Redirecting Boards: A New Vision of Governance

Redirecting Boards: Getting it Right Makes All the Difference in the World
Common Good Vermont
Webcast
March 8, 2011

“ Effective governance by the board of a nonprofit organization is a rare and unnatural act.”
- Chait, Taylor & Ryan, from: Governance as Leadership : Reframing the Work of
Nonprofit Boards

Boards are:
Awash in an endless stream of short-term matters and are not focused on the big goals, the basic values, the dreams;
Ineffective because the traditional things we ask boards to do are archaic, irrelevant and even if done well, often unnecessary; and
Lacking in the accountability to a bottom line that would focus their efforts.
- John Carver
Governance Consultant

Wrong-Headed Assumptions about the Roles of Boards

Dictionary Definition of Boards
A board of directors is an “organized body of administrators” who “supervise, control, or manage.”
This definition is archaic and an invitation for disaster.

To govern, not manage
Not to direct the work or make operational decisions (manage). Rather, governance is a separate process and a distinct part of leadership. Board governance relates to decisions that:
1) define expectations,
2) grant power, and
3) verify performance.

“ Ah, the temptation is great – but keep your hands out of the operation! Trustees are not to manage the institution, but to make certain that it is managed well.”
- Jerald Panas

If you don’t want board members involved in the daily business of the organization, why give them an invitation by reporting to them about daily activities?
- Anonymous Administrator

Shared Leadership
Executive staff manages, board governs – acting as a steward, trustee, and fiduciary

Steward
The board protects the assets (tangible, intangible) of the stakeholder (client, donor, funder, public) ownership

Trustee
Develops and monitors policies, sets a future strategic direction on behalf of the beneficiary – acts in the trust of the long-term public good.

Fiduciary
Protects the financial well-being and solvency of the nonprofit organization

A More Modern Way to Look at the Role of Boards
Steward
Trustee
Fiduciary
To govern, not manage
Shared leadership

What Must Boards DO? What legal duties must be followed?

Five Functions a Board Must Do
Plan STRATEGICALLY toward the future
ESTABLISH POLICY that guides the organization and articulates the values that form these future strategies
HIRE AND FIRE a CEO, evaluate, recognize/appreciate and support the executive
ADVOCATE for and champion the nonprofit’s cause
FUNDRAISE AND FRIEND-RAISE to ensure that the organization has enough discretionary private donations to be effective

Board and CEO Partnership: Sharing power, leadership and responsibility. . . Created through transparency and trust

“ Nonprofits waste uncounted hours debating who is superior and who is subordinate – board or executive officer. The answer is that they must be colleagues. Each has a different part to play. Their tasks are complementary. Thus, each has to ask, ‘What do I owe the other?’, not as board members and executive officers tend to do – ‘What does the other one owe me?’ The two have to work as one team of equals.”
- Peter Drucker

“ The relationship between the Board President and the Executive Director is one of responsible partnership. Like all human partnerships, this one has moments of tension and difficulty. Mutual trust, respect and courtesy will go a long way toward minimizing any difficulties that arise.”
-- Board Papers
PPFA Western Region

“ The president is not the executive director’s superior – that’s the entire board’s role. I think working partner is the way to view the relationship.”
- Anne Saunier, OD consultant

Ways to Make the CEO/Board Partnership Real
Partners in Leadership, Marlboro College, March 18 in Brattleboro . . . A day long workshop for Exec Directors and Board Chairs
Board Development and Education Retreat. . . Focusing on your organization’s governance practices and making them better
Untied Way’s offering board events, for example, in Brattleboro, helping people prepare for being board members
Books, webinars, BoardSource

Consultant Recommendation: Follow John Carver’s Commandments
Govern proactively by values, not reactively by event specifics.
Four key areas board should construct values:
ends
staff means
board-staff link
board process
Boards must spend most time on ENDS.
Board addresses STAFF MEANS by constraints only (e.g. go until we have said stop).

John Carver (cont.)
Board resolves issues with largest impact, CEO decides everything else.
CEO position exists to accomplish ENDS without violating STAFF MEANS.
Routinize evaluation of CEO on their performance against the ENDS goals and honoring of MEANS constraints.
Board agendas focus more on future than reviewing past and look outside organization more than inside

Ten Quick Ways to Improve Board Meetings
Nametags, name tents on table
Acronym chart posted in room
Write “anticipated action” for each agenda item
Everyone speaks at least once
No one-way communication from staff

Ten Quick Ways . . . (cont.)
Only include committee reports when they relate to board action items
Leadership – include a big picture or significant change at every meeting
Encourage dumb questions
Make sure room is comfortable and feed the troops
Adjourn on time or agree to stay later

Mixing the Agenda
Head/Heart items
Rotate discussion/debate/presentation
Remember whose meeting it is

Four Metals that Make for Better Board meetings
Golden Rule: keep meetings as informal as possible
Silver Lining : do not require unanimous decisions
Brass Ring : Run board meetings with common sense and good group process
Iron Glove : Avoid factions and personal politics

“ Selected objectives for the ideal board member: know why the organization exists, and annually review why it should; give money, or help get it, or both; face budgets with courage, endowments with doubt, deficits with dismay and recover quickly from a surplus; interpret the organization’s work to the public and words syllables; combine a New England sense of obligation with an Irish sense of humor.”
- Michael Davis
Rosewald Fund

Jim LeFevre www.LeFevreAssociates.com email: [email_address] Phone: 802-922-8659

Redirecting Boards: A New Vision of Governance

by Lauren-Glenn Davitian on Mar 08, 2011

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Redirecting Boards: A New Vision of Governance — Presentation Transcript