Nonprofit Board Crisis

Free Nonprofit Board Resource #NonprofitBoards

Does your Governance Committee or do your board officers have questions about what your board can and maybe should be doing?  Here's a FREE resource that walks folks through the steps and you don't have to read this sequentially and there's no obligation and most content applies to most nonprofits.  And, it's free - curiously so.  

First Time Directors on Boards #NonprofitBoards

I found the following Fortune.com article on the experience of and how to receive newbies to a nonprofit board most insightful.  I needn't say more but that this is important reading for board chairs and governance committees.

 

First-time directors face social pressures as boards diversify July 29, 2022

It takes courage to walk into a room filled with relative strangers, especially when those strangers have deep familiarity with one another, speak the same shorthand, and behave according to an unspoken code of conduct.   But scores of new board directors have summoned the confidence to enter these rooms in recent years. And with boards increasingly prioritizing diversity—gender, race, and even work experience—their recruits are more likely to be people without directorship experience, says organizational psychologist Laryssa Topolnytsky, a partner at the talent and consulting firm Heidrick & Struggles.  This sea change presents a unique opportunity to devise new guidelines during the introductory period, which is an underappreciated yet critical part of the onboarding process. Several consultants and organizations, like the National Association of Corporate Directors, offer excellent certification and training programs, says Topolnytsky, who heads her company’s CEOs and boards consulting practice in the Americas. But she pushes new directors to go deeper, building awareness of the group dynamics and culture well before their first board meeting.  New board members should strive to forge strong interpersonal relationships from the outset, she says, and understand the values and motivations of fellow directors so that they’re comfortable enough to disagree during meetings “and make the best decisions as a group.” “At that level of corporate achievement, you’re going to run into some big personalities,” Topolnytsky says. First encounters with powerful, even legendary, executives can be exciting. But they can also be stressful, particularly if the company is in crisis. Boards meet far less often than executive teams, she notes, which makes it harder to build trust quickly.  Here’s some of the advice she shares with board novices:  • Confirm that the board is inclusive. New board members from underrepresented groups might ask themselves two questions: How open is the board to someone like me, with my unique skills? And is this board choosing me because I’m underrepresented or because of my expertise? Have conversations with the head of the nom/gov committee or the board chair to gauge the level of inclusivity. (The vast majority of boards, especially at large companies, do understand why boards should be diverse, Topolnytsky underlines.) • Do research. Turn to online resources and your search firm to get a sense of your fellow board members—and what makes them tick. Beyond LinkedIn, seek out press interviews and videos, such as Ted talks. These are the places to get “rich” information, says Topolnytsky. “Are they succinct? Are they more effusive? Do they have causes they care about?” • Book one-on-ones. Proactively set up meetings with all members, especially those you haven’t yet met, ideally before the first board meeting. Continue to meet regularly. Topolnytsky reccomends setting up at least one meeting before and after every group board meeting for the first year. The onus to integrate with fellow board members shouldn’t just fall on newcomers. Board chairs and committee leaders also have a duty to become well acquainted with new directors and understand what they have to offer, Topolnytsky says. One tip she gives chairs is to look over the meeting agenda and pinpoint areas where new members can lead a discussion and flex their subject matter expertise, rather than expecting them to force their way into the conversation—if at all.  Peter Gleason, CEO of the NACD, says that expectations have changed for new directors. In the past, “people would take their time, sit and listen for several board meetings before they jumped into the conversation,” he tells Fortune. “You don’t have that luxury anymore.” It’s worth noting that for new directors from underrepresented backgrounds, there’s also a risk to being a polite, quiet observer during their debut. “Research shows that for some underrepresented groups, that could fuel the unconscious bias that some people might have” about their merits, Topolnytsky says. In other words, speak up early.  Lila MacLellan [email protected] @lilamaclellan

Board Resigns En Mas #NonprofitBoards

Would that I had more details but the whole board of Cricket Scotland (a sport team) resigned "ahead of a report into racism".  This now resigned body says it is committed to reforms but now that they have resigned, the question is "who will implement the report recommendations"?  Certainly not the board! And, I trust there are processes in place to repopulate the board with/in by-laws.  But was a mas resignation really the solution?  Is this some form of penance for each member?  Is this easier than apologizing?  Not the ideal solution in my mind.  Check-out the following Easter Eye Biz article for some detail on the story.

 

CRICKET

Cricket Scotland board resigns ahead of report into racism

The board said they were committed to implementing the findings of the review.

• Chandrashekar Bhat
• 25 July, 2022

By: Chandrashekar Bhat

The board of Cricket Scotland resigned with immediate effect on Sunday, a day before an independent report into racism in the sport is published.

The review was commissioned after allegations were made by one of the country’s all-time leading wicket-takers, Majid Haq, who said Cricket Scotland was “institutionally racist”.

Haq’s former team mate Qasim Sheikh also spoke out about abuse he had suffered, with both players saying they were treated differently due to the colour of their skin.

The board said they were committed to implementing the findings of the review, saying it will provide a “watershed moment for Scottish sport and society”.

“We are all truly sorry and have apologised publicly to everyone who has experienced racism, or any other form of discrimination, in cricket in Scotland,” the board said in a letter to interim CEO Gordon Arthur.

“This is, without doubt, the start of another long journey to overhaul and modernise the governance of the sport to ensure its continued success in the years ahead.”

The board acknowledged the support from SportScotland as they look to achieve two things — a “speedy resolution” of racism issues as well as overhauling and modernising the governance of the sport.

The board said that although they had not seen the report, they were aware of the proposed timescales, adding that the delivery of the two programmes were “unachievable” within the timetable.

“Consequently, we believe we must now step aside to enable the required progress to be made in the coming months,” it added.

Aamer Anwar, the lawyer representing Haq and Sheikh, said a “devastating investigation into institutional racism” would be published on Monday.

“This morning the board of Cricket Scotland has resigned, that’s a start but what about the role of selectors, senior coaches, umpires and boards of local leagues? Time for real change,” he said.

The allegations came after Azeem Rafiq told a British parliamentary committee in November about the discrimination he faced while at Yorkshire, with the spinner also saying the sport in England was “institutionally racist”.

Nonprofit Board Recruitment #NonprofitBoards

The following OpenMinds article titled "Nonprofit Board Member - The Other Workforce Problem" is a clever title about a substantive problem for most nonprofit boards providing a less than stellar, in my opinion, solution.  There are certainly solutions "hidden" in the article but overall, the best contribution is to consider why what is said makes less sense for most nonprofits.  I have inserted my thoughts into the article.

Non-Profit Board Members—The Other Workforce Problem

By Monica E. Oss, Chief Executive Officer

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Finding the board members that non-profit organizations need is a growing challenge. People are busy. Roles are sometimes ill-defined. Recruiting is often not well thought out. (For more, see Six Roadblocks To Board Recruiting). The upshot—half of non-profit CEOs report that they don’t have the right board members, and the board members aren’t spending enough time on the right priorities (see Leading With Intent: BoardSource Index Of Nonprofit Board Practices – June 2021). Chief executives see a lack of commitment to fundraising (76%), community relationships (67%), strategic thinking (59%), strategic impact monitoring (53%), and setting strategic direction (48%) as key challenges.  I pose that the first issue is that CEO's view the board as "their" board members and that "they" the CEO don't have the right board members.  I pose further that this is for the board to determine.

Non-profit health and human service organizations face a unique challenge among other non-profit organizations. Unlike most other non-profit organizations, the majority of health and human service organization revenue is earned income—not contributions or grants. I don't know what this is based on and whether it also applies no matter the budget size.   The health and human service market is becoming more competitive, more tech-enabled, and more value-based. As a result, organizations need board members who are not only mission-focused but also have business acumen.  I think they have to be mission-focused no matter the capacity.

This leads to two questions—what the key attributes are needed in non-profit board members of health and human service organizations and what approach should chief executive officers take when recruiting board members?  And why is the assumption that it is the CEO's who should recruit?  It's not their board.

 

What key attributes are needed? The short answer is any attributes that will keep the board and the organization “future ready.” Boards must be structured to guide their organizations to success, and that structure will probably include a very diverse group of skillsets. Central to those skillsets will be both financial and business acumen, as well as a focus on mission, community, and programming.

“Organizations who is "organization"? need to be planful with their Board and they must establish what types of individuals are needed on that board,” said OPEN MINDS Senior Associate, Paul Duck. “For example, backgrounds in finance, legal, lending, and compliance are critical. The individuals ideally will have a connection to the mission of the organization and the work helping individuals, families, and the community.”  ?Ideally?

“Many boards  REALLY? have Articles of Incorporation requiring certain professions—such as bankers, social workers, lawyers, or doctors—be represented on the board,” said OPEN MINDS Senior Associate, Ray Wolfe. “More importantly, I think are the personality traits needed. I think there are three that stand out. The first is passion and engagement in the mission. YES Board members must be driven by their own sense of meaning and importance of your work and be willing to contribute their time and energy. The second is creativity and willingness to experiment. The speed of change will require leadership that isn’t committed to traditional views and are willing to adapt. They must be focused on what it will take to serve the population not the preservation of the traditional ways. And the third is being a conciliator and a team player. Divided boards are useless and worse than providing no direction at all. The stress of change makes board unity critical.”  I generally like this list.

How to recruit board members? Step one is for the chief executive officer (CEO) and the board chair to clearly define the future strategic direction of the organization, and overlay that with the performance expectations needed to succeed. Then the board can weight the expertise it has with the expertise it needs, along with proper level of guidance and oversight to help steer the organization to success.  This is the board's task not the CEO's!!!  and certainly not the CEO and Chair alone.

“The chief executive officer, as well as the board chair, must look throughout the community for individuals that have a desire to serve,” said Mr. Duck. “Many organizations fail to recruit an individual (or two) that understand the health care dynamics and the ever-changing nature to the market. With the fast rate of change, these individuals with health care experience can ratify the thoughts and strategies of the chief executive officer and position the board to act more swiftly as needs arise. Organizations should also look for talented individuals that are not in the local market and have a national perspective. These types of board members can contribute at a level that often is missed by being too myopic on change that has happened elsewhere and that is likely to impact the local organization.”

“I don’t think the role of recruiting should rest with the chief executive officer,” said Mr. Wolfe. YES even if at all!  “Even with best of intentions, a CEO will likely recruit members who share their views and do not provide the self-criticism necessary. A membership committee of the board should be continuously recruiting, not just when a vacancy occurs. They should have guidelines on talents and consensus on personal attributes. Solid transitions and long-term evolution are best guaranteed by this.”

Boy Scouts, No but Pope Yes #NonprofitBoards

In the field of taking responsibility although not specifically consequences, the Roman Catholic Church Head is 2 for 2.  For all the many "bad" things priests and now heads of schools in Canada done to Church and non-church members, the Pope has apologized.  And yes, there have been consequences but more so on the local levels which is quite ok.  To learn more about the Pope's latest apologies do check-out the story below.

Of course I would be remiss if I don't remind folks that the Boy Scouts USA is anything like the Pope although historically very Roman Catholic among their other so-called faith allegiances.   To this date the BSUSA (emphases on the B.S.) have been in the process of trying to shirk their many, many years of abuse by declaring bankruptcy while albeit there does appear to be some agreement to a payout (as though a payout wipes away the emotional damage).  Equally important, the BWUSA board and its leaders have yet to apologize for their actions - every.  

Anyway, here's a slightly better approach to righting "sins".  

Pope lands in Canada, set for apologies to Indigenous groups

By NICOLE WINFIELD, ROB GILLIES and PETER SMITHtoday

 

Pope Francis kisses hand to Canadian Indigenous woman as he arrives at Edmonton's International airport, Canada, Sunday, July 24, 2022. Pope Francis begins a weeklong trip to Canada on Sunday to apologize to Indigenous peoples for the abuses committed by Catholic missionaries in the country's notorious residential schools. (AP Photo/Gregorio Borgia)

EDMONTON, Alberta (AP) — Pope Francis began a historic visit to Canada on Sunday to apologize to Indigenous peoples for abuses by missionaries at residential schools, a key step in the Catholic Church’s efforts to reconcile with Native communities and help them heal from generations of trauma.

Francis kissed the hand of a residential school survivor as he was greeted at the Edmonton, Alberta, airport by Indigenous representatives, Canadian Prime Minister Justin Trudeau and Mary Simon, an Inuk who is Canada’s first Indigenous governor general.

The gesture set the tone of what Francis has said is a “penitential pilgrimage” to atone for the role of Catholic missionaries in the forced assimilation of generations of Native children — a visit that has stirred mixed emotions across Canada as survivors and their families cope with the trauma of their losses and receive a long-sought papal apology.

Francis had no official events scheduled Sunday, giving him time to rest before his meeting Monday with survivors near the site of a former residential school in Maskwacis, where he is expected to pray at a cemetery and apologize.

Francis exited the back of his plane with the help of an ambulift, given his strained knee ligaments have forced him to use a wheelchair. The simple welcome ceremony took place in airport hangar, where Indigenous drums and chanting broke the silence. As Trudeau and Simon sat beside Francis, a succession of Indigenous leaders and elders greeted the pope and exchanged gifts. At one point, Francis kissed the hand of residential school survivor Elder Alma Desjarlais of the Frog Lake First Nations as she was introduced to him.

“Right now, many of our people are skeptical and they are hurt,” said Grand Chief George Arcand Jr. of the Confederacy of Treaty Six First Nations, who greeted the pope. Yet he expressed hope that with the papal apology, “We could begin our journey of healing .. and change the way things have been for our people for many, many years.”

Indigenous groups are seeking more than just words, though, as they press for access to church archives to learn the fate of children who never returned home from the residential schools. They also want justice for the abusers, financial reparations and the return of Indigenous artifacts held by the Vatican Museums.

Assembly of First Nations National Chief RoseAnne Archibald, one of the country’s most prominent Indigenous leaders, said several members of her family attended residential schools, including a sister who died at one in Ontario. She described it as “an institution of assimilation and genocide.”

During her fight to Alberta, “I was just so overcome with emotion and there were different times on the plane where I really had to stop myself from breaking into a deep sob,” she said. “I realized that I am an intergenerational trauma survivor and there are so many people like me.”

Francis’ week-long trip — which will take him to Edmonton; Quebec City and finally Iqaluit, Nunavut, in the far north — follows meetings he held in the spring at the Vatican with delegations from the First Nations, Metis and Inuit. Those meetings culminated with a historic April 1 apology for the “deplorable” abuses committed by some Catholic missionaries in residential schools.

The Canadian government has admitted that physical and sexual abuse were rampant in the state-funded Christian schools that operated from the 19th century to the 1970s. Some 150,000 Indigenous children were taken from their families and forced to attend in an effort to isolate them from the influence of their homes, Native languages and cultures and assimilate them into Canada’s Christian society.

Then-Prime Minister Stephen Harper issued a formal apology over the residential schools in 2008. As part of a lawsuit settlement involving the government, churches and approximately 90,000 surviving students, Canada paid reparations that amounted to billions of dollars being transferred to Indigenous communities. Canada’s Catholic Church says its dioceses and religious orders have provided more than $50 million in cash and in-kind contributions, and hope to add $30 million more over the next five years.

Canada’s Truth and Reconciliation Commission in 2015 had called for a papal apology to be delivered on Canadian soil, but it was only after the 2021 discovery of the possible remains of around 200 children at the former Kamloops residential school in British Columbia that the Vatican mobilized to comply with the request.

“I honestly believe that if it wasn’t for the discovery ... and all the spotlight that was placed on the Oblates or the Catholic Church as well, I don’t think any of this would have happened,” said Raymond Frogner, head archivist at the National Centre for Truth and Reconciliation.

Frogner just returned from Rome where he spent five days at the headquarters of the Missionary Oblates of Mary Immaculate, which operated 48 of the 139 Christian-run residential schools, the most of any Catholic order. After the graves were discovered, the Oblates finally offered “complete transparency and accountability” and allowed him into its headquarters to research the names of alleged sex abusers from a single school in the western Canadian province of Saskatchewan, he said.

The Inuit community, for its part, is seeking Vatican assistance to extradite a single Oblate priest, the Rev. Joannes Rivoire, who ministered to Inuit communities until he left in the 1990s and returned to France. Canadian authorities issued an arrest warrant for him in 1998 on accusations of several counts of sexual abuse, but it has never been served.

Inuit leader Natan Obed personally asked Francis for the Vatican’s help in extraditing Rivoire, telling The Associated Press in March that it was one specific thing the Vatican could do to bring healing to his many victims.

Asked about the request, Vatican spokesman Matteo Bruni said last week that he had no information on the case.

At a news conference Saturday in Edmonton, organizers said they will do all they can to enable school survivors to attend the papal events, particularly for the Maskwacis apology and the Tuesday gathering at Lac Ste. Anne, long a popular pilgrimage site for Indigenous Catholics.

Both are in rural areas, and organizers are arranging shuttle transport from various park-and-ride lots. They noted that many survivors are now elderly and frail and may need accessible vehicle transport, diabetic-friendly snacks and other services.

The Rev. Cristino Bouvette, national liturgical coordinator for the papal visit, who is partly of Indigenous heritage, said he hopes the visit is healing for those who “have borne a wound, a cross that they have suffered with, in some cases for generations.”

Bouvette, a priest in the Diocese of Calgary, said the papal liturgical events will have strong Indigenous representation — including prominent roles for Indigenous clergy and the use of Native languages, music and motifs on liturgical vestments.

Bouvette said he’s doing this work in honor of his “kokum,” the Cree word for grandmother, who spent 12 years at a residential school in Edmonton. She “could have probably never imagined those many years later that her grandson would be involved in this work.”

___

Gillies reported from Toronto.

___

Associated Press religion coverage receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content.

Board Members Aging Out? #NonprofitBoards

The following article raises interesting questions about board member age limits particularly, if enforced, as a way to enable diversification.  

More companies are setting age limits in order to retool their boards July 22, 2022

While most boards are aware of the need to diversify their ranks, and its related benefits, changing a board’s makeup isn’t so simple. Vacancies do not occur frequently, meaning board leaders must either expand the board or wait for someone to retire or step down before adding someone new. The role and responsibilities of directors have evolved dramatically in recent years so “it makes sense that you have to think much more broadly about who the people on your board are, and constantly review and make sure you’ve got the right people,” Pamela Marcogliese, a partner who specializes in corporate governance for the law firm Freshfields Bruckhaus Deringer, explains. Age maximums are emerging as a way to operationalize that without forcing directors to leave. Departure policies such as age or term limits are playing a greater role in board refreshment. According to data compiled by Freshfields, 70% of S&P 500 companies have mandatory retirement age policies, compared to around 50% in 2015. In 2021, 6% had term limits, a figure that has stayed relatively flat over the years. In 2021, S&P 500 companies appointed 456 new independent directors, the most since 2004, which Marcogliese says is “a function of companies really thinking carefully about all of the ancillary issues that are going on.” Scrutiny over board composition is driving companies to set departure policies, as well as the rising directorship workload, and a need to diversify the skills brought to the board. Departure policies offer an easier way to regenerate boards. The challenge companies face when setting these policies is settling on a sensible number for term limits or age maximums, Marcogliese says. About half of boards set their retirement age at 75 or older, according to Freshfields. Term limits range from 10 to 20 years, with 73% of them at 15 years or more. Not much data analysis or science goes into these decisions, however, and they are mostly meant to meet market expectations. “There are some constituencies out there who think that if you have been on a board for too long— and everybody has their view as to what ‘too long’ means—it decreases independence from management,” Marcogliese says. Another way boards can shake up their membership is through shareholder activism, which of course is not voluntary on their end. Shareholder proposals that aim to address governance issues are common. And in some cases, they can lead to removal of board members for conduct that’s detrimental to the company, an inability to meet ESG needs or overboarding, per the report. “It is not uncommon for director profiles to be the subject of an activist demand,” Marcogliese says. “If you’re looking to attract the support of certain investors, having an ESG component or diversity component can be helpful to attract those votes.” *** Speaking of departures, this is my final newsletter as the lead writer for The Modern Board. It has been an honor and a pleasure to dive into this arena and serve an audience consisting of executives who run some of the largest, most influential businesses in the world. I hope this newsletter was informative, challenged your assumptions, and offered a window into the ways corporate strategy is evolving with the world around us. Starting next Friday, my colleague Lila MacLellan will take over the newsletter. She can be reached at [email protected]. Going forward, I am still a proud member of the Fortune team. I’m going to be covering the future of work and talent strategy for our Leadership section! If you’d like to share your company’s innovative work in this space, send me an email! Aman Kidwai [email protected]

CEO Onboarding #NonprofitBoards

CEO onboarding (yes, what was once more commonly referred to as "orientation" is something not carried-out very professionally nor frequently for that matter (implementation versus doing).  So of course those of us who observe and advise regarding how boards can behave effectively or efficiently have much to say on the matter.  Do check-out below what Dr. Fram has to say on the subject.  Also, take at look at what I have just recently also said on the subject.  Thanks and productive reading.

ONBOARDING THE NEW NONPROFIT CEO: WHO’S IN CHARGE?

Onboarding the New Nonprofit CEO: Who’s In Charge?

By Eugene Fram                  Free Digital image

When the chair of the search committee announces that a new CEO has been selected, there is visible relief in the boardroom. After the stress of a waning—or even absent executive at the helm, directors tend to relax, engaging in a series of social events that provide a pleasant if superficial acquaintance with the new executive.

What actually lies ahead is much more serious and vital to the future of the organization. Call it orientation, acculturation or transitioning; it is the board’s responsibility to see that the CEO is grounded in every aspect of the organization. And that requires a plan that is carefully structured and may take a year to complete. Major responsibility for the plan and its implementation rests with the board chair and one or more senior board members. While there are many formats to achieve this goal, the best, in my opinion, is what has been described as a customized format.

Under a customized format the nonprofit board tailors a program that helps the new executive develop a solid base in the organization and an understanding of its unique climate and culture.
Biweekly meetings should be scheduled. However, both sides should be wary if the time required does not decrease considerably as the year progresses. The CEO will then operate more independently, perhaps even making modest mistakes from which he/s can easily recover. Those handling the orientation must take care to delegate responsibility incrementally, based on the CEO’s background and experiences. Every custom designed orientation program should include nine steps. Some must be taken in sequence, while other steps can proceed concurrently.

1. Developing immediate and long-term goals: After several months on the job, ask the CEO to solidify his immediate goals and determine whether or not a new strategic plan needs to be considered.

2. Reviewing fiscal and personnel resources: The CFO and chair of the audit committee should be responsible for this orientation, assuming the CEO has an adequate financial background. If not, the CEO and the board chair need to find a way(s) to fast track the person’s development in this area. When the CEO has had a chance to assess the staff talent bank, he and the board chair should compare notes to determine if their assessments are on the same page.
3. Examining current policies and procedures: As soon as possible, the board chair and CEO need to have a discussion about the division between board responsibility for policy and strategies and the CEO’s responsibilities for operating issues and tactics.
4. Developing staff relationships: Depending on the size of the staff, the board might sponsor one or more informal meetings between the CEO and Staff.
5. Fostering board relationships: The board chair needs to make certain that the CEO has personal one-to-one meetings with all board members as practical, depending on the composition of the board.
6. Cultivating community or industry relationships: The amount of time necessary for this step will depend on the person’s background.
7. Understanding the clientele, membership and other stakeholders: This function should evolve over the first year, supported by the board chair.
8. Discussing the new executive’s career expectations: If this has not been determined during the hiring process, it should be discussed frankly towards the end of the first year.
9. Establishing a succession plan should the executive be temporarily incapacitated: After the CEO becomes comfortably acquainted with the staff, the board chair and CEO need to make this decision. If they decide that there is no one on staff to fill the temporary gap, the board must decide how to seek outside assistance, e.g., a consultant, a board member, a recently retired CEO, etc.

On boarding a new CEO clearly has not been a priority for a portion of nonprofits. “Nearly half (46 Percent0of the 214 CEOs responding to a 2014 Bridgespan Group survey reported getting little of no help from their boards when first taking on the (CEO) position.” * The cost of this gap to nonprofit organizations must be substantial.

* http://www.bridgespan.org/publications-and-tools/nonprofit-boards/resources-for-board-members/nonprofit-boards-role-in-onboarding-a-new-ceo.aspx#.VzzcYWbLMz4

Junior Board #NonprofitBoards

The following article by UBS provides some interesting consideration for those seriously wanting to recruit folks for their board.  The idea that is being posed: a Junior Board.  All the details are outlined well enough to get the picture but of course I can't help bristling at one item: a Junior "Board".  Yes, it's nomenclature that bothers me most in this case.  But nomenclature counts noting jam is not the same as preserves etc.  So DO consider this concept but please, find a different name than Board.  There is only one Board for a nonprofit and while the article does a fine job of differentiating the Governing from a non-governing board, the lay-person does not generally understand the difference.  Nomenclature matters for this purpose.

Corporate Clients: The benefits of starting a nonprofit junior board

Junior Boards are the future leaders of an organization’s governance, and as such a vital pipeline for talent. Cultivating one within your organization is a great way to train individuals who are already engaged and involved. We discuss several benefits to starting a junior board and questions to help you consider if it’s the right decision for your organization.

by UBS Editorial Team15 Jul 2022

 

Starting a Junior Board presents a forum for young professionals to be in service to a mission of a charity that is personally meaningful. (UBS)

Why start a Junior Board?
The first step in considering whether to start a Junior Board is to be clear on the benefits. While there are similar characteristics to all non-governing boards, there are distinctive benefits to Junior Boards, such as giving junior talent the opportunity to raise their career profiles while enhancing the brand profiles of organizations looking to attract that talent. Participation may also be deeply rewarding for someone interested in a particular issue.

A key benefit of a Junior Board is the opportunity to give individuals the chance to practice their values by serving on your board. The first step is to clarify “why”? What are the organizational values you want to promote by providing the volunteer leadership opportunity? Every organization operates as its own value system—whether it be an arts organization that values innovation, or a college success organization that values inclusion. Centering on your organization’s values will help you source the talent you want to attract, and will nourish the vitality and productivity of the board.

Another question to answer when considering starting a Junior Board is what are your goals and how do you want to go about achieving them? Prior to starting a Junior Board for your organization, you may want to consult with others that have already started Junior Boards and ask about the surprises they faced as well as the benefits they have enjoyed. Meeting with the nonprofit’s leadership will help you better manage organizational expectations.

Regardless of board structure, starting a Junior Board presents a forum for young professionals to be in service to a mission of a charity that is personally meaningful, and learn skills that are transferable to a current or prospective career. It also provides them with an opportunity to network with like-minded peers as well as meet and work with people they might not otherwise come across in their professional or personal lives. Any board experience is a way to develop leadership prowess, observe conflict resolution and consensus building in action, and understand what it takes to move an organization’s strategic focus and fundraising forward.

Ask these questions to determine if starting a Junior Board is right for your organization:

• How can a Junior Board help meet the overall goals of your organization?
• What mandate are you giving to your Junior Board? Have you given it clear objectives?
• What is expected of Junior Board members from the standpoint of time and talent contributed?
• What is the expected time commitment for Junior Board members? How often will they meet?
• Are there terms or term limits for Junior Board members?
• Is there a stated “give/get” goal?
• How many members will be on your organization’s Junior Board and how will you determine that number
• What is the connection/access between the governing board and your organization’s senior leadership?
• Will your Junior Board have formal leadership roles? What will they be and how will you determine who fills them?
• How do opportunities rise for these roles?
• How will this engagement contribute to the growth and development of the young professionals who participate?

For more, including what you should consider and expect when starting a junior board, see the full report Nonprofit Junior Boards: The benefits of starting one.

How Many Is Too Many Committees? #NonprofitBoards

How many is too many nonprofit board Committees?  My usual answer: it depends particularly on the size of your board.  But a better answer to the question is that there should be as many committees as it takes to meet fiduciary obligations - duties of care, loyalty and obedience and fulfill responsibilities that include strategy, evaluation, policy (risk management), and yes, governance.  

I generally believe that these duties and responsibilities can be accomplished through two standing committees and multiple task forces (bodies created to achieve specific purposes).  These two committees would be finance (in and out) and governance.  Task Forces might focus on CEO performance and support; Program performance and support; and where appropriate, Facilities function and support.

That said, one university took it upon itself to reduce its board size from 15 committees (whew, imagine the staffing).  Read more here.

Temple trustees adopt revised structure to elevate strategic governance

Temple University Board of Trustees makes changes to align with goals for the future of learning and higher education.

The Board of Trustees at its meeting on July 12 adopted a revised committee structure for the governing body to support and facilitate its ability to provide strategic leadership for Temple’s future.

Following a comprehensive review of its governance structure and process over the past academic year, the board unanimously approved revisions in its bylaws that realign its committees to focus on strategic discussion of issues that arise in the key academic, student-focused and operational areas of the university. 

“We hired a president who is dynamic and forward-thinking about the future of higher education,” Board of Trustees Chair Mitchell L. Morgan said. “As the governing body of an institution seeking to be best in class, our board recognized that we must match that higher level of vision, and this action is part of the plan for how we are getting there.”

An ad hoc committee on Board Governance was charged with driving the self-evaluation process, with the assistance of Trower & Trower Inc. This nationally recognized firm provides governance consulting services to nonprofit organizations such as colleges, universities, hospitals and healthcare systems.

“Our sessions focused on governance, and specifically the strategic discussion of the big-picture issues that boards should be considering. From those conversations we moved to consideration of the kind of committees that will best utilize the experience, expertise and passion of board members, and channel it into energy, action and our shared commitment to excellence,” said Trustee Lon R. Greenberg, a business leader who has been at the helm of nine nonprofit and for-profit companies. 

In this realignment, the board reduced its 15 standing committees to seven groups: Academic Affairs, Student Success and Diversity; Compliance, Audit and Risk; Executive; Executive Compensation and Talent Management; External Affairs and Development; Finance and Investments; and Governance and Nominating.

“By bringing together related topic areas into a single committee, I believe we are enabling members of the board to have a wider, more cross-cutting view of important issues, and also keeping our focus on the top-level concerns where we can add the most value as a governing body,” Morgan said. “I am very proud that we went through this process and have made these forward-looking changes.” 

President Wingard agreed with Morgan that the revisions to the board’s structure would streamline the process of generating innovative ideas, bringing new insights to essential areas of growth. He said Temple has a strong governing body that possesses tremendous respect for the expertise of the university’s faculty and staff, as well as the tremendous learning potential of the Temple student community. 

“Today, our Board of Trustees undertook an ambitious action to bring fresh perspectives to our goals and this step will benefit our community for years to come,” Wingard said. “This restructuring positions our organizational strategy for best-in-class oversight of Temple’s future.” 

Cathy A. Trower, who assisted the board in its self-evaluation process, said the board’s actions indicate a healthy governance environment. She said that she was impressed by the willingness of Temple’s board members to undertake the effort and that many governing boards do not, because of the complexity of a comprehensive self-examination. 

Trower applauded the board for recognizing the need to lead change across the Temple community, its willingness to evaluate its skills and needs for the future, and for undertaking transformative action. “Today’s boards want to govern differently using strategic conversations,” Trower said. “Not everyone welcomes change, but this board had a willingness and an enthusiasm to do it. I see these changes as actions that translate into excellence in governance.”

— Deirdre C. Hopkins

NINO (Nonprofit In Name Only) #NonprofitBoards

Kudos to Joseph Flaherty for raising what I believe to be the correct questions about what makes a nonprofit, nonprofit.  In my view the answer is simple.  Nonprofits don't pay taxes; excess revenue either goes into current programming or reserves for future programming; and through a board, there is oversight and accountability to the public, particularly to donors.  As Mr. Flaherty points out, Grand Canyon University may not meet these criteria.  Read the full story to determine whether Grand Canyon isn't just a NINO - a nonprofit in name only.

https://www.phoenixnewtimes.com/news/nonprofit-grand-canyon-university-gcu-arizona-christian-10580235

'Nonprofit in Name Only:' Grand Canyon University's Conversion Criticized

JOSEPH FLAHERTY JULY 7, 2018 9:05AM

 

Two years ago, Grand Canyon University President Brian Mueller was fuming.

The for-profit university had been blocked by its accreditor after an attempt to convert to a nonprofit institution. A wounded Mueller ripped the Higher Learning Commission, saying the accreditor had “wronged” GCU and left the Christian school "extremely disrespected."

All that has changed.

On July 2, sporting a purple tie and in an ebullient mood, Mueller announced that GCU had officially executed the long-sought conversion to nonprofit status.

 

The university's academic assets were sold to a new, nonprofit entity for around $875 million on July 1. Meanwhile, the profit-seeking company that formerly owned the school, Grand Canyon Education, Inc., will handle campus operations like marketing and financial aid processing through a 15-year contract, in exchange for a hefty share of GCU's tuition revenue.

The deal is an audacious and eyebrow-raising victory for GCU. But for-profit critics are alarmed.

Experts say that GCU's conversion papers over contradictions in the institution's new split identity. They also criticize Mueller's dual roles of company CEO and university president.

“No other university in the country has its CEO working for its contractor and for itself,” said Robert Shireman, a former deputy undersecretary in the Obama administration’s Department of Education. He now works for the Century Foundation, a progressive think tank based in New York City.

Over the past decade, for-profit colleges have been investigated for predatory enrollment strategies that burned students and left them in a mountain of debt. These days, companies like GCU are changing their tactics, Shireman said.

“The wolves are putting on sheep’s clothing, and hoping that the rest of us will not notice," he said.

GCU has pursued explosive growth in ground enrollment and online students since 2004, when the school was the first nonprofit university in the country to convert into a for-profit company.

GCU's continued growth and steadily rising stock price has also meant a personal financial windfall for Mueller himself. The Chronicle of Higher Education reported on Monday that since January 2017, Mueller has made approximately $15 million from his sale of shares. The company trades as LOPE, a reference to GCU’s antelope mascot, on the NASDAQ stock exchange.

Mueller will take a 50 percent cut to his base annual salary under the new agreement, reducing his pay to $321,000 according to a financial filing.

In another gigantic financial advantage, GCU will no longer pay property taxes on its 275-acre campus, which has transformed the surrounding neighborhood in west Phoenix. GCE will continue to pay taxes on an office complex.

Mueller announced the deal in front of a crowd of GCU employees on Monday. Looking out over the sea of purple shirts, Mueller told them it was a momentous occasion as he recalled past milestones in GCU history.

Brian Mueller, GCU President and GCE CEO. 

Gage Skidmore/flickr

Southern Baptists founded the university in 1949 in Prescott and moved it to Phoenix two years later. In 2004, the university, deep in debt and about to close, was bought by investors and converted to a for-profit company. In 2008, the company went public and received a flood of investment dollars.

With the July 1 deal, Mueller suggested that GCU is making history again by reverting to a nonprofit.

A lot has changed since GCU was denied nonprofit status in 2016, including the shift to a new presidential administration that is unenthusiastic about policing for-profit colleges and universities.

In December, GCU submitted an application for nonprofit status to the regional accreditor, and in March the HLC signed off on the deal. The IRS approved the split, too.

During the nonprofit conversion, GCU sought to mimic a recent acquisition by Purdue University. The public university in Indiana bought the online programs of for-profit Kaplan University, spinning these programs off as a new, nonprofit arm of Purdue with the blessing of the HLC.

Mueller will continue to serve as the CEO and chairman of the board of the publicly traded company Grand Canyon Education Inc., which will serve as a campus operations company for GCU. Yet Mueller will remain the president of GCU, raising the hackles of for-profit university watchdogs.

"Such dual roles are permitted under guidelines adopted by the Higher Learning Commission," GCU said in a press release. "Aside from Mr. Mueller, no other employee of GCU or GCE has a dual role in both organizations."

GCU's nonprofit conversion is, in a word, unprecedented. It's also extremely complicated.

GCU, as the new, nonprofit school, will have to pay GCE, the for-profit service company, around $875 million via a seven-year loan in return for the institutional academic assets and property. GCE’s footprint will extend across campus, as the service company handles a long list of tasks for the nonprofit, from marketing to technology to counseling to financial aid processing. In exchange, 60 percent of the university's tuition and fee revenue will be paid to the company.

For all of his talk of historic dates, Mueller, in his speech on Monday, downplayed the uniqueness of the deal, arguing that universities have outsourced key functions for decades.

“This is very mainstream in higher education today,” Mueller told the crowd. “Hundreds of universities are doing it, and our model is almost an identical replica of that, so we’re in the mainstream of what’s happening.”

Others who follow higher education are skeptical.

Colleges and universities rely on outside contractors for minor campus tasks all the time. But Shireman argues that this conversion is extremely unusual because GCE is going to run a battery of campus operations for a single, all-important client: the newly nonprofit GCU.

“No nonprofit or public university operates that way except for GCU. GCU is not in the mainstream. It is completely different from other universities,” he said.

According to the statement, GCE expects to provide services to other colleges and even Christian high schools nationwide.

Shireman named two main reasons for GCU’s success at converting to a nonprofit on its second attempt — rule changes at the Higher Learning Commission, and a weakening of the IRS due to budget cuts, which he said is no longer able to adequately oversee nonprofit organizations.

Because of the conversion, the university will be able to avoid regulations on gainful employment and federal loans that apply to for-profit schools.

Even analysts who take a favorable view of the for-profit sector acknowledge that there are risks under GCU's new structure.

Trace Urdan, an analyst with Tyton Partners who's friendly to for-profit universities, said that GCU will face challenges regardless. GCE, as a for-profit company, will need to retain GCU as a primary, massive client in order to maintain its bottom line, he said.

“You’re trading one kind of risk for another,” Urdan said. When the contract between the two parties expires, another service-provider company might try to swoop in to serve GCU instead, he suggested.

Mueller downplayed this option on Monday likening the deal to a divorce during the Middle Ages. “There's no divorce possible here," Mueller said.

An executive who spent his career with the University of Phoenix’s parent company, Mueller eventually may have to face competition among other companies who want a share of the higher education service-provider dollars.

Success or failure will be on Mueller, Urdan explained.

“There’s a ton that’s tied up with Brian Mueller, all the way around,” Urdan said. “He’s sort of godlike inside that organization.”

 

Two separate boards will govern the company and the university. Each can select and fire the university's president and company's CEO. Nevertheless, both GCU's board of trustees and the corporate board tapped Mueller to maintain his leadership roles, he said.

Other experts are more blunt, arguing that Mueller’s role and the school’s new tax status contain glaring contradictions.

“This is an organization that is a nonprofit in name only,” said Brian Galle, a Georgetown University law professor who has scrutinized the GCU conversion.

Pointing to Mueller’s dual positions, Galle argues that his two roles are contradictory. “Each of those obliges him to serve a different set of constituents whose interests are not aligned,” he said.

Galle said that the split structure of GCU may prioritize profit over educational outcomes. The for-profit service provider and a highly influential Mueller will oversee much of campus life, Galle explained; when prospective students see GCU’s new nonprofit label, they may think they are enrolling in a certain kind of school even though the incentives of the old, for-profit institution haven’t changed.

“We have lots of evidence that consumers believe nonprofits act differently than for-profits,” Galle said. “We believe that nonprofits are not looking out for their bottom line — that they’re not going to cut quality to make money.”

GCU has aggressively refuted the idea that the nonprofit conversion is an end run around regulations enacted by the Obama administration to police the worst abuses of the for-profit sector. The university cites a low loan default rate of 6.2 percent for the most recent student cohort.

"The University supports measures that ensure educational institutions are meeting recognized standards — particularly as it relates to student support services, academic integrity and financial transparency — and believes those measures should apply to all institutions (for-profit and nonprofit)," GCU said in a press release.

Galle himself has received pushback from GCU over his analysis of the conversion. After Galle discussed GCU’s case in front of a Department of Education oversight committee on accreditors in May, GCU blasted Galle for “numerous material inaccuracies” and argued that his conclusions were drawn “out of whole cloth.”

For now, the conversion appears to be moving forward. The Department of Education did not respond to a pre-acquisition review of the deal, according to GCU's press release, but the university said that the department approves deals after they close. The department could choose to place regulatory restrictions on GCU under the new arrangement.

Approximately 1,400 faculty and academic staff now work for the nonprofit, along with “substantially all” of the 6,000 part-time, adjunct, and student employees, according to GCE’s corporate filing with the Securities and Exchange Commission.

The company's 2,600 full-time employees will continue to work from the company’s Phoenix office complex.

GCU went public in 2008, and at that time a group of former Apollo Education Group executives including Mueller carried out explosive enrollment growth, on campus and online.

But as Phoenix New Times reported last fall, some online GCU students feel dissatisfied with their program or misled based on the sales pitch they heard before they enrolled. Court documents and interviews with former enrollment employees described a quota-driven atmosphere to recruit new students.

The university expects to enroll almost 21,000 students on its ground campus this fall, eventually growing to 30,000. Mueller said that he expects the current online population of 70,000 students to swell to 100,000.

Another unknown aspect of the conversion is how GCU's institutional peers will respond.

There is a running feud between Mueller and Arizona State University President Michael Crow, who has criticized GCU’s entrée into NCAA Division 1 athletics. So far, the two universities have not met in D1 competition because ASU has refused to schedule games against the for-profit school located in its backyard.

In a statement to New Times, ASU recognized GCU’s emergence as "a nonprofit Christian college," and indicated that the two schools might collaborate.

A central pathway on GCU's Phoenix campus. 

Joseph Flaherty

“As each of us evolves, we see opportunities to work together across a spectrum of activities in academics and athletics,” the university's statement said. “What we’re most interested in is working together to ensure the success of the community more broadly. Arizona needs more high-quality college graduates, and we recognize the role GCU plays in contributing to our graduate pool and strengthening the Phoenix metropolitan area overall.”

In an email, GCU spokesperson Bob Romantic wrote, “We do not have any comment to the New Times.”

From Urdan’s perspective, the conversion is a major victory for GCU. The nonprofit label will invite more mainstream recognition, which will lead to more D1 athletic competition, which will help GCU recruit more students, and so on.

“They pulled it off, and it’s definitely a huge coup for them,” Urdan said.

Experts who are more skeptical of the for-profit landscape are disappointed by the development. They argued that the public might not know the scope of GCU’s historic switch until many years from now.

Shireman said that it took years before the titans of the for-profit college industry began to strain under bloated enrollments and the negative reputation about their sector. Financial pressure caused companies to make questionable decisions intended to spur growth.

The expansion tactics spiraled into predatory practices, Shireman said, frequently without the leaders of those institutions realizing what they had done.

"Usually by the time that evidence emerges, the problem has gotten out of control," he said.