Amy MeginnesBoard ChairpersonThe role of a board

Amy Meginnes
Board Chairperson
The role of a board
The Team
The Board
The role of a board
Protection
Trust
Connection
Tone
The role of a board
Strategic direction
On the ground support
(if/when needed)

Funding, expertise, and
connections
Vision for impact
Evolving the Mission
2010
Pangea
Educational
Development
founded
2011 - 14
Build learning
capacity
2015 - 2016
Quality of
education
2017-18
Foundational
learning skill:
Literacy (access,
representation,
instruction)
2019
Operational
stabilization and
key program
program expansion

2020
Current:
Reacting to the
educational need
of COVID-19
Leading through Change
Know your natural tendencies
Start with your strengths
Task Emphasis
Pe
op
le
E
m
ph
as
is Transformational
Laissez-faire
Democratic
Autocratic

Leading through Change
Understand your starting point
• Take 3 minutes individually and write
where you think you would fall
• Consider your strengths
o Are you incredibly organized?
o Like leading meetings?
o Love public speaking?
o Amazing at getting things done?
o Build trust with others easily?
• Share with your group
o How are styles different?
o How might you have to stretch or lean on
members of your team in different
scenarios?
• One individual will share what you
discussed as a group
Task Emphasis
Pe
op
le
E
m
ph

as
is
Laissez-faire Autocratic
Transformational Democratic
2020
Staff
Orientation Guide
WELCOME!
Our mission is to empower individuals and communities to
fulfill their own
purpose and potential by fostering cultures of literacy
OUR MISSION
We are a community of changemakers who believe all people
have the ability
to learn and grow to their full potential. We are working to
build a culture of
learning that equips every person to be a change agent in their
own story and
community.
Through education, we are making a deliberate, sustainable, and
substantial

impact on the structural inequalities in our world, while treating
each person
as more than a number. We believe in authentic interactions
grounded in
mutual respect and a commitment to helping everyone fully
realize their
potential and inspire action beyond our efforts.
The PANGEA Manifesto
The problem
At PANGEA, we focus on educational development and
empowerment through literacy. Our approach to literacy
development requires a focus within and across each sphere of a
child’s life: in school, at home, and in the community.
At PANGEA, we focus on educational development and
empowerment through literacy. Our approach to literacy
development requires a focus within and across each sphere of a
child’s life: in school, at home, and in the community.
The root of the issue PANGEA’s approach
ACCESS TO
MATERIALS
PUBLISHING
ECONOMY
PARENT
EDUCATION

QUALITY OF
TEACHERS
Most children don’t have
a single book at home
Most (if any) available books
aren’t culturally
representative
A literate parent rarely
raises an illiterate child
Avg classroom sizes are
over 50 students – that’s
asking a lot of a single
instructor
Our programs work to address 4 key areas of
literacy development through three programs.
Capturing and creating
culturally relevant children’s
books from Ugandan folklore
Improving bilingual
literacy instruction
in the classroom
Using bicycles and
moto-bikes for a weekly
service delivering books in
rural communities

We are changing the
story of world literacy
How they work
Next Steps
Wide Range
We employ 8 Mobile Librarians around
Uganda to deliver books in three regions
around Uganda: Kampala, Gulu, Imvepi
Refugee Settlement
Netflix of Books
A book subscription service intended to
lower the cost of book access. These
started by delivering directly to homes and
now distribute through schools.
Mobile
Libraries
Model Shift
These started by delivering directly to
homes and now distribute through schools
increase number served and support in
class learning.

Model Shift
These started by delivering directly to
homes and now distribute through schools.
Only edu operating during COVID
Our Mobile Libraries are the only education
program running across any of Uganda’s
refugee settlements totalling 1 million
people during COVID-19.
High Impact
Last year we checked out over 248,000
books alone. This year we are projected to
distribute nearly 1 million.
Collect stories
We employ 8 story collectors from around
Uganda to gather traditional folklore to be
turned into children’s books. We have
collected 152 stories across XX languages.
Translate and Illustrate
Each book is printed with both the
mother-tongue language it was originally
collected and English to simultaneously
preserve and expand the culture’s reach. We
have 24 books currently in distribution in

Uganda and 5 for sale in the US.
Distribute in local communities
The Pangea Publishing mobile libraries
distribute these culturally relevant books
alongside donated books to rural communities
providing weekly access to new reading
material.
Sell around the world
It’s not only important that local readers can see
themselves in books as they learn to read, but also for
readers around the world to have a window into the
unique culture and traditions that have been out of
sight until now.
Extend the impact
Each book sale allows one family in a local
community to subscribe to the mobile library for
one year at a price they can afford. It also enables
increased story collection, illustration, and greater
distribution through the hiring of more mobile
librarians.
How it
works…
Oral Folklore

New Styles
Issue Books Myths
LegendsLifeskills
Student WrittenTotems
Famous Figures
Cultural Modernity
Diverse Identities
We are changing the
We are changing the
Making Classroom Learning Meaningful
Next Steps
Comprehensive
We do not take the any shortcuts to
behavior change. Our program is run over 8
models throughout a 10 month period.
Literacy Focused
Our program is explicitly focused on early
grade literacy instruction. This means a

primary focus on nursery through third
grade where the foundation of reading and
learning is established
Literacy Instruction
Training (LIT)
Model Evolution
We are experimenting with various forms
of teacher training models that are more
efficient in order to serve more teachers
without sacrificing quality.
Student Centered
While the program is technically focused
on literacy, we utilize the topic to integrate
larger picture best learning practices.
Getting out of rows and on our feet to learn
Practical
Half of the time we spend training takes
place in the classrooms of teachers
themselves. We focus more on coaching
and collaborating than teaching others in
theory only.
A brief timeline

2011
Pangea
Educational
Development
founded
2012 - 14
Focus on
foundational
capacity in partner
schools (physical
space to learn,
safety, financially
sustainable school)
2015
Shift away from
primarily
volunteer-based
involvement
2016
Increased
emphasis on
teacher
effectiveness
and community
involvement
2017
Focus shifts to
literacy with
mobile library
efforts and story
collection for
Pangea Publishing

2018
US Launch of
Pangea Publishing
(Kickstarter + first
books available)
2019
Operational goals
shift from program
expansion to securing
financials, including
evaluating our
business model and
potential new
revenue streams
through publisher
conversations
Board of Directors
STEPHEN R. BLOCK
p
eople vested with the legal responsibility
to govern and control the affairs of orga-
nizations. Accountability for any non-
profit organization ultimately rests with its
board of directors (sometimes called board of
trustees). Although the board may delegate man-
agement authority to a paid staff person, known

as the executive director, the board can never be
relieved of its legal and fiduciary responsibilities.
Governing board members are stewards of the
public interest and have a burden of responsibil-
ity to use and preserve the organization's assets
for advancing a beneficial mission.
Board membership is an admirable act of citi-
zenship for those who are willing to accept a sig-
nificant amount of volunteering. These special
people are generally not compensated for their
board service, and they must balance their board
obligations with personal demands of work,
family responsibilities, and other community
activities. This commitment to community ser-
vice is tied to a long history of voluntary action,
with roots that precede the founding of the
United States. The innate desire to help is said to
be a unique quality in America, a democratic at-
tribute that influences the modern nonprofit
board of directors.
Because of the board's legal responsibilities,
personal limitations on directors' time, and the
daily involvement of the executive director, there
is often confusion between the board and staff
over roles, responsibilities, turf, and expecta-
tions for performance. The board and executive
director must clearly understand their mutual
expectations if they are to develop a healthy gov-
erning body.
Why Have a Board?
Of the many reasons for having a board of direc-

tors, legal necessity is primary. In some states,
only one board member is required for incorpo-
rating an organization, but most states require at
least three or more individuals to serve as direc-
tors of a governing board. The Internal Revenue
Service also requires nonprofit organizations
seeking or maintaining recognition for tax-
exempt purposes to have governing hoards of
directors. Members of governing boards are ex-
pected to engage willingly in board activities,
without receiving any benefit of the organiza-
tion's assets or earnings.
Aside from the legal necessities, the most
practical reasons for having a board of directors
are to ensure that the organization is effectively
managed and is working toward the achieve-
ment of a mission that has a public purpose. Few
I / Vic Murray
tensity of Gov-
t Management
0: 203-2 6.
rganizations: A
, NJ: Prentice-
ing of Organi-
tegic Planning.
luating the Ef-
ions." In R. D.
gook of Non-
San Francisco:

itrategic Man-
Drganiza tions.
Government.
coming. "Ra-
nes on When
of Fundees.”
terly.
Newcomer,
gram EvaIna-
^ CHAPTER 2
15
16 2 / Stephen R. Block
nonprofit organizations have the resources to
employ the personnel with the expertise that is
necessary to accomplish their organizational ac-
tivities. The collective wisdom of the board of
directors can serve as a bank of skilled and
knowledgeable resources to provide support, ad-
vice, and counsel. It has been widely proposed
that board members should comprise the three
Ws; individuals who are willing to "work," some
with "wisdom," and others with "wealth."
Why Would Someone Want to
Serve on a Board?
Each person has his or her own reason for vol-

untary board service; however, one of the most
often-stated is to serve one's community. Volun-
teering as a board member is an honor and a
fundamental privilege of a free people.
There are many reasons for joining or for
staying on a board. For example, board partici-
pation may be an expectation of one's employer.
It may provide an opportunity for gaining or
maintaining social status in the community, sat-
isfy socializing needs, lead to new knowledge
and skills, and enhance one's résumé. For some
people, voluntary board service satisfies reli-
gious convictions based on a belief in the orga-
nization's cause or mission; or is based on per-
sonal experience of a problem (such as a disease
or tragedy) that is addressed by the work and
mission of the organization.
The Board's Relationship with
Its Executive Director
Various authors have described their ideas about
the ideal working relationship between the board
and executive director. Two governance models
prevail. One model builds on the traditional view
that the executive director is employed as a sub-
ordinate to the board. The working relationship
is characterized by distinct and separate roles for
the board and executive director, with the board
directing, supervising, and limiting the director's
activities as the board sees fit.
The other governance model builds on ideas
of partnership and collegiality between the exec-

utive director and board of directors. This model
acknowledges that the board of directors has
clearly defined legal responsibilities. However,
the model differs from traditional approaches in
a fundamental way: The executive director takes
an active role in assisting with or coordinating
the participation of board members in fulfilling
their governance commitment. This form of
board management makes full use of the execu-
tive director's distinctive management and lead-
ership skills. Consequently, the quality of the
board's performance is a direct result of the exec-
utive director's ability to steer and promote pro-
ductive interaction among board members. The
executive director can call upon board managers
to intervene when necessary in either the internal
or external environment of the organization.
Who Is in Charge of
Making Policy?
Prescriptions for effective board practice often
state that the board is legally responsible for
making policy and the staff is responsible for
carrying it out. Though this division of labor is
technically correct, it is inaccurate in its practice.
The staffs of nonprofit organizations have a sig-
nificant level of influence on the creation of pol-
icy. Since they are closest to the operations and
programs of the agency, they may know when a
new policy would provide the guidance needed
to get the job done. Thus, staff input is almost
always required to create new policies. In addi-
tion, the staff often shapes the policy by drafting
proposed policy statements.

In effective nonprofit organizations, the staff's
point of view on matters of policy development
is considered an integral part of governance. Of-
ten, effective organizations are those in which
the board adopts policy with input of the staff,
and the staff implement policy with the advice,
counsel, and support of the board.
What Are the Major Areas of
Board Responsibility?
There are at least nine major areas of board re-
sponsibility; namely, to
Stephen R. Block
rs. This model
directors has
es. However,
approaches in
director takes
coordinating
rs in fulfilling
his form of
of the execu-
ent and lead-
quality of the
t of the exec-
promote pro-
members. The

and managers
er the internal
anization.
Board of Directors 17
determine the organization's mission;
set policies and adopt plans for the organiza-
tion's operations;
approve the budget, establish fiscal policies and
financial controls, and monitor financial posi-
tion of the organization;
provide adequate resources for the organiza-
tion through establishment of resource-devel-
opment goals and commitment to fund-raising
through giving and soliciting;
develop organizational visibility through net-
working and linkage to the community;
ensure that the organization's corporate and
governance documents are updated and se-
cured, and all reports are filed as required;
recruit and select new board members and
provide them with an orientation to the
board's business;
recruit, hire, evaluate, reward, or terminate, if
necessary, the executive director of the organi-
zation; and
9. protect and preserve the organization's non-
profit tax-exempt status.
work of the board and evaluating the board's
performance. The chair presides at and calls spe-
cial meetings of the board and sets the direction
for organizational goal setting. This volunteer
position requires a great deal of time commit-

ment and responsibility.
Vice-President
In the absence of the volunteer president, the
vice-president usually assumes the duties of
president and the responsibility for chairing
board meetings. Often, the role of vice-president
entails chairing a major committee of the board.
In some Organizations, the vice-president auto-
matically becomes president-elect, a succession
plan that may not be effective in all organiza-
tions.
practice often
sponsible for
esponsible for
ion of labor is
in its practice.
Ions have a sig-
breation of pol-
operations and
'r know when a
iidance needed
input is almost
ilicies. In addi-
licy by drafting
The Role of Board Officers
The officers of the board of directors have a re-
sponsibility to set the tone for organizational
leadership. The duties of the president (chair-
person), vice-president, treasurer, and secretary
are described in the organization's bylaws.

ions, the staff's
y development
overnance. Of-
hose in which
ut of the staff,
rith the advice,
I.
Secretary
The board secretary has the obligation to protect
the organization's corporate documents, such as
the bylaws, the articles of incorporation, board
and committee minutes, and important corre-
spondence.
Many individuals try to avoid election to the
office of secretary because of the myth that the
board secretary must take the minutes of the
board and executive committee meetings. The
board secretary does not have to write the min-
utes, but he or she is responsible for ensuring
that the minutes are taken and accurately reflect
the business meetings of the board and executive
committee. Upon becoming official annals of
the organization, the board minutes should be
signed and dated by the board secretary. In orga-
nizations that rely on parliamentary rules and
procedures (such as Robert's Rules of Order,
Newly Revised), the board secretary is required
to become familiar with the meeting procedures
and may have to make procedural rulings.
Treasurer
as of

is of board re-
President
In most nonprofit organizations the title and
position of president refers to the highest level
volunteer who also serves as chairperson of the
organization. However, in some nonprofit orga-
nizations a corporate model of governance is
followed, therefore, the title of "president" re-
places the more commonly used title of "execu-
tive director." If the president is also the paid
chief executive, the position usually allows for
participation as a board member. In this in-
stance, the role of chairperson is handled by the
chief volunteer.
The volunteer president or chairperson is re-
sponsible for the activities of the board and for
assigning board committee chairs, unless assign-
ments are automatically spelled out in the by-
laws. The chair is responsible for monitoring the
The treasurer should not be expected to do the
bookkeeping and accounting for the organiza-
tion. Instead, the treasurer is responsible for
making sure that the organization's finances are
properly accounted for and excess revenues are
1 8 2 / Stephen R. Block
wisely invested. If a finance committee exists, the
treasurer often serves as its chairperson. On be-
half of the board, the treasurer ensures that fi-
nancial controls are in place and tested on a pe-

riodic basis. The treasurer also participates in
the selection and recommendation of an audit-
ing firm. The treasurer reports on the financial
statements at board meetings, executive com-
mittee meetings, and, if applicable, at annual
meetings of the organization.
The Board's Role in
Fund-Raising
The board must play a fundamental role in rais-
ing money and resources. Board members also
have the personal responsibility of making fi-
nancial contributions in addition to giving their
voluntary time to the organization. Instituting a
policy that requires board members to con-
tribute is sometimes employed.
Unanimous giving among the board sets the
right tone for fund-raising. It enhances the cred-
ibility of the organization when it seeks contri-
butions from others. Unanimous-board-giving
practices have even become an expectation
among many funders.
Giving is only one part of the board member's
obligation; the other part is to assist in planning
and solicitation activities. Collectively, the board
can identify a pool of potential contributors.
Friends, business associates, relatives, and ven-
dors are among likely prospects. Some board
members shy away from verbally asking for
money, but they may be able to write letters or at
least sign letters that have been drafted for them
by staff.

Board Composition
Determining the composition of a board of di-
rectors is claimed by some to be a blend of sci-
ence and art.
Board composition should not be the result of
opening the door to just anyone who is willing
to serve but should result from purposeful re-
cruitment strategies. Prospective board mem-
hers, for example, should be familiarized with
the organization's purpose, mission, vision,
goals, and objectives, as well as board duties, re-
sponsibilities, and the organization's expecta-
tions.
The task of filling vacancies on the board
should be approached carefully and should result
in a board composition that is able to advance the
organization's mission. There are two prepara-
tory steps to actively recruiting the right person.
The initial step is to acknowledge that organiza-
tions go through different stages of development
similar to the various life cycles experienced by
individuals. Various maturational stages lead to
differing organizational issues and needs. Assess-
ing which phase an organization is in is useful
not only to prepare the organization for change
but also to determine the leadership qualities re-
quired of potential board members. Matching an
organization's life cycle to the requisite skills of a
board member could lead to more effective and
purposeful organizational outcomes.
A second step is to conduct a thorough demo-

graphic inventory of board composition, which
will reveal the board's weakest representational
areas. Inventory results will show a composi-
tional balance or imbalance in such variables as
gender, age range, ethnicity, socioeconomic sta-
tus, political party affiliation, educational level,
professional or vocational interests, knowledge
of consumer issues, and location of primary res-
idence. Information of this type can be valuable
to organizations especially seeking to create a di-
verse board.
As suggested, the composition of a board can
contribute to the level of ease or difficulty with
which an organization is governed and man-
aged. A board composed of individuals with
similar socioeconomic backgrounds or other fa-
miliar traits may reach consensus more often,
but it is less likely to formulate challenging ideas
or seek out policy reforms. Compared to homo-
geneous hoards, those that reflect diversity
among their members are likely to experience
greater participatory challenges. Even though di-
versity is an enriching quality in a board, its
members must contend with differing values,
mores, and interpretations of community infor-
mation and beliefs.
The Executive Director as
Board Member
Some nonprofit organizations use a corporate

model of governance structure in which the po-
sition of executive director is transformed from
staff to member of the board as its president-
chief executive officer (CEO).
The model of corporate governance may not
be an appropriate structure for all nonprofit or-
ganizations. It is used by larger and more com-
plex institutions that rely on a strong CEO. Re-
gardless of size, the CEO as staff and board
member must be wary of conflicts of interest
and must avoid participating in discussions or
decisionmaking that will lead to personal bene-
fits. Critics of nonprofit organizations using cor-
porate models suggest that the CEOs have no
choice but to use the knowledge they have ac-
quired in managing the day-to-day operations.
This knowledge is often used to influence the di-
rection of the board and organization.
There is a dearth of comparative research on the
benefits and disadvantages of corporate models as
compared to traditional models in use by non-
profit organizations. Consequently, it is impossible
to suggest that any one model will lead to success.
Board Recruitment and
Orientation
Preconditions of board recruitment include
identifying the governance needs of organiza-
tions in (life cycle) transition and discovering the
characteristics and qualities to be found in new
board members. There are many variables to
consider in sizing up a board prospect, including:

I. an individual's ability to create a vision, prob-
lem-solve, and facilitate conflict resolution;
an individual's commitment of time to partici-
pate fully;
enthusiasm for the organization's mission, vi-
sion, goals, and values;
a person's skills and experience in such areas as
public policy analysis and fund-raising, or ex-
pertise in program service delivery; and
diversity factors.
Once a profile is developed that describes the
ideal board member, the recruitment task can
formally begin. On the basis of expediency, many
nonprofit organizations make the mistake of ig-
noring the profile and recruiting the friends of
board members. Sometimes, individuals are in-
vited to become prospective board members for
the simple reason that they are alive and seem
agreeable to serving! Serious problems may occur
when attempts have not been made to match the
needs of the organization with the ideal board
member. Locating someone who matches the
profile and agrees to serve, however, is not a guar-
antee of board success. In fact, most governance
problems seem to stem from the recruitment
process. Though using a profile can increase the
likelihood of finding the right person, a perfect
match does not guarantee that problems will not
arise, such as., nonattendance at board meetings,
lack of participation in board committees, an un-
willingness to contribute financially, or interfer-
ing or trying to micromanage the day-to-day op-
erations of the organization.
Finding a board prospect who fits the profile

is, indeed, a critical part of the assignment, as is
fully informing the prospect about specific
board duties. The lack of knowledge about the
expectations for board member role and gover-
nance responsibilities will directly contribute to
organizational confusion, ineffectiveness, and a
breach in a board member's commitment. Since
each organization's board of directors has a dif-
ferent mission and focus for its work, even the
seasoned board member who joins a new board
should receive a briefing on the organization, its
expectations of board members, and board re-
sponsibilities. It is imperative to sqek an agree-
ment to serve only after the board prospect un-
derstands the parameters of Iloard service.
Organizations sometimes give prospects a
board-prospecting packet, which may contain
some or all of the following: a history of the or-
ganization; board job-descriptions; a copy of the
articles of incorporation and bylaws; a copy of
the organization's purpose or mission statement;
an organizational chart; and a description of
program services, with a list of committees and
duties of each. This packet may also include a
roster of the current board, with work affilia-
/ Stephen R. Block
miliarized with
nssion, vision,
loard duties, re-
ttion's expecta-
on the board
ad should result

e to advance the
e two prepara-
te right person.
; that organiza-
if development
experienced by
I stages lead to
needs. Assess-
is in is useful
ion for change
ip qualities re-
s. Matching an
isite skills of a
e effective and
:s.
irough demo-
)sition, which
nesentational
v a composi-
h variables as
;conomic sta-
:ational level,
s, knowledge
'primary res-
n be valuable
:o create a di-
a board can
ifficulty with
d and man-
riduals with
or other fa-
more often,
enging ideas

id to homo-
ct diversity
experience
I though di-
t board, its
'ing values,
anity infor-
tions, addresses, and phone numbers; dates of
future meetings and special events; an annual re-
port and organization brochures, newsletters, or
related materials; and a copy of a recent audi-
tor's financial report, annual budget, and finan-
cial statements.
It may also be helpful for the organization's
board to assign a veteran member to assist the
prospect in "learning the ropes." The availability
of a support person may encourage the board
prospect to join a concerned board of directors.
The veteran could serve as a resource person
during the recruitment phase and then as a
mentor or helper during the transition period
following induction.
How Many Board Members?
There is no formula for determining the appro-
priate size of an organization's board of direc-
tors. The size of the board must be tailored to
suit the needs of the organization.

One helpful way to determine board size is an
organizational life-cycle analysis, referred to pre-
viously as a pre-requisite to board recruitment.
Organizations and their boards experience vari-
ous developmental stages, all of which can influ-
ence the number and type of skilled board
members that are needed.
Large- and small-sized boards have both ad-
vantages and disadvantages. The number of
people on a board can be a factor that influences
how board members comport themselves. Large
boards are generally unwieldy because it is diffi-
cult to pay attention to so many people. Because
the larger group will find it more difficult to be-
come cohesive and familiar with the cohort, it
may tend to be more formal in its board conduct
and meetings. Organizations that are just start-
ing out, or those in need of a boost in financial
resources, may be better served by a larger board
of 20 to 25 individuals. In this case, the larger the
number of board members the greater the
chances of reaching out to potential donors.
On one hand, smaller boards are limited in
accomplishing supportive activities such as
fund-raising. On the other hand, a smaller
group may have to rely on its creativity, such as
developing a fund-raising plan for implementa-
tion by a committee of staff, board members,
and other community volunteers. Organizations
that do not rely heavily on the board alone for
fund-raising or other supportive activities might
be better served by a board of no more than ten

members. The smaller group would have more
of an opportunity to become cohesive; learn ex-
perientially how to mesh effectively their collec-
tive wisdom, advice, and counsel; reach deci-
sions through consensus; and it would have no
need to use controlling, parliamentary proce-
dures for conducting board meetings.
Board Liability
Though nonprofit boards of directors are infre-
quently sued, the risk of liability is nevertheless a
legitimate concern for volunteer board mem-
bers. Financial losses associated with a lawsuit
can be devastating to an organization and its
board members. The quality and manner in
which boards make decisions or fail to make de-
cisions can result in a legal challenge that tests
whether they have met or failed in their respon-
sibilities as stewards of public interest.
Board members and prospective members are
often comforted by the knowledge that the non-
profit organization has purchased a director's
and officers' (D&O) liability insurance policy.
Concerns about lawsuits have caused a rising de-
mand for this type of insurance, and conse-
quently, premium costs vary widely.
A factor that affects the cost of D&O insur-
ance is the nature of the organization's work,
whether it is, for example, a direct service health
care agency or an organization that promotes
the arts. Features and exclusions may also differ
greatly from one policy to another and affect the
price and value of the policy.

Indemnification refers to the organization en-
suring that it will pay the reasonable costs asso-
ciated with liability suits, such as judgments and
settlements against its board members. This
practice is sometimes compelled by state law. In
other situations it may be an optional practice of
the board. In either event, the organization's by-
laws outline the extent of indemnification. In-
2 / Stephen R. Block
For implementa-
mard members,
s. Organizations
board alone for
activities might
o more than ten
ould have more
hesive; learn ex-
rely their collec-
sel; reach deci-
would have no
nentary pro ce-
ings.
.ctors are infre-
s nevertheless a
r board mem-
with a lawsuit
ization and its
rid manner in
all to make de-

enge that tests
ri their respon-
hest.
members are II
that the non- ;
d a director's ,t
rance policy. ''
a rising de-
, and conse-
.
D&O insur-
tion's work„'
ervice health
at promotes
sy also differ
Ind affect the
Inization en-
costs asso-
iments and
nbers. This
Rate law. In
I practice of
ration's by-
cation. In-
demnification cannot, however, be exercised
when the organization brings a suit against its
own board members. In practice, indemnifica-
tion is a form of self-insurance and assumes that
the organization has the funds to pay legal costs.

Given the resources of some nonprofit organiza-
tions, this assumption may not be valid.
In addition to indemnification and D&O lia-
bility insurance coverage, a board of directors
can purchase various liability insurance policies,
including, but not limited to, the following spe-
cialty policies: general liability, employees' liabil -
ity, malpractice, automobile, and fiduciary.
To encourage board and other voluntary ser-
vice in community organizations, all 50 states
have passed volunteer protection laws. The ex-
tent of protection varies among the states, and
this form of legislation has largely been untested
in the courts.
Volunteer protection laws and the varieties of
liability insurance premiums are not the only
ways boards can protect themselves. The most
effective form of protection is limiting risk by
adhering to effective governance practices. There
are three standards of conduct that should guide
the board member, as follows:
Duty of care: imposes an obligation that all board
members discharge their duties with the care
that an ordinarily prudent person would exercise
under similar circumstances. This includes being
diligent, attending meetings, and becoming ac-
quainted with issues before reaching a decision.
Duty of loyalty: requires that each board mem-
ber act primarily in the best interest of the or-
ganization and not in his or her own personal
best interest or in the interest of individuals at
the expense of the organization.

Duty of obedience: imposes an obligation that
board members will act in conformity with all
laws in addition to acting in accordance with
the organization's mission.
For the voluntary members of hoards of di-
rectors, acting prudently, lawfully, and in the
best interests of the organization can, in part, be
achieved by adhering to the following six re-
sponsible board practices:
1. Becoming an active board member. Board mem-
bers who are familiar with the organization's
mission and purpose are generally able to make
better decisions for the organization. Members
may wish to review the mission annually to
serve as a reminder that the board uses the mis-
sion statement as its guide in decisionmaking.
Attending all meetings. Being absent from
meetings will not necessarily excuse a board
member from responsibilities for decisions
reached by those in attendance. In fact, a mem-
ber's absence from meetings increases potential
risks for the entire board because it is making
decisions without the benefit of the views of all
of its members.
Insisting on having sound financial management
tools and control systems. Board members need
to learn how to read and use financial state-
ments and audit reports to understand and
monitor the organization's fiscal health. They
also need to understand that their decisions
have a financial impact on the organization.
Speaking up. Members should not remain
silent when they disagree with a decision or an

opinion expressed by others. Additionally,
board members should ask questions when the
organization's goals and objectives are not be-
ing met.
Identifying conflicts of interest. Board members
need to avoid participating in discussions or
decisionmaking when they have conflicts of in-
terest. Even the perception of a conflict of in-
terest must be avoided, if possible. If they are
faced with an actual conflict or even the per-
ception of one, board members must inform
the other directors of the situation and excuse
themselves from participation in related areas
of decisionmaking or transactions.
6. Staffing. In addition to its having personnel
policy guidelines for the executive director, the
hoard must be certain that these personnel
policies are adequate and updated to reflect all
applicable mandates of law.
In summary, minimizing the risk of hoard lia-
bility requires an active and involved board of
directors.
Dismissal of Board Members
Terminating a member from the board of direc-
tors for nonattendance at board meetings or lack
of follow through on assignments that are
required for the board's decisionmaking pur-

poses, for example, is a delicate procedure. Un-
fortunately, there are times when it becomes
necessary to discharge board members because
their actions create liability risks.
The chairperson of the board has the respon-
sibility to request resignations from board mem-
bers. The executive director plays a supportive
role to the board chair and board member in
what for all can be emotionally trying and em-
barrassing.
Confidence and sensitivity should be used
when approaching the board member with the
idea of resignation. A board member should be
given every consideration to effect a smooth de-
parture. Ultimately, the member's "saving face"
is important for maintaining relationships at
this level of community involvement.
To prevent the need for board dismissals or to
support the actions of the board chair when a
dismissal is called for, the board should adopt a
principle stating that its work and organiza-
tional mission are too important to allow for
unnecessary liability risks associated with un-
committed hoard members. The board can do
some prevention work by adopting a bylaw pas-
sage and job description that reflect standards
for board member conduct and participation.
Of course, some organizations have rules of this
type but choose not to enforce them. For a
member to violate or ignore such bylaw provi-
sions suggests poor judgment and raises the lia-
bility risks of the board.

How Often Should the
Board Meet?
A board is generally required to meet at least
once a year. In practice, some hold meetings
once a month, every other month, or once each
calendar quarter. Frequency of board meetings
and the duration of each meeting should reflect
the culture of the organization and the type of
strategic issues requiring board attention. Deal-
ing with planning and policy issues, threats of
litigation or bad publicity, and concerns of fi-
nancial obligations are reasons for a board to
meet more frequently. Organizations that are
new in their development, or in process of man-
aging significant changes, as compared with an
organization in a steady state, would also benefit
from meeting more frequently.
Effective meetings are focused, to the point,
and stick to the agenda. Meetings can be effec-
tive when board members come prepared, hav-
ing studied the agenda and the issues prior to
the meeting. The agenda should be mailed out at
least a week to ten days in advance. Agenda items
should be allocated realistic time frames for dis-
cussion and taking action, in addition to time
designated for the routine review of minutes, fi-
nancial reports, and progress reports on the im-
plementation of the organization's strategic
plans.
Newly identified obstacles are not always
solved during board meetings. Instead of react-
ing to unfinished issues and business with more

board meetings, attempts should first be made
to streamline the review of issues by assigning
the task to an appropriate standing or ad hoc
committee. In this way, the committees can try
to remedy issues or bring their findings and rec-
ommendations back to the board or executive
committee without monopolizing the board's
time and agenda.
How Long Should a Board
Member Serve?
The solution to a member's length of service
that is practiced by many organizations is to
stagger the expiring terms of office. Rotations of
three-year terms, for example, would mean that
each member serves for three years, but, at the
end of each year, obligations would end for one-
third of the members. This system gives the
board ample time to evaluate the performance
of board members, to determine whether they
should be invited back for another term. Addi-
tionally, the experience base accumulated by
outgoing board members is information these
members use to decide whether they would like
to be reelected for another three-year term.
Sonic organizations also place a limit on the
number of consecutive terms a person may
serve. After reaching the maximum number of
consecutive terms of service, the board member

would automatically leave the board. A board
member who rotated off could be elected again
after a year or more, when consecutive service
would not be an issue. After reaching the allow-
able service limit, an individual could also con-
tinue to support the organization's cause in
some other capacity, such as on a committee or
advisory board.
It is important that all board member terms
do not expire at the same time. Without some
overlapping representation from members of
the board, the organization would lose its im-
portant history and continuity of policy devel-
opment and strategic direction. Veteran board
members bring a maturity and depth of under-
standing about the issues the organization faces,
and when the board adds a group of newer
members it brings enthusiasm and fresh ideas to
the board's governing role.
How Are Governing Boards,
Advisory Boards, and
Honorary Boards Different?
When one is referring to the term "board of di-
rectors"ectors" or "board of trustees," the reference is to
a governing board, a grouping of individuals who
have assumed a legal responsibility for an orga-
,. .nization's existence. These people make policy
and are responsible for how money is generated
and spent, toward the accomplishment of a mis-
sion that can be beneficial to the general public
or to a segment of the population.

Advisory boards, however, do not bear the legal
burdens of governing boards. An advisory board
exists to assist the governing board or the execu-
' tive director in examining issues and recommen-
' dations. Recommendations that result from the
work of an advisory board do not have to be ac-
cepted or followed by the governing board.
Honorary boards are usually composed of in-
dividuals who are well-known because of some
measure of celebrity or prominence in the com-
munity. Honorary boards do not necessarily
meet. In fact, some individuals agree to serve as
honorary members because they do not have the
time or inclination to attend meetings. Individu-
als serving in this honorary capacity lend credi-
bility to an organization by allowing the use of
their prominent names in brochures and on
letterheads.
Sometimes, members of honorary boards and
advisory boards are enlisted to assist in organi-
zational fund-raising activities. The visibility
and credibility of the honorary or advisory
member sends a signal to the community that
the organization is worthy of financial support.
Types of Committees
Committees are categorized as either standing
committees or ad hoc committees. Ad hoc (or
special) committees, on one hand, have a life-
span equal to the completion of the committee's
assignment. Standing committees, on the other

hand, are part of the permanent governance
structure of an organization with duties and re-
sponsibilities described in bylaws. Standing
committees may include executive, finance, by-
laws, fund-raising, public relations, nominating,
personnel, planning, and policy committees, or
any other committee that the organization be-
lieves should exist indefinitely to aid in gover-
nance. Seven of the most common standing
committees are described as follows:
The executive committee functions in place of
the full board and handles routine and crisis
matters between full board meetings. Empow-
ered to make decisions for the organization,
the executive committee is usually composed
of the organization's officers, Depending on
the size of the organization's board of direc-
tors, composition of the executive committee
could include committee chairs or other se-
lected leaders among the board. The executive
committee is usually chaired by the board's
volunteer president or chairperson.
The finance committee is responsible for moni-
toring the organizations finances and financial
controls and attending to audit requirements.
Typical functions for the finance committee are
to oversee organizational investments and to
work with the executive director to develop an
annual budget.
' Stephen R. Block
rocess of man-
pared with an
[Id also benefit

to the point,
can be effec-
)repared, hav-
ssues prior to
mailed out at
Agenda items
fames for dis-
lition to time
)f minutes, fi-
rts on the im-
m's strategic
e not always
tead of react-
ess with more
first be made
by assigning
ng or ad hoc
ittees can try
lings and rec-
or executive
the board's
rd
:h of service
rations is to
Rotations of
Id mean that
s, but, at the
end for one-
m gives the
)erforman ce

rhether they
term. Addi-
mulated by
Cation these
y would like
r term.
Limit on the
Jerson may
number of
The nominations committee is responsible for
identifying and recruiting appropriate candi-
dates for board positions and bringing forward
its recommendations to the full board. This
committee sometimes has the responsibility for
planning board development activities and
board retreats.
The personnel committee is usually responsible
for recommending policies to guide
the supervision of staff. In some organizations,
this committee may have the responsibility
for overseeing the search for an executive
director and then for her or his performance
evaluation. Members of this committee may
need to acquaint themselves with personnel
laws and regulations that regulate labor prac-
tices.
The program committee is responsible for mon-
itoring the organization's service delivery sys-
tem and may assist in evaluating client services.
This committee is often responsible for keep-
ing track of community trends that might af-

fect the organization's short-term and long-
term objectives. In complex organizations with
multiple services, there may be subcommittees
that are responsible for monitoring each of the
organization's program services.
The resource development committee is respon-
sible for examining alternate methods of fund-
raising and for establishing annual fund-rais-
ing goals. This committee often is active in the
solicitation of gifts or participation in special
events. In addition to raising money, it may so-
licit in-kind contributions.
The public relations or comnfitnity relations
committee has the responsibility for developing
good relations with the larger community and
with important community groups. The corn-
mittee examines opportunities to participate in
community events that will bring visibility to
the organization. It may oversee the writing of
press releases and may develop relationships
with media professionals.
Participants appointed to standing or ad hoc
committees do not need to be members of the
board of directors. Committee members may in-
clude staff, volunteers, representatives from
community agencies, and consumers of service.
Committee chairs are usually appointed by the
board's chairperson.
References
Block, Stephen R., and Jeffrey W. Pryor, 1991. Im-
proving Nonprofit Management Practice: A Hand-
book for Community-Based Organizations.
Rockville, MD: OSAP/Public Health Service, U.S.

Dept. of Health and Human Services.
Carver, John, 1990. Boards That Make a Difference.
San Franciscodossey-Bass.
Chad, Richard P., and Barbara E. Taylor, 1989.
"Charting the Territory of Nonprofit Boards."
Harvard Business Review (Jan.—Feb.): 44-54.
Conrad, William, and William E. Glenn, 1976. The
Effective Voluntary Board of Directors. Chicago:
Swallow Press.
Drucker, Peter F., 1989. "What Business Can Learn
from Nonprofits." Harvard Business Review
(Sept.—Oct.): 88-93.
, 1999. "Lessons for Successful Nonprofit
Governance." Nonprofit Management and Leader-
ship, vol. I, no. 1 (Fall): 7-14.
Hadden, Elaine M., and Blaine A. French, 1987. Non-
profit Organizations: Rights and Liabilities for
Members, Directors and Officers. Wilmette, IL:
Callaghan & Co.
Herman, Robert Dean, and Stephen R. Block, 1990.
"The Board's Crucial Role in Fund Raising":
222-241. In Jon Van Til, et al., Critical Issues in
American Philanthropy. San Francisco: fossey-Bass.
Herman, Robert Dean, and Richard O. Heimovics,
1991. Executive Leadership in Nonprofit Organiza-
tions. San Francisco: Jossey-Bass.
Herman, Robert Dean, and Jon Van Til, eds., 1989.

Nonprofit Boards of Directors: Analyses and Applica-
tions, New Brunswick, NJ: Transaction Publishers.
Kurtz, Daniel L., 1988. Board Liability New York:
Moyer Bell.
Middleton, Melissa, 1987. "Nonprofit Boards or Di-
rectors: Beyond the Governance Function":141—
153. In Walter W. Powell, ed., The Nonprofit Sector:
A Research Handbook, New Haven: Yale University
Press.
O'Connell, Brian, 1985. The Board Members Book.
New York: The Foundation Center.
O'Houle, Cyril, 1989. Governing Boards. San Fran-
cisco: fossey-Bass.
Saidel, Judith R., 1993. "The Board Role in Relation
to Government: Alternative Models": 32-51. In
Dennis R. Young, Robert M. Hollister, and Vir-
ginia A. Hodgkinson, eds., Governing, Leading,
and Managing Nonprofit Organizations. San Fran-
cisco: Jossey-Bass.
Page 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8Page 9Page
10
Board of Directors
STEPHEN R. BLOCK
p
eople vested with the legal responsibility

to govern and control the affairs of orga-
nizations. Accountability for any non-
profit organization ultimately rests with its
board of directors (sometimes called board of
trustees). Although the board may delegate man-
agement authority to a paid staff person, known
as the executive director, the board can never be
relieved of its legal and fiduciary responsibilities.
Governing board members are stewards of the
public interest and have a burden of responsibil-
ity to use and preserve the organization's assets
for advancing a beneficial mission.
Board membership is an admirable act of citi-
zenship for those who are willing to accept a sig-
nificant amount of volunteering. These special
people are generally not compensated for their
board service, and they must balance their board
obligations with personal demands of work,
family responsibilities, and other community
activities. This commitment to community ser-
vice is tied to a long history of voluntary action,
with roots that precede the founding of the
United States. The innate desire to help is said to
be a unique quality in America, a democratic at-
tribute that influences the modern nonprofit
board of directors.
Because of the board's legal responsibilities,
personal limitations on directors' time, and the
daily involvement of the executive director, there
is often confusion between the board and staff
over roles, responsibilities, turf, and expecta-
tions for performance. The board and executive

director must clearly understand their mutual
expectations if they are to develop a healthy gov-
erning body.
Why Have a Board?
Of the many reasons for having a board of direc-
tors, legal necessity is primary. In some states,
only one board member is required for incorpo-
rating an organization, but most states require at
least three or more individuals to serve as direc-
tors of a governing board. The Internal Revenue
Service also requires nonprofit organizations
seeking or maintaining recognition for tax-
exempt purposes to have governing hoards of
directors. Members of governing boards are ex-
pected to engage willingly in board activities,
without receiving any benefit of the organiza-
tion's assets or earnings.
Aside from the legal necessities, the most
practical reasons for having a board of directors
are to ensure that the organization is effectively
managed and is working toward the achieve-
ment of a mission that has a public purpose. Few
I / Vic Murray
tensity of Gov-
t Management
0: 203-2 6.
rganizations: A
, NJ: Prentice-
ing of Organi-

tegic Planning.
luating the Ef-
ions." In R. D.
gook of Non-
San Francisco:
itrategic Man-
Drganiza tions.
Government.
coming. "Ra-
nes on When
of Fundees.”
terly.
Newcomer,
gram EvaIna-
^ CHAPTER 2
15
nonprofit organizations have the resources to
employ the personnel with the expertise that is
necessary to accomplish their organizational ac-
tivities. The collective wisdom of the board of
directors can serve as a bank of skilled and
knowledgeable resources to provide support, ad-
vice, and counsel. It has been widely proposed
that board members should comprise the three

Ws; individuals who are willing to "work," some
with "wisdom," and others with "wealth."
Why Would Someone Want to
Serve on a Board?
Each person has his or her own reason for vol-
untary board service; however, one of the most
often-stated is to serve one's community. Volun-
teering as a board member is an honor and a
fundamental privilege of a free people.
There are many reasons for joining or for
staying on a board. For example, board partici-
pation may be an expectation of one's employer.
It may provide an opportunity for gaining or
maintaining social status in the community, sat-
isfy socializing needs, lead to new knowledge
and skills, and enhance one's résumé. For some
people, voluntary board service satisfies reli-
gious convictions based on a belief in the orga-
nization's cause or mission; or is based on per-
sonal experience of a problem (such as a disease
or tragedy) that is addressed by the work and
mission of the organization.
The Board's Relationship with
Its Executive Director
Various authors have described their ideas about
the ideal working relationship between the board
and executive director. Two governance models
prevail. One model builds on the traditional view
that the executive director is employed as a sub-
ordinate to the board. The working relationship
is characterized by distinct and separate roles for

the board and executive director, with the board
directing, supervising, and limiting the director's
activities as the board sees fit.
The other governance model builds on ideas
of partnership and collegiality between the exec-
utive director and board of directors. This model
acknowledges that the board of directors has
clearly defined legal responsibilities. However,
the model differs from traditional approaches in
a fundamental way: The executive director takes
an active role in assisting with or coordinating
the participation of board members in fulfilling
their governance commitment. This form of
board management makes full use of the execu-
tive director's distinctive management and lead-
ership skills. Consequently, the quality of the
board's performance is a direct result of the exec-
utive director's ability to steer and promote pro-
ductive interaction among board members. The
executive director can call upon board managers
to intervene when necessary in either the internal
or external environment of the organization.
Who Is in Charge of
Making Policy?
Prescriptions for effective board practice often
state that the board is legally responsible for
making policy and the staff is responsible for
carrying it out. Though this division of labor is
technically correct, it is inaccurate in its practice.
The staffs of nonprofit organizations have a sig-
nificant level of influence on the creation of pol-
icy. Since they are closest to the operations and

programs of the agency, they may know when a
new policy would provide the guidance needed
to get the job done. Thus, staff input is almost
always required to create new policies. In addi-
tion, the staff often shapes the policy by drafting
proposed policy statements.
In effective nonprofit organizations, the staff's
point of view on matters of policy development
is considered an integral part of governance. Of-
ten, effective organizations are those in which
the board adopts policy with input of the staff,
and the staff implement policy with the advice,
counsel, and support of the board.
What Are the Major Areas of
Board Responsibility?
There are at least nine major areas of board re-
sponsibility; namely, to
Stephen R. Block
rs. This model
directors has
es. However,
approaches in
director takes
coordinating
rs in fulfilling
his form of
of the execu-

ent and lead-
quality of the
t of the exec-
promote pro-
members. The
and managers
er the internal
anization.
determine the organization's mission;
set policies and adopt plans for the organiza-
tion's operations;
approve the budget, establish fiscal policies and
financial controls, and monitor financial posi-
tion of the organization;
provide adequate resources for the organiza-
tion through establishment of resource-devel-
opment goals and commitment to fund-raising
through giving and soliciting;
develop organizational visibility through net-
working and linkage to the community;
ensure that the organization's corporate and
governance documents are updated and se-
cured, and all reports are filed as required;
recruit and select new board members and
provide them with an orientation to the
board's business;
recruit, hire, evaluate, reward, or terminate, if
necessary, the executive director of the organi-
zation; and
9. protect and preserve the organization's non-

profit tax-exempt status.
work of the board and evaluating the board's
performance. The chair presides at and calls spe-
cial meetings of the board and sets the direction
for organizational goal setting. This volunteer
position requires a great deal of time commit-
ment and responsibility.
Vice-President
In the absence of the volunteer president, the
vice-president usually assumes the duties of
president and the responsibility for chairing
board meetings. Often, the role of vice-president
entails chairing a major committee of the board.
In some Organizations, the vice-president auto-
matically becomes president-elect, a succession
plan that may not be effective in all organiza-
tions.
practice often
sponsible for
esponsible for
ion of labor is
in its practice.
Ions have a sig-
breation of pol-
operations and
'r know when a
iidance needed
input is almost
ilicies. In addi-
licy by drafting

The Role of Board Officers
The officers of the board of directors have a re-
sponsibility to set the tone for organizational
leadership. The duties of the president (chair-
person), vice-president, treasurer, and secretary
are described in the organization's bylaws.
ions, the staff's
y development
overnance. Of-
hose in which
ut of the staff,
rith the advice,
I.
Secretary
The board secretary has the obligation to protect
the organization's corporate documents, such as
the bylaws, the articles of incorporation, board
and committee minutes, and important corre-
spondence.
Many individuals try to avoid election to the
office of secretary because of the myth that the
board secretary must take the minutes of the
board and executive committee meetings. The
board secretary does not have to write the min-
utes, but he or she is responsible for ensuring
that the minutes are taken and accurately reflect
the business meetings of the board and executive
committee. Upon becoming official annals of
the organization, the board minutes should be
signed and dated by the board secretary. In orga-
nizations that rely on parliamentary rules and
procedures (such as Robert's Rules of Order,

Newly Revised), the board secretary is required
to become familiar with the meeting procedures
and may have to make procedural rulings.
Treasurer
as of
is of board re-
President
In most nonprofit organizations the title and
position of president refers to the highest level
volunteer who also serves as chairperson of the
organization. However, in some nonprofit orga-
nizations a corporate model of governance is
followed, therefore, the title of "president" re-
places the more commonly used title of "execu-
tive director." If the president is also the paid
chief executive, the position usually allows for
participation as a board member. In this in-
stance, the role of chairperson is handled by the
chief volunteer.
The volunteer president or chairperson is re-
sponsible for the activities of the board and for
assigning board committee chairs, unless assign-
ments are automatically spelled out in the by-
laws. The chair is responsible for monitoring the
The treasurer should not be expected to do the
bookkeeping and accounting for the organiza-
tion. Instead, the treasurer is responsible for
making sure that the organization's finances are
properly accounted for and excess revenues are

1 8 2 / Stephen R. Block
wisely invested. If a finance committee exists, the
treasurer often serves as its chairperson. On be-
half of the board, the treasurer ensures that fi-
nancial controls are in place and tested on a pe-
riodic basis. The treasurer also participates in
the selection and recommendation of an audit-
ing firm. The treasurer reports on the financial
statements at board meetings, executive com-
mittee meetings, and, if applicable, at annual
meetings of the organization.
The Board's Role in
Fund-Raising
The board must play a fundamental role in rais-
ing money and resources. Board members also
have the personal responsibility of making fi-
nancial contributions in addition to giving their
voluntary time to the organization. Instituting a
policy that requires board members to con-
tribute is sometimes employed.
Unanimous giving among the board sets the
right tone for fund-raising. It enhances the cred-
ibility of the organization when it seeks contri-
butions from others. Unanimous-board-giving
practices have even become an expectation
among many funders.
Giving is only one part of the board member's
obligation; the other part is to assist in planning
and solicitation activities. Collectively, the board
can identify a pool of potential contributors.

Friends, business associates, relatives, and ven-
dors are among likely prospects. Some board
members shy away from verbally asking for
money, but they may be able to write letters or at
least sign letters that have been drafted for them
by staff.
Board Composition
Determining the composition of a board of di-
rectors is claimed by some to be a blend of sci-
ence and art.
Board composition should not be the result of
opening the door to just anyone who is willing
to serve but should result from purposeful re-
cruitment strategies. Prospective board mem-
hers, for example, should be familiarized with
the organization's purpose, mission, vision,
goals, and objectives, as well as board duties, re-
sponsibilities, and the organization's expecta-
tions.
The task of filling vacancies on the board
should be approached carefully and should result
in a board composition that is able to advance the
organization's mission. There are two prepara-
tory steps to actively recruiting the right person.
The initial step is to acknowledge that organiza-
tions go through different stages of development
similar to the various life cycles experienced by
individuals. Various maturational stages lead to
differing organizational issues and needs. Assess-
ing which phase an organization is in is useful
not only to prepare the organization for change

but also to determine the leadership qualities re-
quired of potential board members. Matching an
organization's life cycle to the requisite skills of a
board member could lead to more effective and
purposeful organizational outcomes.
A second step is to conduct a thorough demo-
graphic inventory of board composition, which
will reveal the board's weakest representational
areas. Inventory results will show a composi-
tional balance or imbalance in such variables as
gender, age range, ethnicity, socioeconomic sta-
tus, political party affiliation, educational level,
professional or vocational interests, knowledge
of consumer issues, and location of primary res-
idence. Information of this type can be valuable
to organizations especially seeking to create a di-
verse board.
As suggested, the composition of a board can
contribute to the level of ease or difficulty with
which an organization is governed and man-
aged. A board composed of individuals with
similar socioeconomic backgrounds or other fa-
miliar traits may reach consensus more often,
but it is less likely to formulate challenging ideas
or seek out policy reforms. Compared to homo-
geneous hoards, those that reflect diversity
among their members are likely to experience
greater participatory challenges. Even though di-
versity is an enriching quality in a board, its
members must contend with differing values,
mores, and interpretations of community infor-
mation and beliefs.

The Executive Director as
Board Member
Some nonprofit organizations use a corporate
model of governance structure in which the po-
sition of executive director is transformed from
staff to member of the board as its president-
chief executive officer (CEO).
The model of corporate governance may not
be an appropriate structure for all nonprofit or-
ganizations. It is used by larger and more com-
plex institutions that rely on a strong CEO. Re-
gardless of size, the CEO as staff and board
member must be wary of conflicts of interest
and must avoid participating in discussions or
decisionmaking that will lead to personal bene-
fits. Critics of nonprofit organizations using cor-
porate models suggest that the CEOs have no
choice but to use the knowledge they have ac-
quired in managing the day-to-day operations.
This knowledge is often used to influence the di-
rection of the board and organization.
There is a dearth of comparative research on the
benefits and disadvantages of corporate models as
compared to traditional models in use by non-
profit organizations. Consequently, it is impossible
to suggest that any one model will lead to success.
Board Recruitment and
Orientation

Preconditions of board recruitment include
identifying the governance needs of organiza-
tions in (life cycle) transition and discovering the
characteristics and qualities to be found in new
board members. There are many variables to
consider in sizing up a board prospect, including:
I. an individual's ability to create a vision, prob-
lem-solve, and facilitate conflict resolution;
an individual's commitment of time to partici-
pate fully;
enthusiasm for the organization's mission, vi-
sion, goals, and values;
a person's skills and experience in such areas as
public policy analysis and fund-raising, or ex-
pertise in program service delivery; and
diversity factors.
Once a profile is developed that describes the
ideal board member, the recruitment task can
formally begin. On the basis of expediency, many
nonprofit organizations make the mistake of ig-
noring the profile and recruiting the friends of
board members. Sometimes, individuals are in-
vited to become prospective board members for
the simple reason that they are alive and seem
agreeable to serving! Serious problems may occur
when attempts have not been made to match the
needs of the organization with the ideal board
member. Locating someone who matches the
profile and agrees to serve, however, is not a guar-
antee of board success. In fact, most governance
problems seem to stem from the recruitment
process. Though using a profile can increase the
likelihood of finding the right person, a perfect
match does not guarantee that problems will not

arise, such as., nonattendance at board meetings,
lack of participation in board committees , an un-
willingness to contribute financially, or interfer-
ing or trying to micromanage the day-to-day op-
erations of the organization.
Finding a board prospect who fits the profile
is, indeed, a critical part of the assignment, as is
fully informing the prospect about specific
board duties. The lack of knowledge about the
expectations for board member role and gover-
nance responsibilities will directly contribute to
organizational confusion, ineffectiveness, and a
breach in a board member's commitment. Since
each organization's board of directors has a dif-
ferent mission and focus for its work, even the
seasoned board member who joins a new board
should receive a briefing on the organization, its
expectations of board members, and board re-
sponsibilities. It is imperative to sqek an agree-
ment to serve only after the board prospect un-
derstands the parameters of Iloard service.
Organizations sometimes give prospects a
board-prospecting packet, which may contain
some or all of the following: a history of the or-
ganization; board job-descriptions; a copy of the
articles of incorporation and bylaws; a copy of
the organization's purpose or mission statement;
an organizational chart; and a description of
program services, with a list of committees and
duties of each. This packet may also include a
roster of the current board, with work affilia-
/ Stephen R. Block

miliarized with
nssion, vision,
loard duties, re-
ttion's expecta-
on the board
ad should result
e to advance the
e two prepara-
te right person.
; that organiza-
if development
experienced by
I stages lead to
needs. Assess-
is in is useful
ion for change
ip qualities re-
s. Matching an
isite skills of a
e effective and
:s.
irough demo-
)sition, which
nesentational
v a composi-
h variables as
;conomic sta-
:ational level,
s, knowledge
'primary res-
n be valuable
:o create a di-
a board can

ifficulty with
d and man-
riduals with
or other fa-
more often,
enging ideas
id to homo-
ct diversity
experience
I though di-
t board, its
'ing values,
anity infor-
tions, addresses, and phone numbers; dates of
future meetings and special events; an annual re-
port and organization brochures, newsletters, or
related materials; and a copy of a recent audi-
tor's financial report, annual budget, and finan-
cial statements.
It may also be helpful for the organization's
board to assign a veteran member to assist the
prospect in "learning the ropes." The availability
of a support person may encourage the board
prospect to join a concerned board of directors.
The veteran could serve as a resource person
during the recruitment phase and then as a
mentor or helper during the transition period
following induction.

How Many Board Members?
There is no formula for determining the appro-
priate size of an organization's board of direc-
tors. The size of the board must be tailored to
suit the needs of the organization.
One helpful way to determine board size is an
organizational life-cycle analysis, referred to pre-
viously as a pre-requisite to board recruitment.
Organizations and their boards experience vari-
ous developmental stages, all of which can influ-
ence the number and type of skilled board
members that are needed.
Large- and small-sized boards have both ad-
vantages and disadvantages. The number of
people on a board can be a factor that influences
how board members comport themselves. Large
boards are generally unwieldy because it is diffi-
cult to pay attention to so many people. Because
the larger group will find it more difficult to be-
come cohesive and familiar with the cohort, it
may tend to be more formal in its board conduct
and meetings. Organizations that are just start-
ing out, or those in need of a boost in financial
resources, may be better served by a larger board
of 20 to 25 individuals. In this case, the larger the
number of board members the greater the
chances of reaching out to potential donors.
On one hand, smaller boards are limited in
accomplishing supportive activities such as
fund-raising. On the other hand, a smaller
group may have to rely on its creativity, such as

developing a fund-raising plan for implementa-
tion by a committee of staff, board members,
and other community volunteers. Organizations
that do not rely heavily on the board alone for
fund-raising or other supportive activities might
be better served by a board of no more than ten
members. The smaller group would have more
of an opportunity to become cohesive; learn ex-
perientially how to mesh effectively their collec-
tive wisdom, advice, and counsel; reach deci-
sions through consensus; and it would have no
need to use controlling, parliamentary proce-
dures for conducting board meetings.
Board Liability
Though nonprofit boards of directors are infre-
quently sued, the risk of liability is nevertheless a
legitimate concern for volunteer board mem-
bers. Financial losses associated with a lawsuit
can be devastating to an organization and its
board members. The quality and manner in
which boards make decisions or fail to make de-
cisions can result in a legal challenge that tests
whether they have met or failed in their respon-
sibilities as stewards of public interest.
Board members and prospective members are
often comforted by the knowledge that the non-
profit organization has purchased a director's
and officers' (D&O) liability insurance policy.
Concerns about lawsuits have caused a rising de-
mand for this type of insurance, and conse-
quently, premium costs vary widely.

A factor that affects the cost of D&O insur-
ance is the nature of the organization's work,
whether it is, for example, a direct service health
care agency or an organization that promotes
the arts. Features and exclusions may also differ
greatly from one policy to another and affect the
price and value of the policy.
Indemnification refers to the organization en-
suring that it will pay the reasonable costs asso-
ciated with liability suits, such as judgments and
settlements against its board members. This
practice is sometimes compelled by state law. In
other situations it may be an optional practice of
the board. In either event, the organization's by-
laws outline the extent of indemnification. In-
2 / Stephen R. Block
For implementa-
mard members,
s. Organizations
board alone for
activities might
o more than ten
ould have more
hesive; learn ex-
rely their collec-
sel; reach deci-
would have no
nentary pro ce-
ings.

.ctors are infre-
s nevertheless a
r board mem-
with a lawsuit
ization and its
rid manner in
all to make de-
enge that tests
ri their respon-
hest.
members are II
that the non- ;
d a director's ,t
rance policy. ''
a rising de-
, and conse-
.
D&O insur-
tion's work„'
ervice health
at promotes
sy also differ
Ind affect the
Inization en-
costs asso-
iments and
nbers. This
Rate law. In
I practice of
ration's by-
cation. In-

demnification cannot, however, be exercised
when the organization brings a suit against its
own board members. In practice, indemnifica-
tion is a form of self-insurance and assumes that
the organization has the funds to pay legal costs.
Given the resources of some nonprofit organiza-
tions, this assumption may not be valid.
In addition to indemnification and D&O lia-
bility insurance coverage, a board of directors
can purchase various liability insurance policies,
including, but not limited to, the following spe-
cialty policies: general liability, employees' liabil -
ity, malpractice, automobile, and fiduciary.
To encourage board and other voluntary ser-
vice in community organizations, all 50 states
have passed volunteer protection laws. The ex-
tent of protection varies among the states, and
this form of legislation has largely been untested
in the courts.
Volunteer protection laws and the varieties of
liability insurance premiums are not the only
ways boards can protect themselves. The most
effective form of protection is limiting risk by
adhering to effective governance practices. There
are three standards of conduct that should guide
the board member, as follows:
Duty of care: imposes an obligation that all board
members discharge their duties with the care
that an ordinarily prudent person would exercise
under similar circumstances. This includes being

diligent, attending meetings, and becoming ac-
quainted with issues before reaching a decision.
Duty of loyalty: requires that each board mem-
ber act primarily in the best interest of the or-
ganization and not in his or her own personal
best interest or in the interest of individuals at
the expense of the organization.
Duty of obedience: imposes an obligation that
board members will act in conformity with all
laws in addition to acting in accordance with
the organization's mission.
For the voluntary members of hoards of di-
rectors, acting prudently, lawfully, and in the
best interests of the organization can, in part, be
achieved by adhering to the following six re-
sponsible board practices:
1. Becoming an active board member. Board mem-
bers who are familiar with the organization's
mission and purpose are generally able to make
better decisions for the organization. Members
may wish to review the mission annually to
serve as a reminder that the board uses the mis-
sion statement as its guide in decisionmaking.
Attending all meetings. Being absent from
meetings will not necessarily excuse a board
member from responsibilities for decisions
reached by those in attendance. In fact, a mem-
ber's absence from meetings increases potential
risks for the entire board because it is making
decisions without the benefit of the views of all
of its members.
Insisting on having sound financial management
tools and control systems. Board members need

to learn how to read and use financial state-
ments and audit reports to understand and
monitor the organization's fiscal health. They
also need to understand that their decisions
have a financial impact on the organization.
Speaking up. Members should not remain
silent when they disagree with a decision or an
opinion expressed by others. Additionally,
board members should ask questions when the
organization's goals and objectives are not be-
ing met.
Identifying conflicts of interest. Board members
need to avoid participating in discussions or
decisionmaking when they have conflicts of in-
terest. Even the perception of a conflict of in-
terest must be avoided, if possible. If they are
faced with an actual conflict or even the per-
ception of one, board members must inform
the other directors of the situation and excuse
themselves from participation in related areas
of decisionmaking or transactions.
6. Staffing. In addition to its having personnel
policy guidelines for the executive director, the
hoard must be certain that these personnel
policies are adequate and updated to reflect all
applicable mandates of law.
In summary, minimizing the risk of hoard lia-
bility requires an active and involved board of
directors.
Dismissal of Board Members
Terminating a member from the board of direc-
tors for nonattendance at board meetings or lack

of follow through on assignments that are
required for the board's decisionmaking pur-
poses, for example, is a delicate procedure. Un-
fortunately, there are times when it becomes
necessary to discharge board members because
their actions create liability risks.
The chairperson of the board has the respon-
sibility to request resignations from board mem-
bers. The executive director plays a supportive
role to the board chair and board member in
what for all can be emotionally trying and em-
barrassing.
Confidence and sensitivity should be used
when approaching the board member with the
idea of resignation. A board member should be
given every consideration to effect a smooth de-
parture. Ultimately, the member's "saving face"
is important for maintaining relationships at
this level of community involvement.
To prevent the need for board dismissals or to
support the actions of the board chair when a
dismissal is called for, the board should adopt a
principle stating that its work and organiza-
tional mission are too important to allow for
unnecessary liability risks associated with un-
committed hoard members. The board can do
some prevention work by adopting a bylaw pas-
sage and job description that reflect standards

for board member conduct and participation.
Of course, some organizations have rules of this
type but choose not to enforce them. For a
member to violate or ignore such bylaw provi-
sions suggests poor judgment and raises the lia-
bility risks of the board.
How Often Should the
Board Meet?
A board is generally required to meet at least
once a year. In practice, some hold meetings
once a month, every other month, or once each
calendar quarter. Frequency of board meetings
and the duration of each meeting should reflect
the culture of the organization and the type of
strategic issues requiring board attention. Deal-
ing with planning and policy issues, threats of
litigation or bad publicity, and concerns of fi-
nancial obligations are reasons for a board to
meet more frequently. Organizations that are
new in their development, or in process of man-
aging significant changes, as compared with an
organization in a steady state, would also benefit
from meeting more frequently.
Effective meetings are focused, to the point,
and stick to the agenda. Meetings can be effec-
tive when board members come prepared, hav-
ing studied the agenda and the issues prior to
the meeting. The agenda should be mailed out at
least a week to ten days in advance. Agenda items
should be allocated realistic time frames for dis-
cussion and taking action, in addition to time
designated for the routine review of minutes, fi-

nancial reports, and progress reports on the im-
plementation of the organization's strategic
plans.
Newly identified obstacles are not always
solved during board meetings. Instead of react-
ing to unfinished issues and business with more
board meetings, attempts should first be made
to streamline the review of issues by assigning
the task to an appropriate standing or ad hoc
committee. In this way, the committees can try
to remedy issues or bring their findings and rec-
ommendations back to the board or executive
committee without monopolizing the board's
time and agenda.
How Long Should a Board
Member Serve?
The solution to a member's length of service
that is practiced by many organizations is to
stagger the expiring terms of office. Rotations of
three-year terms, for example, would mean that
each member serves for three years, but, at the
end of each year, obligations would end for one-
third of the members. This system gives the
board ample time to evaluate the performance
of board members, to determine whether they
should be invited back for another term. Addi-
tionally, the experience base accumulated by
outgoing board members is information these
members use to decide whether they would like
to be reelected for another three-year term.
Sonic organizations also place a limit on the
number of consecutive terms a person may

serve. After reaching the maximum number of
consecutive terms of service, the board member
would automatically leave the board. A board
member who rotated off could be elected again
after a year or more, when consecutive service
would not be an issue. After reaching the allow-
able service limit, an individual could also con-
tinue to support the organization's cause in
some other capacity, such as on a committee or
advisory board.
It is important that all board member terms
do not expire at the same time. Without some
overlapping representation from members of
the board, the organization would lose its im-
portant history and continuity of policy devel-
opment and strategic direction. Veteran board
members bring a maturity and depth of under-
standing about the issues the organization faces,
and when the board adds a group of newer
members it brings enthusiasm and fresh ideas to
the board's governing role.
How Are Governing Boards,
Advisory Boards, and
Honorary Boards Different?
When one is referring to the term "board of di-
rectors"ectors" or "board of trustees," the reference is to
a governing board, a grouping of individuals who
have assumed a legal responsibility for an orga-

,. .nization's existence. These people make policy
and are responsible for how money is generated
and spent, toward the accomplishment of a mis-
sion that can be beneficial to the general public
or to a segment of the population.
Advisory boards, however, do not bear the legal
burdens of governing boards. An advisory board
exists to assist the governing board or the execu-
' tive director in examining issues and recommen-
' dations. Recommendations that result from the
work of an advisory board do not have to be ac-
cepted or followed by the governing board.
Honorary boards are usually composed of in-
dividuals who are well-known because of some
measure of celebrity or prominence in the com-
munity. Honorary boards do not necessarily
meet. In fact, some individuals agree to serve as
honorary members because they do not have the
time or inclination to attend meetings. Individu-
als serving in this honorary capacity lend credi-
bility to an organization by allowing the use of
their prominent names in brochures and on
letterheads.
Sometimes, members of honorary boards and
advisory boards are enlisted to assist in organi-
zational fund-raising activities. The visibility
and credibility of the honorary or advisory
member sends a signal to the community that
the organization is worthy of financial support.

Types of Committees
Committees are categorized as either standing
committees or ad hoc committees. Ad hoc (or
special) committees, on one hand, have a life-
span equal to the completion of the committee's
assignment. Standing committees, on the other
hand, are part of the permanent governance
structure of an organization with duties and re-
sponsibilities described in bylaws. Standing
committees may include executive, finance, by-
laws, fund-raising, public relations, nominating,
personnel, planning, and policy committees, or
any other committee that the organization be-
lieves should exist indefinitely to aid in gover-
nance. Seven of the most common standing
committees are described as follows:
The executive committee functions in place of
the full board and handles routine and crisis
matters between full board meetings. Empow-
ered to make decisions for the organization,
the executive committee is usually composed
of the organization's officers, Depending on
the size of the organization's board of direc-
tors, composition of the executive committee
could include committee chairs or other se-
lected leaders among the board. The executive
committee is usually chaired by the board's
volunteer president or chairperson.
The finance committee is responsible for moni-
toring the organizations finances and financial
controls and attending to audit requirements.
Typical functions for the finance committee are
to oversee organizational investments and to
work with the executive director to develop an

annual budget.
' Stephen R. Block
rocess of man-
pared with an
[Id also benefit
to the point,
can be effec-
)repared, hav-
ssues prior to
mailed out at
Agenda items
fames for dis-
lition to time
)f minutes, fi-
rts on the im-
m's strategic
e not always
tead of react-
ess with more
first be made
by assigning
ng or ad hoc
ittees can try
lings and rec-
or executive
the board's
rd
:h of service

rations is to
Rotations of
Id mean that
s, but, at the
end for one-
m gives the
)erforman ce
rhether they
term. Addi-
mulated by
Cation these
y would like
r term.
Limit on the
Jerson may
number of
The nominations committee is responsible for
identifying and recruiting appropriate candi-
dates for board positions and bringing forward
its recommendations to the full board. This
committee sometimes has the responsibility for
planning board development activities and
board retreats.
The personnel committee is usually responsible
for recommending policies to guide
the supervision of staff. In some organizations,
this committee may have the responsibility
for overseeing the search for an executive
director and then for her or his performance
evaluation. Members of this committee may
need to acquaint themselves with personnel

laws and regulations that regulate labor prac-
tices.
The program committee is responsible for mon-
itoring the organization's service delivery sys-
tem and may assist in evaluating client services.
This committee is often responsible for keep-
ing track of community trends that might af-
fect the organization's short-term and long-
term objectives. In complex organizations with
multiple services, there may be subcommittees
that are responsible for monitoring each of the
organization's program services.
The resource development committee is respon-
sible for examining alternate methods of fund-
raising and for establishing annual fund-rais-
ing goals. This committee often is active in the
solicitation of gifts or participation in special
events. In addition to raising money, it may so-
licit in-kind contributions.
The public relations or comnfitnity relations
committee has the responsibility for developing
good relations with the larger community and
with important community groups. The corn-
mittee examines opportunities to participate in
community events that will bring visibility to
the organization. It may oversee the writing of
press releases and may develop relationships
with media professionals.
Participants appointed to standing or ad hoc
committees do not need to be members of the
board of directors. Committee members may in-
clude staff, volunteers, representatives from
community agencies, and consumers of service.
Committee chairs are usually appointed by the
board's chairperson.

References
Block, Stephen R., and Jeffrey W. Pryor, 1991. Im-
proving Nonprofit Management Practice: A Hand-
book for Community-Based Organizations.
Rockville, MD: OSAP/Public Health Service, U.S.
Dept. of Health and Human Services.
Carver, John, 1990. Boards That Make a Difference.
San Franciscodossey-Bass.
Chad, Richard P., and Barbara E. Taylor, 1989.
"Charting the Territory of Nonprofit Boards."
Harvard Business Review (Jan.—Feb.): 44-54.
Conrad, William, and William E. Glenn, 1976. The
Effective Voluntary Board of Directors. Chicago:
Swallow Press.
Drucker, Peter F., 1989. "What Business Can Learn
from Nonprofits." Harvard Business Review
(Sept.—Oct.): 88-93.
, 1999. "Lessons for Successful Nonprofit
Governance." Nonprofit Management and Leader-
ship, vol. I, no. 1 (Fall): 7-14.
Hadden, Elaine M., and Blaine A. French, 1987. Non-
profit Organizations: Rights and Liabilities for
Members, Directors and Officers. Wilmette, IL:
Callaghan & Co.
Herman, Robert Dean, and Stephen R. Block, 1990.
"The Board's Crucial Role in Fund Raising":
222-241. In Jon Van Til, et al., Critical Issues in

American Philanthropy. San Francisco: fossey-Bass.
Herman, Robert Dean, and Richard O. Heimovics,
1991. Executive Leadership in Nonprofit Organiza-
tions. San Francisco: Jossey-Bass.
Herman, Robert Dean, and Jon Van Til, eds., 1989.
Nonprofit Boards of Directors: Analyses and Applica-
tions, New Brunswick, NJ: Transaction Publishers.
Kurtz, Daniel L., 1988. Board Liability New York:
Moyer Bell.
Middleton, Melissa, 1987. "Nonprofit Boards or Di-
rectors: Beyond the Governance Function":141—
153. In Walter W. Powell, ed., The Nonprofit Sector:
A Research Handbook, New Haven: Yale University
Press.
O'Connell, Brian, 1985. The Board Members Book.
New York: The Foundation Center.
O'Houle, Cyril, 1989. Governing Boards. San Fran-
cisco: fossey-Bass.
Saidel, Judith R., 1993. "The Board Role in Relation
to Government: Alternative Models": 32-51. In
Dennis R. Young, Robert M. Hollister, and Vir-
ginia A. Hodgkinson, eds., Governing, Leading,
and Managing Nonprofit Organizations. San Fran-
cisco: Jossey-Bass.
Page 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8Page 9Page
10

Governance of
Nonprofit Organizations
VIC MURRAY
T
he term "governance" is defined to mean
the strategic leadership of nonprofit or-
ganizations. It is therefore important to
understand how this use of the term differs from
the way it is used in the context of traditional
public administration. In the latter context gov-
ernance usually refers to the process of govern-
ment policy making, which is intimately related
to the political activities of elected officials.
Outside the realm of government, the concept
of governance refers to an aspect of the manage-
ment of a given organization. Indeed, in most
dictionaries, the synonyms of governance are
words such as management and administration.
In current parlance, the term has taken on a
more specific meaning as a process for making
certain types of management decisions. These
are commonly referred to as strategic decisions,
which have to do with such matters as setting the
organization's mission, establishing the values it
wishes to embody, deciding the broad strategy
for achieving the mission, and evaluating its ef-
fectiveness in meeting its goals.
This concept of governance is rooted in the
positivist tradition of social science, which as-
sumes that individuals can rationally choose

among alternative actions based on information
that is consciously gathered and assessed. These
decisions are believed to then determine actual
behavior, and the outcomes of such behavior,
are thought to modify the subsequent decisions
(Burrell and Morgan 1979). As we shall see, so-
called postmodern critical theory takes issue
with this concept of governance as an intend-
edly rational process, preferring instead to see
the behavior of organizational members emerg-
ing from a much more complex, less-determin-
istic process.
This brief explication of the governance of
nonprofit organizations focuses on problematic
issues in the process of making governance deci-
sions and their relationship to organizational
effectiveness.
Problematic Issues in Nonprofit
Governance
Considering governance as a decisionmaking
process, there are two dominant issues of con-
cern to scholars. One issue is who plays, or
should play, which roles in the process, or, in
practical terms, who is in charge of the organi-
zation and to whom is it accountable? The other
issue is how governance decisions are, or should
be, made.
9
Governance

Tr
^ CHAPTER 1
dia
Yet
)er
in
:o:
1 0 1 / Vic Murray
Who Governs?
The literature on the question of roles in gover-
nance decisionmaking tends to be of two dis-
tinct types: normative and analytic.
The Normative Approach
The normative literature takes the position that
the final authority on governance decisions
ought to be the nonprofit organization's board of
directors, governors, or trustees (e.g., Carver
1990; Houle 1989). It is the body to whom the
rest of the organization is accountable and that,
in turn, is accountable for the organization to the
community, for which it acts as "trustee." It fol-
lows that the board must be both legally and
morally responsible for establishing the organiza-
tion's mission and ensuring that it is carried out.
The most common theme in this literature is
to suggest that there are too many organizations

in which the boards fail to govern properly. They
are perceived as committing one of two cardinal
sins. On one hand are those boards that allow
the organization's paid top executives to make
the governance decisions, which they then "rub-
ber-stamp." On the other hand are those that do
not have a clear understanding of how gover-
nance issues differ from detailed operational
issues and, hence, get too involved in the day-
to-day micromanagement of the organization,
leaving no one to focus on the big picture of set-
ting the strategic direction.
At this point, the normative literature
launches into prescriptive recommendations on
how the nonprofit board should be reformed so
as to ensure that it effectively plays its gover-
nance role (and only this role). A brief summary
of some of the most common recommendations
is as follows:
Since the role of the board is to act as trustee
for the "owners" of the organization, it there-
fore ought to represent such owners and be
fully aware of what the owners want from the
organization. The problem, unfortunately, is
that, except for nonprofit organizations created
only to serve members who pay a membership
fee, it is rarely clear who a nonprofit's owners
actually are. The same dilemma arises when the
term "community" is used in place of owners.
This point is discussed further.
The board must be the primary body to define
the organization's mission and to articulate the
values for which it stands.

The board must obtain independent informa-
tion on the threats and opportunities facing
the organization and the organization's inter-
nal strengths and weaknesses in confronting its
changing environment. To have this informa-
tion selected and interpreted solely by the top
management is to run the risk of becoming a
rubber-stamp board.
Board members must be carefully selected and
thoroughly trained in how to make governance
decisions, otherwise they can be lured into be-
coming either "rubber-stampers" or meddling
micromanagers. Furthermore, this selection
and training should not be the responsibility of
the paid chief executive officer but of the orga-
nization's "owners" and the board itself.
Many other general recommendations are
also offered on how to create better boards, in-
volving such matters as optimal size, number
and type of committees, meeting leadership
techniques, and so forth. These are not discussed
here, however, since they do not explicitly relate
to the governance function per se.
In sum, the normative position on the gover-
nance of nonprofit organizations is quite clear
and remarkably homogenous across a large
number of writers on the subject: It ought to be
the sole purview of the board of directors, and it
ought to follow the classic principles of rational
strategic planning.
The Analytic Approach
The alternative approach to nonprofit gover-
nance is to be found in the rather small body of

literature that is concerned primarily with de-
scribing how governance decisions are actually
made and with trying to discover why they
emerge as they do. A subset of this literature
takes on an implicitly normative cast in that it
looks for what connections exist between the
processes followed in making strategic decisions
a
fi
d
1
/ Vic Murray
)fit's owners
;es when the
.t of owners.
dy to define
rticulate the
nt informa-
dties facing
tion's inter-
'fronting its
is informa-
by the top
)ecoming a
elected and
governance

Amy MeginnesBoard ChairpersonThe role of a board

Amy MeginnesBoard ChairpersonThe role of a board

Recommended

Recommended

More Related Content

Similar to Amy MeginnesBoard ChairpersonThe role of a board

Similar to Amy MeginnesBoard ChairpersonThe role of a board (20)

More from CicelyBourqueju

More from CicelyBourqueju (20)

Recently uploaded

Recently uploaded (20)

Amy MeginnesBoard ChairpersonThe role of a board