Board Chairs and Board Leaders Mary Hiland, nonprofit leadership expert, interviews Mike Burns to discuss national research on board chairs and board leadership.
Inspired Nonprofit Leadership Mary Hiland, nonprofit leadership expert, interviews Mike Burns to explore nonprofit board stages of development. Mike offers that recognition of board stages helps establish achievable expectations.
"Effectively Raising Capital: The Board Chair & Executive Director Relationship" Mike Burns and Kevin McQueen, partners at BWB Solutions, and special guest Carla Weil, the Chief Strategy Officer from Capital for Change, the largest full-service CDFI in Connecticut, share their experiences effectively identifying funding sources and raising capital to strengthen an organization and provide more impact in low-income communities. Carla Mannings of Partners for the Common Good and CapNexus moderated the panel.
Share power to strengthen your board. Are your board leaders struggling to balance power among themselves? Are they not understanding their roles outside of the boardroom? If you answered yes to any of these, listen to Ep. 58 of our podcast as we host Mike Burns and Judy Freiwirth. Mike and Judy share their expertise, which is based on their Nonprofit Alliance study Voices of Board Chairs.
Making a Lasting Difference I've been struggling to finish "Making a Lasting Difference" by Graeme Reekie since first I received this book about 6 months ago from Wren and Greyhound. The press is British but I thought the subject would be universal for nonprofits.
Alas and sadly, this is a slow, tedious read filled with platitudes and almost helpful considerations nonprofit managers might want to consider when thinking about how to financially sustain their organizations.
I have generally posited that a nonprofit has 4 "pillars" that comprise its DNA: program, management and operations, governance and sustainability. M. Graeme offers five: involvement ((having community support); Income generation; Innovation ("how to nourish and encourage incremental innovation); Improvement (systems and structures); and impact measurement. So he and I don't operate from the same lens but his is certainly one perspective.
Making a Lasting Difference is constructed in four parts, 20 chapters and 211 pages. The possibly most innovative content is in Part 2, Chapter 2 where paradoxes, principles and practices of sustainability are presented. The paradoxes:
a. Change - only by changing can organizations be sustainability, sustainability does not mean sustained, and, the lesson is that an org. must learn, adapt and evolve purposefully. Here the author poses that an org has to have its act together to achieve sustainability
b. Octopus - organizations need to reach out in new directions to grow but growing in too many directions pulls them out of shape; diversified income does not mean reduced risk; and, an org must focus on core organisational purpose and structure. Here the author says that mission drift will not make you sustainable.
c. Yes/No the things that an organisation needs to survive can also kill it. Saying yes to everything is fatal; sustainability is about more than just money. Capacity and quality matter. Understand when, how and what to say no to. I would offer this is the "stay in your lane" paradox.
d. Efficiency - Efficiency preserves resources but can impair development. Organisations cannot evolve, adapt or respond without spare capacity. And orgs should balance strategy and scrutiny. They should invest in capacity building.
To all of this I just want to say: uh, ok and thanks for the amazing insight. No, not really! I would not invest in this book. You can better spend your time reading the Federal Register looking for grant opportunities (good luck given the current environment) or going through the Foundation Center directory or building an endowment from rich people who loved you (yes, this really is the key to sustainability). Making a lasting difference may be a good idea when thinking about long-term impact from what your nonprofit does - reading this book will not.
A board member of a nonprofit recently resigned after having posted "hate speech" on Facebook. The organization via its exec (would have been better were it the Chair) stated that nothing they do endorses such actions. This action contradicts their values. Kudos to the board but also kudos to the now resigned board member who took an action that was minimally in the best interest of the nonprofit. Such responsibility taking is not an everyday event in today's times. Here's the NewsTimes story:
WILMINGTON, N.C. (AP) — A University of North Carolina-Wilmington professor who posted a Facebook status that said “Blow up Republicans” has resigned from the board of a nonprofit he founded.
Dr. Dan Johnson left Accessible Coastal Carolina Events, Sports and Services (ACCESS) of Wilmington on Monday, Wilmington StarNews reported.
Executive director John Smist said that the nonprofit “is unaffiliated with any politics."
“Our bylaws expressly provide that ACCESS of Wilmington shall take no position on matters of governmental policy other than those relevant to its purposes,” Smist said.
Johnson is an associate professor of recreation therapy, according to the School of Health and Applied Human Science’s website. His biography said he was a liaison between the university and the nonprofit, which aims to improve access to sporting activities and facilities for people with disabilities. Johnson didn’t return messages from the newspaper seeking comment on Monday.
The university said the since-deleted post from May was “free speech protected by the First Amendment” after it was written about on a conservative website last week.
School officials determined that “no matter how upsetting and distasteful such comments may be,” the post didn’t direct a true threat at anyone in the community. The university’s statement said that Johnson “expressed deep remorse.”
Woody White, who serves on the university’s board of trustees, has asked Chancellor Jose V. Sartarelli to further investigate the status. He’s the only board member who has called for an investigation so far.
“The words he chose to post called for violence. Violence against people with whom he disagrees,” White said in an email. “That is unacceptable commentary, even if it was impulsive and even if he is sorry for it now.”
The fiduciary duty of loyalty is most simply described as having no personal gain or otherwise, conflicts of interest, in conducting the business of the organization. But conflicts of interest can be squishy. If an board member's business gets a contract approved by the board and the board member does not benefit directly from the contract (the check isn't made out to them personally) is that a conflict of interest? One answer might be that as long as the board member made it clear that there would not be a personal benefit, all's good. Others might add that declaring their tangential interest by being an owner or operator AND not voting on the matter would be enough to not have a conflict.
I would pose that not voting on the matter is appropriate but one can't underestimate the indirect benefit the member gets as a board member that ultimately influences the board to vote "yea" on the contract. With this in mind, take a look at this South Bend Indianna case with board member conflict of interest at the center of the debate. What do you think could or should have happened?
School board to get conflict training as member's firm lands contracts, raises questions
Leslie Wesley is vice president of the school board and also executive director of the Indiana Parenting Institute of St. Joseph County, which for years has provided after-school and summer programs for South Bend students.
Those programs include tutoring services, STEM activities and college visits, according to the Riley High School website.
Wesley insists she has taken all the necessary steps to make sure there are no conflicts of interest and that she does not benefit directly from the contracts. Experts say the contracts don't violate state laws.
In the wake of the questions, the board will soonundergo training on conflicts of interest. Records show no current school board member has filed a conflict of interest disclosure with the state since 2018. Those statements spell out a board member's connection to a contract and any financial gain they expect to receive.
In addition to its previous work, the Parenting Institute was among a group of organizations the school district recently voted to contract with to provide summer programs. The $32,000 contract is for math and reading remediation this summer.
During the meeting where those contracts were approved, board member Jeanette McCullough asked the board to conduct a review to ensure it was not violating any policies. She said she was told "one of the school board members is one of the partners" in the agreement.
South Bend Superintendent Todd Cummings declined a request for an interview, referring questions to the school board president, John Anella. Cummings said through a spokesperson, "This is board business."
Anella referred questions about Wesley's role back to her. But he said the board will receive conflict of-interest trainingwith an attorney next month, and that the situation with the Parenting Institute could be used as an example.
Experts say there are no legal issues with the relationship between Wesley's firm and South Bend schools. And even if she did personally profit in some way, they say, Wesley could do so legally by disclosing her earnings with the state.
"A prosecutor or even the State Board of Accounts is not going to look at it unless there was really some kind of kickback or money exchanged," said Julie Slavens, senior counsel for the Indiana School Boards Association, speaking generally about conflict disclosures.
As for the summer program recently approved by the board, Wesley said she has taken steps to separate her roles in the district and the institute.
"I'm not running the (education) programs," she said. "I'm running the emergency rental assistance."
School district contracts
Wesley says she does not personally receive any money from the school district, other than what she is paid as a member of the school board.
The Parenting Institute has secured hundreds of thousands of dollars through two grants with 21st Century Community Learning Centers, a federal program supporting academic enrichment during out-of-school hours.
The Indiana Department of Education, which administers the grant, confirmed the Parenting Institute was awarded $155,000 per year in the first four years of its funding. Next month, the grant increases to $200,000 per year over the next four years.
Wesley says her salary is paid through federal dollars, not money coming directly from the school district.
"I, Leslie Wesley, cannot go into any type of direct contract with South Bend schools at all," she said. "My salary comes directly from the grant that I have, that I wrote, with our agency. I don't get any direct gain."
Records documenting the Parenting Institute's finances are not filed in state and federal databases.
In August 2020, the IRS posted an automatic revocation of the Parenting Institute's tax-exempt status. The organization had failed to file tax returns for three consecutive years, according to an IRS database.
The returns typically disclose compensation received by a registered nonprofit’s officers, directors and other employees. The last return available in the IRS database for the Parenting Institute was filed for the 2016 tax year.
When asked about the group's nonprofit status, Wesley told The Tribune that her Indiana Parenting Institute of St. Joseph County is a part of a larger Indiana Parenting Institute entity.
IRS records show an Indiana Parenting Institute Inc, of Gary, Indiana, that is registered as a nonprofit. However, its CEO and founder, Laura Smith-Wynn, told The Tribune that her organization’s board is not involved in both regions.
When asked about the nature of her organization’s relationship with St. Joseph County and whether the two sites are governed by separate boards, Smith-Wynn referred questions to Wesley.
Wesley later declined to answer additional questions about her agency, saying it merged with another organization and is changing its name.
She would not share the new name with The Tribune, adding that she keeps information about her organization private.
"You would harass all of our board members and you would harass all of our staff," Wesley said. "That is exactly why our information is very private and I don't have to disclose that information to you."
Conflict of interest disclosures
Conflict of interest disclosures filed with the state can offer insight into how much a board member stands to profit from a contract between the organization they work for and the school district they serve.
Susan Gordon, director of audit services for the State Board of Accounts, said the disclosure forms should be filed in the state's public access system within 15 days of entering a contract or making a purchase that could pose a conflict.
The state's database, however, shows no disclosures have been uploaded for sitting South Bend school board members since 2018.
Brian Kubicki, an attorney for South Bend schools, said the district found record of forms filed this year for two school board members. Board member Stuart Greene submitted a form to the district saying he does not have any conflicts and member Ruth Warren disclosed a her relationship as a contract employee with The Family Connection, Kubicki said.
The attorney said the district does not require conflict of interest forms to be filed annually. He said board members should file a disclosure before entering a contract.
Wesley's 2018 disclosure lists two contracts between the Parenting Institute and South Bend schools for its 21st Century Community Learning Centers program, and one for an organization called Reposition Inc.
The form leaves blank a field asking to describe what money, if any, she would receive from a contract or purchase.
"The fact that this is the only disclosure does not give me pause or concern," Kubicki said. "There is no legal requirement to file annually."
Slavens of the Indiana School Boards Association said members are encouraged to file disclosures at the beginning of each year.
"I know many board members who, even if they're not sure it's a conflict of interest, they'll just go ahead and fill out the form," Slavens said. "It's one page, or two pages. It doesn't take too long to fill it out."
Even if a board member were benefiting financially from a contract with their district, Slavens said, it would not violate state law as long as a conflict disclosure was filed before the contract was secured.
"The statute in Indiana is a very high bar to me," Slavens said. "I typically say you have to commit murder. That's a very oversimplification, but it's not far off."
On the South Bend board’s recent vote to approve a contract with the Parenting Institute for summer programs, Wesley again told The Tribune that she keeps her distance from potential conflicts. She also pointed out that she abstained from the June 7 vote.
“For any type of funding or any grants or anything that the school corporation is giving any type of money to our agency, I’m removed,” Wesley said. “I’m removed from the vote, I’m removed from the conversations. I’m removed to as little as possible so I don’t have any direct input.”
Wesley said she has included information about her work relationships and companies her family works for in past disclosures.
"Even if you don't even think it's going to be anything, you fill it out just to disclose it," Wesley said, adding, "It's better to be safe than sorry and it's better to just disclose it."
She also said she is not familiar with the state's system but that she files disclosure forms every January with the South Bend superintendent's office. The school district provided The Tribune with a copy of Wesley's 2018 disclosure; Kubicki, the attorney, said the district has not been able to locate a more recent form for Wesley.
Wesley said she has not filed a disclosure yet for the Parenting Institute's latest contract for summer programs but plans to do so when the organization receives paperwork from the school district.
Reviewing board policy
As for the board's upcoming conflict of interest review, Wesley said she requested that the board discuss and approve disclosuresevery year.
She called McCullough's comments, coming at the end of the early June school board meeting, a "cheap shot" and "nothing more than a set up."
"How could you be a board member and not read your material before you come to a meeting?" Wesley asked, indicating that the district's proposed agreement with the Parenting Institute was available to board members before they voted.
When asked directly after the school board meeting, McCullough did not say specifically who or what organization her comments were about. McCullough did not respond to The Tribune's requests to follow up after the meeting.
Anella, the board president, said an attorney will help train the board on best policies and practices.
“We’ve asked our outside expert to come in and just basically give us a training on conflict of interest. What is our policy? What does that mean? What does it look like? How does it apply to board members? We can use this specific situation" Anella said. “This is obviously a good opportunity to go back and make sure that we’re all doing the right thing and if there’s any changes we need to make.”
HOA's (housing owner associations) are non-profit entities that collect dues and spend on behalf of the best interest of the members (housing owners). Associations are pretty much subject to the same rules as all nonprofits. Their distinction is that they exist to specifically benefit their members rather than the general public. The HOA board has a fiduciary duty to ensure the well being of the members and pursuit of mission. The board must act with due diligence and be compliant with local, county, state and/or federal laws. They must be fully informed. Again, they are liable for activities that negatively affect the members.
It appears that the HOA board in Florida, having the best advice in hand, chose not to look out for the safety of the members and now, not even the financial interests of the members. The board was not prudent - it did not look outside itself to act with a strategic eye to protect the members and their assets. This board failed. It will likely cost them assuming they bought enough insurance and weren't overly frugal.
Why doe this matter? Perhaps at minimum the Florida failing will be a wake-up call on HOA boards in particular and all nonprofit boards. Fiduciary duty means compliance but it also means being strategic. It means being prudent. This board was not.
Before this week or sometime in the near future the Gates Foundation will have only 2 board members running its foundation. Or maybe instead and likely to comply with many State's rules, there will be a replacement for Warren Buffet who is moving on to other interests. But in the short-run, Bill and Melinda will be the only two members of the board.
This reality gives me pause. The Foundation is a huge enterprise recognizing that wherever it puts its foot it leaves an imprint. And yes it has plenty of staff and consultants to inform decisions not without recognizing that 3 of the richest people in the world also make the strategic decisions and watch over assets. Good enough?
Maybe not. With only 3 directors I do wonder how "in touch" with the world these 3 uber rich folks can be. Are they not heavily dependent on the advice of staff who are likely a lot poorer but certainly not at the level of the poor they affect? Just how can they know pain and suffering and disease and poor health and.... the list goes on.
Is this really who should be doing the social engineering to change the world? Maybe but maybe not.
Nonprofit Quarterly has done, in my opinion, a great job discussing one of the (original) 4 Ps of marketing strategy management. This P: Access. In marketing vernacular, the P stands for Place and describes "how" a prospective customer or consumer gains the benefits of a product or service. The "gain" is what is now recognized in a broader context as access. And after many years beginning to ensure that folks with disabilities have physical access to places, there is a growing recognition and certainly an intention to ensure access to the world that goes beyond just physical. One of those "beyond just physical" places is the boardroom with a firm reminder that like many of the non-physical "places" "nothing about us is something without us". So, while nonprofit boards are exploring and hopefully taking action around the folks who have been left-out of decision-making, this article should serve as a reminder that persons with disabilities must also be included.
In a relatively long and detailed (I'll be it thorough, interesting and at times amusing) one opinion was entered pondering the abolition of nonprofit boards with the rationale being, if I may interpret< what good are they if they can't minimally manage money in the interest of their nonprofit! The author is specifically directing this question to museum boards but you can extrapolate to other nonprofits.
In my 40+ years on nonprofit governance consulting I have seen too many boards whose knowledge of their executive director's behaviors and values can be summed-up in 2 words: No Clue. It's not that boards don't forge relationships with their execs but most often except for board officers, the relationship is principally perfunctory and transactional. And, this is generally not a problem but for the reality that this most often lasts because there are so few opportunities for relational transactions OR more important, performance reviews. Of course this doesn't mean that more would be known or understood but the following piece about scrapping racist bird names if very telling about this reality. And, I should note it is likely a tip of the iceberg situation for many nonprofits that appear anything but racist. You may for instance recall my piece about Margaret Sanger.
But today, this blog is about the "birds". In this Washington Post article, there is the following:
The Audubon Society, the leading bird conservation nonprofit in the US, is still named after a man who enslaved Black people and criticized the emancipation of enslaved people in the Caribbean. In April, the CEO of the Audubon Society, David Yarnold, stepped down after employees came forward with their experiences with racism and sexism.
“Environmental organizations cannot operate with impunity … For too long, boards have looked the other way as executive leaders have ignored or directly perpetuated racism,” said Andrés Jimenez, executive director of nonprofit Green 2.0, in a statement responding to the leadership shakeup. Jimenez’s organization puts out a report each year that has tracked diversity within environmental organizations and foundations since 2017. This year’s report found a slight bump in the average number of people of color and women on staff. It was a show of some progress — but fell far short of a full reckoning with the legacies of racism and discrimination against Black, Indigenous, and other people of color within science and environmentalism.
Sobering; Upsetting? You decide and think about what is true or not about the core values and actions of your CEO. Oh, and let's not forget performance reviews.
In the tool chest of many governance consultants is something called a "board composition matrix". In simple terms nonprofit boards are advised to first create a chart that lists who are their current members and what are the skills or "gifts" they bring to the table. Alternately, some boards ask members to identify their skills or "gifts" and the subsequent check-list resulting from either report produces a list of what skills "could" or are missing. The identified gaps, presumably agreed-upon by members, becomes the Governance Committee's target for recruitment.
In more recent times, one element that was missing frequently was diversity: gender, ethnicity, etc. The result of adding this element has more boards simultaneously seeking a skill set that also matches a demographic set of so-called sought-for members.
I truly understand this efficient approach to filling board seats. At the same time I can see challenges particularly when understanding that a seated board often recognizes that the gaps be it demographic or skill tends to spring from the lack of a network by seated board members and a hesitancy to pursue unknown individuals. This reality often then should also contribute to rethinking board member recruitment as a process where, for many organizations that involves volunteers and donors, prospective members can be identified by "bringing them up the ranks". All these processes often fail to include what I believe should be the first criteria: passion. I further believe that most board duties can be taught either on-the-job or through formal training and a buddy system. With that said, I am quite satisfied using demographic representation as my primary measure and building a stronger training and buddy system for newbies.
Having said all this, Dr. Fram offers the following, what he poses to be as less considered categories. I believe these to be fine and well but not necessary criteria. Passion must always be first.
Anyway, here you go;
ENLARGING THE NONPROFIT RECRUITMENT MATRIX: THE ART OF SELECTING NEW BOARD MEMBERS
Enlarging the Nonprofit Recruitment Matrix: The art of selecting new board member
By: Eugene Fram Free Digital Image
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:
• Executive and Non-Executive Experiences: These include planners with broad perspectives needed to have visionary outlooks, a well as persons with unusually strong dedication to the organization’s mission. It may include a senior executive from a business organization and a person who has had extensive client level experience. Examples for an association for the blind could be the human resources VP for a Fortune 500 corporation and/or a visually impaired professor at a local university.
• Industry Experience or Knowledge: An active or retired executive who has or is working in the same or allied field. However, those who can be competitive with the nonprofit for fund development could then present a significant conflict of interest.
• Leadership: Several directors should be selected on the bases of their leadership skills/abilities in business or other nonprofit organizations. Having too many with these qualifications may lead to internal board conflict, especially if they have strong personalities.
• Governance: Every board member should have a detailed understanding of the role of governance, their overview, financial/due diligence responsibilities and the potential personal liabilities if they fail to exercise due care. In practice, nonprofits draw from such a wide range of board backgrounds, one can only expect about one-quarter of most boards to have the requisite knowledge. But there are many nonprofit boards that I have encountered that even lack one person with the optimal board/management governance knowledge. Some become so involved with mission activities that they do what the leadership tells them when governance issues are raised. Example: One nonprofit the author encountered, with responsibilities for millions of dollars of assets, operated for 17 years without D&O insurance coverage because the board leadership considered it too costly.
• Strategic Thinking & Other Desirable Behavioral Competencies: Not every board member can be capable of or interested in strategic thinking. Their job experiences and educations require them to excel in operations, not envisioning the future. Consequently, every board needs several persons who have visionary experiences and high Emotional Quotients (EQs.) Those with high EQs can be good team players because they are able to empathize with the emotion of others in the group. Finding board candidates with these abilities takes detailed interpersonal vetting because they do not appear on a resume.
• Subject Matter Expertise: Nonprofit Boards have had decades of experience in selecting board candidates by professional affiliations like businessperson, marketing expert, accountant, etc.
• Other Factors Relevant to the Particular Nonprofit: Examples: A nonprofit dedicated to improve the lives of children needs to seek a child psychology candidate. One focusing on seniors should seek a geriatric specialist.
There is a modest amount of prescriptive literature as to who or what is a nonprofit board chair. There is even less research-based literature on this subject (be sure to check-out Voices of Board Chairs). What is clear to me is that there is much to be learned about who should be and what should be the job and skills of a nonprofit board chair or conversely, don't accept carte blanche the unresearched I'll be-it experienced-based literature on the subject. One example is from better boards. There is a variety of interesting and sometimes curious assumptions included. Please read and DO judge for yourself.
Once upon a time there was a board member who was passionate and diligent but inexperienced and naïve who was asked to take on the role of Chair of the Board.
“I’m really flattered. I don’t really know what I have to do other than chair some meetings, so how hard can it be?” they thought to themselves.
A fairy tale it might appear to be, but this was me. Twenty years on, I reflect on my transition from well meaning board member with little experience to having held the role of chair on a few occasions in my career. At one level, the chair is no different to any other board member. We come to the table as individuals, with our own set of skills, knowledge, opinions and bias but we make decisions collectively and are equally accountable for the decisions made by the board.
In reality, the role of chair brings with it other responsibilities. Deciding who will chair your organisation should be a considered process; not just appointing a person who has time on their hands, has been on the board a long time or wants to have the experience noted on their resume.
So, let’s explore a few of the things that sets the role of the chair apart:
Own the role and set the tone/rules
A well performing chair is a leader; a leader to other board members and a leader to the CEO. Chairs who act in line with positive organisational values, hold others to account in also acting in line with values, and who find ways to extend those standards across the organisation through oversight of policies, procedures and communications are setting the culture.
Creating time on the agenda to discuss culture and its drivers shows commitment and understanding of the true impact of culture on organisational outcomes. The chair, in setting the agenda can instigate practices such as staff presentations, client stories, site visits, survey’s, reports on turnover and complaints that all generate discussion about culture and its impact.
Always come back to purpose and objectives
The chair, as leader of the board can draw attention back to purpose and objectives in any discussion, but especially when making significant decisions such as new partnerships, services or investments. In doing so, the chair can anchor the organisation’s strategic intent; it prompts the question of whether the strategic objectives remain valid, contemporary, accurate and understood. It also allows discussion about what could distract attention from achieving what we set out to do. (I am also saying that organisations should change their strategy if needed. Not necessarily the glossy published strategic plan, but the detail of what the organisation is really working towards can be amended in line with changed circumstances.)
Integrate risk management
Risk management is everyone’s responsibility so the chair can lead discussion that facilitates the exploration of risk identification and management. For the most part, the chair will want to ensure that risk related discussion is focused on what could stop the organisation achieving strategic objectives; being future focused and forward thinking. The chair will also have a role in ensuring that the operational aspects of risk management, including governance systems such as committees and reporting structures are in place, and that policies and procedures are regularly reviewed, fit for purpose and meeting compliance standards. And there are times when the board needs to spend time looking at transactional risk management activity such as incident and audit reports. The chair’s role here is to encourage the board to look for the insights from transactional data; what are the trends?, how do we stops this?, how do we repeat this?, rather than focusing on the specific incident.
Know enough about the business and context
In order to lead discussion, the chair needs to take time to fully understand the organisation and the context in which it operates. Seeking ways to stay abreast of what could impact the organisation, through networks, memberships and subscriptions across a wide range of areas that might intersect the organisation, will assist the chair in leading and contributing contemporary knowledge to the discussion.
Know other board members and draw on diverse thinking
By knowing the story of each person at the table, the chair can pre-empt, accommodate and (I mean this in the best way) exploit individual needs, strengths and knowledge. Quality decision making implies having thought through an issue and explored it from multiple perspectives. We often think of diversity at the board table as representatives from diverse groups, such as gender, ability, social or ethnic background, but don’t forget the reason behind bringing these people together is diversity of thinking.
Promote constructive debate/discussion
The chair, in chairing meetings and assisting to shape the agenda has the task of leading discussion. This means that the chair can invite people to comment, take a proactive role in leading a discussion or hold back their opinion until others have spoken, and can provide additional information or suggest a provocation in order to challenge thinking. Usually unity of thinking is not of concern, but boards who do not professionally and constructively debate issues may leave themselves open to risks or not thinking through mitigation strategies.
Mentor and support the CEO
The CEO reports to the board and has clear accountabilities to run the organisation. The chair is the primary contact for the CEO and this relationship requires a particular balance of trust and collegiate respect. It is not a relationship of friendship but needs to be friendly and professional. The chair should provide the CEO with support; be a sounding board and mentor. This can be done by anticipating the boards response, advising the CEO on the type and level of preparation the management team needs when presenting to the board, share personal insights and promote the CEO’s ongoing professional development.
Be available Organisations are dynamic and the chair has a pivotal role in linking the management team with board. Being available and responsive to address issues, provide guidance, test ideas, share concerns, sign things, distribute information, seek input or decisions from others in this 24/7 world we live in, is critical to the success of the organisation.
First published in the Better Boards Conference magazine July 2020.
About Jane Boag
Jane Boag B. App Sc (OT), Grad Dip Community Health, GAICD, MICD Since beginning her career as a clinician, Jane has held a variety of senior and executive roles in health and related fields such as Benetas, Australian Unity and the Transport Accident Commission (TAC) in which she has demonstrated her focus on positive client experiences and strong business performance outcomes. Her understanding of risk management and governance is the focus of her current role at VMIA as Head of Enterprise Risk Advisory, where the team supports approximately 4300 Victorian public sector organisations to improve their risk maturity and capability. Jane has held a number of non-executive Director roles over the last 20 years, several as chair.
My associate Dr. Eugene Fram has offered the following insights based on a McKinsey study focused on ineffective, complacent and striving boards. The insights are helpful for framing thoughts on this matter. They may however not be a fit for all nonprofits.
WANT BETTER NONPROFIT BOARD CULTURES? LOOK FOR FOUR BOARD BEHAVIORS
By Eugene Fram Free Digital Image
Board cultures can be difficult to modify or change in for-profit and nonprofits. A recent McKinsey study demonstrated the strength of the board culture in three different levels of board operations—ineffective, complacent and striving. * Differentiated achievement seems to be largely dependent on four behaviors. (See bold type.) Centered on my experiences, they can be applied to nonprofit boards. At the least, the behaviors can motivate considerations for board modifications.
• There is a culture of trust & respect in the boardroom: Study data showing respondents’ agreement with the statement: 39% of ineffective boards; 66% of complacent boards and 88% of striving boards. Trust and respect are also critical for nonprofit boards, but they are probably more difficult to achieve for several reasons. First, nonprofits are often seen as lacking efficiently and effectiveness because they operate on smaller budgets and are often housed in marginal physical facilities. In addition, a long-standing nonprofit tradition is for board members to become directly involved with operations. This leads to external perceptions of nonprofits needing managerial support.
Boards will trust management to a higher degree when managers can demonstrate they have the necessary abilities to meet challenges with care and insight.
Finally, nonprofit boards are less homogeneous in terms of director backgrounds since they represent a much broader base of society.
• Board & management-team members constructively challenge each other in meetings: Study data showing respondents’ agreement with the statement: 44% of ineffective boards; 53% of complacent boards and 76% of striving boards. Nonprofit board environments are not well known for being challenging, but the potential really stands out in the for-profit sector—striving boards are about 31 points ahead of ineffective ones on this behavior. But with nonprofit board members being comprised of volunteers, this will require a huge cultural shift. “Going along to get along” is a common mantra in the nonprofit sector. Few nonprofit board member, through rigorous discussion, possibly leading to “no” votes, want to be the cause of internal conflict.
• The chair runs meetings efficiently and effectively: Study data showing respondents’ agreement with the statement: 37% of ineffective boards; 56% of complacent boards and 69% of striving boards. Among dozens of nonprofit boards with which I have interacted, the chairperson’s views receive a great deal of deference to avoid conflict. But note that there is value in choosing a chair who can lead meetings in an efficient and effective manner—69% of striving directors thought this a factor of success versus only 37% of those on ineffective boards.
• Board members seek out relevant information beyond what management provides, to deepen knowledge: Study data showing respondents’ agreement with the statement: 31% of ineffective boards; 59% of complacent boards and 62% of striving boards. The tenor of the Sarbanes-Oxley Act (2002) called for for-profit directors to seek information beyond that which management provides. Again, note the wide data differences between ineffective and striving. In my experiences with nonprofit boards, the openness of management to having board members interact with staff below the C-Suite levels varies significantly. Some are open to it. Others who fear that such contact will lead to “end-runs”–staff will take grievances directly to board members. Since transparency and openness are board values in the 21st century, every nonprofit should have provisions for board members to seek information below the C-Suite level.
About Jane Boag