Ira oct 2010


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Building a Board that Adds Value to the Organization

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  • Examples and ideas
  • Boards need to consider:
    What changes are needed in the community? In the nation?
    How will we as an organization be involved in the change effort?
    Will we do it on our own? With what resources? Or with other groups?
  • PR activities and materials (annual reports, program brochures, newsletters, etc.)
    What funds to go after
    What resources are needed on the board to assist in implementing strategic goals
  • Program: Monitor and evaluate
    Also: ensure that strategic priorities are reflected in the budget
  • Exceptional boards embed learning opportunities into routine governance work and cultivate them outside of the boardroom.
    Board members, especially new ones, need guidance in governance duties, nonprofit practices and the organization’s field of endeavor. Long-time board members also benefit from a regular exchange of information with fellow board members. These continuing education conversations are important ways to pass on knowledge and to nurture board relationships.
    Ideas for agendas
    Worksheet Page 3 – Designing the agenda
    Also, Page 9 – Orientation Chart
  • Duty of Care
    Board members must exercise due care in all dealings with the organization and its interests. This includes careful oversight of financial matters and reading of minutes, attention to issues that are of concern to the organization, attending board meetings, and raising questions whenever something appears unclear or uncertain. Active participation is essential to exercising the duty of care.
    Duty of Loyalty
    Conflicts of interest, including the perception of conflicts of interest, must be avoided. This includes internal conflicts of interest or conflicts with other organizations that are connected to a board member. Disclosure.
    Duty of Obedience
    Obedience to the organization’s central purposes must guide all decisions. The board must also ensure that the organization functions within the law, both the “law of the land” and its own bylaws and other policies.
  • Examples and ideas
  • Ira oct 2010

    1. 1. Building a Board That Adds Value to the Organization Presented by Berit M. Lakey, PhD
    2. 2. Objectives • To develop a shared understanding of board roles and responsibilities • To clarify the roles of board and CEO, of governance and management • To identify board structures and practices that add value to the organization and makes good use of what board members bring to the table • To discuss steps in the process of developing an effective board
    3. 3. • When you decided to run for election to the board, what were your expectations – About the work of the board? – About your own participation?
    4. 4. The board of a not-for-profit organization holds the organization in trust on behalf of the public interest. The board serves as the organization’s legal and moral guardian and as such is responsible for ensuring the current and future welfare of the organization and its mission.
    5. 5. Board is Charged with Organizational Governance “To govern is to lead, to influence, and to control from a position of authority. Governance deals with the legitimate distribution of authority throughout a system – whether a country or an organization.” --BoardSource Governance: The process of decision making and ensuring that decisions are implemented
    6. 6. To Deal with the Challenges out There, Just Being Good may no Longer be Good Enough • Ethics and Image • Laws and Regulations • The Economy, Financial Competition • Rapid Technological Change • Demographic and Cultural Issues • Scarcity of Time Available for Volunteer Activities
    7. 7. Good Boards • Competent stewards • Focus on fiduciary oversight and legal compliance • Operate effectively and ethically • Works well with the CEO Great Boards Add • Active engagement, a diversity of information sources, search for meaning and exploration of implications, and independent decision making • Open and honest communication among the members and with the chief executive • Passionate support for efforts to pursue the mission • “The right people on the bus”
    8. 8. Board Governance Roles in the Not-for-Profit Sector • Establish Strategic Direction • Ensure Resources • Provide Oversight
    9. 9. ESTABLISH STRATEGIC DIRECTION • Develop and maintain focus on MISSION • Articulate the VALUES and POLICIES by which the organization will operate • Establish strategic direction – VISION of • the organization’s intended impact • what the organization will be like at some point in the future (3-5 years) – Strategic GOALS
    10. 10. ENSURE RESOURCES • Identify resources needed – Financial – Leadership (chief executive and board) – Reputation • Establish policies for how these resources will be acquired
    11. 11. PROVIDE OVERSIGHT • Program • Financial policies and practices • Laws and ethical standards
    12. 12. Board Responsibility for the Program • Once the board has established strategic goals, it needs to – Ensure that plans are made for how to reach the goals – Monitor implementation: are we doing what we said we would do and accomplishing our goals? – Evaluate the outcomes: Are we effectively meeting the needs we are here to address?
    13. 13. Board Responsibility for Financial Oversight • Approve the budget • Oversee financial management – Hold the chief executive accountable for legal and ethical financial operations – Review financial statements from a strategic perspective and make decisions necessary to safeguard the organization’s future health
    14. 14. Board Responsibility for Legal and Ethical Oversight • Ensure compliance with legal requirements • Safeguard the organization’s values • Avoid conflicts of interest • Ensure accountability for performance – The chief executive – The board, its members, and its committees
    15. 15. The Board and the CEO Partnership in Organizational Governance
    16. 16. Define the Partnership Board Engagement/Strength CEOCEO Is Displacing BoardIs Displacing Board GOVERNANCE ASGOVERNANCE AS OBSERVATIONOBSERVATION (ornamental board,(ornamental board, rubber stamp board)rubber stamp board) CEOCEO Is In ConstructiveIs In Constructive Partnership with BoardPartnership with Board GOVERNANCE ASGOVERNANCE AS LEADERSHIPLEADERSHIP CEOCEO Is Going through theIs Going through the Motions with BoardMotions with Board GOVERNANCE ASGOVERNANCE AS ATTENDANCEATTENDANCE CEOCEO Is Displaced by BoardIs Displaced by Board GOVERNANCE ASGOVERNANCE AS MICROMANGEMENTMICROMANGEMENT (subordinate executive)(subordinate executive) CEOEngagement/Strength
    17. 17. The Board/ Chief Executive Partnership • The board governs the life of the organization – Operates at the strategic policy level – Has ultimate responsibility – Is accountable to the organizations’ members and to the public trust • The executive coordinates and manages the affairs of the organization – Has immediate responsibility for operations – Is accountable to the board
    18. 18. Mutual Responsibilities of Board and Executive • Executive to Board – Accountability for organizational management – Strategic information – Listening and responding to board concerns • Board to Executive – Clarity of expectations – Feedback, annual performance review – Listening, confidentiality, advice as requested – Timely decision making
    19. 19. Leadership Expectations • Expectations must be clarified: –Is CEO an administrator who will basically do what the board dictates? –Is CEO the Association’s leader? –Is CEO a partner with the board in Association leadership?
    20. 20. Ingredients of an Effective Partnership • Agreement on respective roles • Communication! Communication! – Sharing of accurate and relevant information – Checking to ensure correct understandings – Listening to each other’s ideas and concerns – Clarification of mutual expectations – Direct and accurate feedback – Appreciation – No surprises!
    21. 21. CEO Assessment: A Key Board Responsibility • Ensure that it is done on a regular basis • Ensure that the assessment process is viewed by both the CEO and the board as fair and appropriate • Ensure that the assessment process is understood by the board and allows for board input • Ensure that it serves a developmental purpose, not as a report card
    22. 22. Board Relationship to Other Staff • Staff is accountable to the board through the chief executive • Board members do not direct the work of staff • Staff members should not use board members to advance their own interests or complain about each other or their boss • Board members should not get involved with staff issues or complaints • Board and staff share commitment to mission • Appreciation works
    23. 23. Board Meetings That Add Value
    24. 24. • What do you consider to be characteristics of a productive board meeting?
    25. 25. Impediments to High Performance Board Meetings 1. Ineffective deliberation & decision- making A. Rivalries B. Domination of the many by the few C. One-way communication D. Board members who have not read materials E. Too much, too little, or one-sided information F. Rubber-stamping 2. Lack of understanding of governance roles/responsibilities – Operational rather than strategic focus
    26. 26. High Performance Meetings: Engaging, Strategic and Outcome Oriented • Stated objectives or themes – connected to strategic plan and/or strategic challenges • Agendas structured for exploring implications of reports and ideas rather than for listening to reports – Use of consent agendas for routine business – Written reports and proposals • Well prepared board members • Making decisions and identifying next steps • Culture of inquiry approach
    27. 27. Culture of Inquiry: Fostering High Performance Timely information exchanges Differing viewpoints are sought and encouraged Assumptions are questioned and examined Outsiders are consulted to gain additional perspective and knowledge Questions are welcomed Board member expertise and perspective are recognized Ambiguity is tolerated Differing opinions are aired during robust discussions, but when a collective decision is made, it is supported by the entire board
    28. 28. What are ways in which your board meetings might add more value for the Association and for you?
    29. 29. High Performance Board Structures • Limit number of standing committees • Make use of ad hoc committees and task forces in order to respond strategically to issues and to make flexible use of board member time, interests, expertise, and learning needs • Ensure that all groups have a written job description and time frames for their work • Distinguish between governance committees and those that deal with implementation of IRA’s programs and services (Association committees)
    30. 30. • Use assignments to committees • and task forces for leadership development and board member education about issues facing the board and the association • Clarify the respective roles of board and staff involved • Require written reports to the board – Include on consent agenda if no board action is needed or if decision does not require discussion – Proposals should outline background, options considered, and rationale for proposed action • Avoid repeating committee discussions during board meetings
    31. 31. • What are examples of issues that might be referred to a task force?
    32. 32. Board Development
    33. 33. The Board Building Cycle IdentifyIdentify CultivateCultivate RecruitRecruit OrientOrient EngageEngage EducateEducate RotateRotate EvaluateEvaluate CelebrateCelebrate
    34. 34. Identify the Board’s Needs (a Board Responsibility) The mix you need to achieve strategic goals – Skills / knowledge / expertise – Perspectives / Life experience – Connections in the community – Access to resources – Personal characteristics • e.g., leadership ability, consensus builder, visionary, analytical thinker, creativity, follow- through, honesty, effective communicator
    35. 35. Cultivate and Recruit Potential Board Members (Nominations Committee Responsibility) • Finding and preparing new board members requires active involvement on an ongoing basis • Let Association members and other potential board members know about the roles and responsibilities of the board and what it means to be a board member • When seeking nominations, be clear about board meeting schedules and participation on committees
    36. 36. Orientation / On-boarding  To the Association: mission, values, programs, history, bylaws, strategic plan, pressing issues, finances, facilities, organizational chart  To the board: recent minutes, committees, board member responsibilities, list of board members and contact information
    37. 37. Orient New Members To the Public Trustee Role – Duty of Care Board members must exercise due care in all dealings with the organization and its interests. Active participation is essential to exercising the duty of care. – Duty of Loyalty Conflicts of interest, including the perception of conflicts of interest, must be avoided. Confidentiality policies – Duty of Obedience Obedience to the laws of the land and the organization’s central purposes must guide all decisions..
    38. 38. Engage Board Members Effective Use of Board Meetings, Committees and Task Forces • Identify board member interests, skills, and knowledge, • Involve and challenge them through committee or task force assignments • Support individuals in the exercise of their responsibilities and hold them accountable • Make sparing use of the Executive Committee in order to avoid creating a two-tiered board
    39. 39. Conversations What are effective ways for making use of what each board member brings to the table 1. In preparation for board discussions 2. During board discussions
    40. 40. Educate the Board • Use annual agenda to ensure in-depth consideration of each key aspect of the organization’s work. • Invite staff, outsiders, board members, or committees to share in depth information with the board on issues that might have an impact on the organization’s performance • Involve board members in discussing implications for the Association of information shared
    41. 41. Evaluate Board Performance • Effective board development requires periodic check-ups and tune-ups • The goal of board evaluation is further development and plans for improved performance • A board evaluation should be educational and help strengthen board communication • All board members should be asked to participate in the assessment
    42. 42. Celebrate Accomplishments! • Support the development of the board as a team by acknowledging and celebrating accomplishments – In the life of the organization – In the life of the board – In the lives of board members • Be creative and have a good time!
    43. 43. Board Development – Whose Responsibility? It’s a big job and needs to be a team effort between • The Nominations Committee • The Governance Committee • The board chair • The chief executive
    44. 44. Boards are Dynamic Organisms • How responsibilities are carried out will change as the organization changes – Size of budget, staff, program – Program visibility and reputation • The organization changes as the environment changes – economy, political situation, educational trends • A board must be responsive to changing needs – What worked in the past may no longer be effective – Keep growing and developing!
    45. 45. • Please identify what might be done to make the Nominations Committee aware of – the diversities of background, experience, and knowledge base needed on the board – the information that needs to be shared with everyone who is interested in being nominated for a seat on the board
    46. 46. Next Steps • Based on the work we have done together today, what – What actions should be taken to strengthen the board and help it add more value for the Association? – By whom? – By what time?
    47. 47. Farewell and Best Wishes! Berit M. Lakey, PhD Senior Governance Consultant BoardSource Phone # direct: 301-593-0335 beritlakey!