A contributor to the Tallahassee Democrat regularly offers her observations on nonprofit board governance and in her most recent article engaged a colleague (Robert C. "Bob" Harris) in sharing his experience. I've highlighted his "points" for your own consideration. The topic: why boards fail and what to do about it.
Here's the list with my own thoughts added.
- Boards can fail when the don't understand their role. That's why board orientation for new members, on-going education, and mentotring about the role of board members is critically important. Don't assume board members know what they need to now, even if they've served on multiple boards. Working in partnership with the board chair, it's the ED's job to educate them.
- Yes, for sure, board members need to understand what is expected of them and how to meet these expectations. And yes, being a board member is not knowledge with which one is born. I might however quibble over how much of the task of education is the ED's and Board Chair's. I would offer instead that a Governance Committee, supported by staff, is in the best position to recognize needs, plan, and act.
- Boards can fail when they don't plan. Donors, board members, and funders want to invest in organizations with a clear vision and bold plan.
- Even though I have spent a significant portion of my consulting career as a strategic planner, I must say that I am not 100% certain about what has been the difference made with the resulting plan. I do very much believe that the process matters as a unifier and cohesive-builder but getting members to keep the plan in front of them does not always stay constant especially with the other competing priorities. Getting a plan completed matters but equally important is having the board hold-up the plan as their guidepost.
- Boards who are not willing to raise money or personally give money are less likely to succeed.
- I must say that there are many, many nonprofits not dependent on the giving/getting activity of their board. And, I recognize there to be a good and maybe bad to this reality. Bottom line, I don't believe this dictum to be an absolute for every board. I believe it to be true for many and further believe it necessary for members to agree that this is their strategy - not a requirement because they are told it is.
- If there's no recruitment or training of diverse, capable board members, the organization stagnates which can lead to failure. That's why term limits are critical and governance is the most important boar committee. Otherwise expect failure or very low performance.
- I fully concur.
- Creating a financial and programmatic dashboard to track key indicators is one way to identify warning signs when they develop.
- I agree and would further offer that his is all made possible as a result of good strategic planning. Also, recognizing warning signs is pretty much what is the fiduciary responsibility of a board.
- It’s also important to ask hard questions. Boards who avoid them may find themselves dealing with bigger issues that can lead to resignations, declining donations, and in some cases, closing the doors. To prevent this, create a culture within the board where hard questions are welcomed and addressed in a timely manner.
- Certainly and this is where the Chair becomes and important player - to facilitate, encourage and ensure that the governance committee has done its job in skill and process building.
- Finally, boards fail when they don’t diversify funding sources. I was contacted by a nonprofit who receives 98% of it’s funding from one source which was about to be dramatically reduced. Until then, they had rarely hosted community events or engaged in relationship building beyond its existing funder and constituents. As a result, they were scrambling to create a fundraising program with no donors, no community visibility, or public awareness of their mission or impact. That’s a steep climb that could have been avoided by steadily building a giving program.
- Yes, diversifying funding matters for longevity. Again, back to planning remembering though it is here, I believe, that the board sets the direction and hires a great exec who in-turn executes and is accountable for doing the actual diversification.