transition to a governing board may be identified by greater dependence upon the board for fundraising, more independent committees, increasing board size to accommodate more committees, greater use of board to build influence in the community etc.
Boards and Executive Directors If a board is ineffective, whose fault is it? Chair or Executive Director?
Boards and Executive Directors, cont. Board: • Responsible for fulfilling mission of organization, not for increasing profits • Active role in fundraising and some outreach • Responsible for hiring ED & Setting Salary & Job Description Executive Director: • Helps develop policy for board member approval • Generally not a voting board member • Manages Implementation of policy Staff: • Implements policies by delivering a serviceor making a product • Cannot receive ownership options Board of Directors Executive Director/President Staff
What makes boards fail? • Holding unnecessary meetings; leaving members to wonder why they are there • Having “seagull” members: drop in occasionally, poop on everything and then leave • Having an us/them attitude toward non-Board members on committees • Letting staff control the agenda and keeping Board members at arm’s length • Some members dominate all of the discussions (and others never speak up) • Never take time to step back, plan, re-examine their work and that of the organization • Stay comfortably disconnected from economic reality; plan spending as if there are no limits • They are not united by passion, but rather by a desire to join this social group-tolerating much cliquishness within the board itself • They fail to tap leadership, skills of members • Fail to have an agenda, waste time and don’t move forward • Do not work in between Board meetings, so nothing moves forward • The membership doesn’t turn over and instead, ossifies
What makes boards fail? cont. • Members have too much self-interest in the decisions of the Board • Members are only there because they said they’d be- they’re checking the box and don’t really care • They are tense around fundraising; stay away from it • They are obsessed with fundraising and don’t spend enough time on strategy • They blame staff for what’s going wrong • They have laissez-faire leaders and members • They have mission drift • The Board is hypocritical; thinks they’re setting strategy but are micromanaging • They don’t take responsibility for fundraising • They toss responsibility: “You guys really ought to…” • They stack the Board with those that agree with them
Why is governance important? • Public Trust • Stakeholder Trust • Client Trust