The following blog about "types" of nonprofit boards gave me great pause. The author attempts to provide an explanation for why nonprofit boards may struggle with their Executives and of course produce no or bad outcomes.
Yes, boards on occasion struggle with achieving a balance of power with their executives. While we like to describe the ideal relationship between the nonprofit board and the executive as a partnership, most know that that isn't always how it plays out. Boards/board members put in an average of 30-40 hours of work a year while executives put-in a minimum of 40 hours a year. Board members have one job, executives have a different job. Both are a nonprofit's leader: the executive paid and the board volunteer. The board of course is the nonprofit's "owner" albeit surrogate on behalf of the taxpayer. So it stands to reason that this group of volunteers may not always see eye-to-eye and maybe that's OK - a healthy tension created by the construct. But the power is clear - it is legally in the hands of the board and it's on the board to "work-out" how to balance powers.
But this blog author takes the discussion of power dynamics to another place. The author offers that there are differing types of boards and that the differences, not communicated, are what results in a tension and sometimes, disruption between the board and executive. I would agree that poor communications always produces bad results. But I have to object to the author's classifications of boards. I pose that there is only one "authentic" board and that board has that fiduciary duty of care to minimize risk and ensure success. That a board may choose to exercise its duty using different approaches does not make it a different type of board. Yes, some boards may choose to play a more advisory role to their exec but this does not diminish their fiduciary duty. And some boards may be more active as fundraisers. And other boards may exercise their responsibility by developing, overseeing and evaluating policy to inform an exec of how all should go in the pursuit of mission. This approach is most often referred to as a corporate governance model.
In my experience, all nonprofit boards use all of these approaches, to a lesser and greater extent to fulfill their fiduciary duty. All achieve varying results. And, all have varying degrees of positive and negative relationships with their execs. They are all nonprofit boards - not different types of boards. I believe this an important distinction from the author most importantly because I don't want to say it's OK not to do the one thing boards are obligated to do: fulfill their fiduciary duty. Again, there are not a wide variety of boards: just boards that go through stages executing their job in varying ways.
by: Lauren DeIorio, Nonprofit Business Council Chair and Fund Development Director, Public Education Foundation of Marion County
Why do organizations need boards of directors? A board takes on many roles for the organization, but the main reason to have a board is that it strengthens and helps to define the organization. Whether they are taking on some of the duties of the organization, such as overseeing finances, or just influencing potential donors to join your mission, without a board much of what is accomplished by the organization would never become a reality.
For a nonprofit organization, a board of directors can play a huge role in that organization’s success. However, there are many types of boards that have very different ways to oversee an organization. For the vast majority of nonprofit boards, they fall most commonly into two types of boards: a traditional board or an advisory board. A traditional board will oversee an organization’s operations by establishing committees such as a finance or programs committees. The traditional board delegates the responsibility of management and operations to the Executive Director or CEO. The Executive Director or CEO will report back to the board on a regular basis so that the board can monitor the progress of the strategic plan. With an advisory board, the organization’s Executive Director or CEO calls all the shots. The board, which is usually selected because of their standing in the community, has no authority within the organization. Their only job is to “rubber-stamp” what is brought to them from the Executive Director or CEO.
Still there is a few times where different types of boards are organized based on the needs of the organization. For example, there are some nonprofits whose main focus is on fundraising for their cause, so they will form a board that utilizes its members’ connections or community influences to help solicit funding. These boards are called Fundraising Boards. While the board of directors may determine that the fundraising aspects are actually handled by a committee out of their board, they may actually appoint a fundraising board a part from their own. Some of the other types of boards and/or committees are: policy boards, collective boards, working boards, as well as executive boards. Some nonprofits create a mix of the various types of boards and/or committees in order to function.
Which one works best depends on how well the nonprofit organization’s Executive Director or CEO can work with the board. This is why with whatever type of board that is created, it is important to clearly communicate the roles and responsibilities of both parties. Otherwise you are guaranteed to have a power struggle play out between your board and the Executive Director, which in the long run could cripple the nonprofit organization’s mission.