EFFECTIVE BOARDSMark VentryExecutive Director,Ontario Co-operative Association
INTRODUCTIONS• Roundtable: – Identify: Your name, please! – Define: What does “effective board” mean to you? – Explain: What is your role on/with a board of directors?
What does “Effective Board” mean?• Provide clear direction • Accountability and financial understanding• Have Sufficient resources • Mentoring and support to each other• Prudent oversight • Willingness to learn; ongoing education• Don’t micromanage • Set policy not procedure• Use action item lists: Did I do my tasks? • Sit in different chairs at each meeting• Effective communication between board • Good listening skills and management • Embrace diversity• Ability to debate, discuss and disagree as a • Keep board and management duties separate board, then move forward • Respect board confidentiality• Establish committees to move forward as • Maintain a board “memory” (some longer required term directors, for example)• Positive relationship between staff and • Commitment membership • Host ‘blue sky sessions’ now and then• Remain true to vision, mission • Manage succession planning and turnover• Act in the best interests of co-op & • Be aware of differences between operational members and governance boards Summary of comments made at London Regional Co-op Conference, October 30, 2012
• Clarity: Types of boards: governance, operational …• Consideration: Changes in a board over the lifecycle of organization: start-up, established, renewal, growing …
• Types of boards: governance/policy, operational …• Be aware of changes in a board over the lifecycle of organization: start-up, established, renewal or growing.• Co-op boards must be accountable to members and abide by co-op principles• Triple bottom line: social, environmental, economic (people, planet, profit)
ROLE OF BOARD AND DIRECTORSFour key areas: BOARD: – Leadership What is to be achieved? For whom and at what cost? – Stewardship MANAGEMENT: – Monitoring How will it be achieved? – Reporting BOARD “owns” Vision, Mission and Values (the ‘ends’) MANAGEMENT “owns” Strategic Plan (the ‘means’) It is far more difficult to lead than to do!
VISION, MISSION AND VALUESVISION:Where do we want to be in the futureMISSION:Why do we exist? And for whom?VALUES:What essential beliefs guide our decisions/actions?
KEY SUCCESS FACTORSAn effective board has … Outstanding leadership Unquestioned legitimacy and effective power Enlightened definition of function, role and responsibilities Outstanding competence A supportive, functional culture; and Efficient management of function, structure and process From: MAKING BOARDS WORK, Richard Ivey School of Business, University of Western Ontario, Canada
DIRECTORSHIP COMPETENCE MAP Strategic Leadership planning & thinking Finance Directing change Co-op Business know-how Dealing with& industry people Boardroomknowledge practice Market Being a Director Corporate Teamworkawareness Influencing governance & negotiating Personal Self development perception Presentation Judgment & decision making Managing Interpersonal workload & communication pressure
ROLES: Board• Trustees for membership• Ultimately responsible for legal and regulatory compliance• Hire and supervise CEO/GM/ED• Strategic planning• Financial overview• Set policies• Ensuring own effectiveness• Agree/Disagree: What else?
ROLES: Management• Implement financial controls and management• Implementation of policies and board directives• Day to day operations of organization• Hire and supervise staff• Create practices• Agree/Disagree: What else?
EMPOWER & EDUCATE DIRECTORS• Provide new Director orientation• Provide ongoing board training/education to all board members• Hold an annual planning retreat; develop plans, deepen relationships• Role of an Environmental Scan• Review and monitor strategic plan regularly; awareness of organization and its goals• Encourage board members to proactively share ideas for enhancing the organization’s and the board’s effectiveness• Do not set the stage for the board to rubber stamp staff initiatives!
Board Recruitment and Succession Planning 1 of 2Where it starts, or where change can really be effective!!Role of the Nominating and/or Governance Committee • Develop a list of the expertise and skills required • Create an inventory/matrix • Communicate the skills desired and pursue candidates • Part of ongoing membership communication • Treat recruitment as a serious task; develop a plan and timeline • Develop a plan to increase the skillset of existing board members
Board Recruitment and Succession Planning 2 of 2Role of Youth • Youth Director - vote/non vote, (token???), path to/from Youth Committee, etcDiversity – • Is the board reflective of membership • Skillsets, capabilities and attributes of board membersBoard Terms • Maximum terms – useful? • Knowing when to leave, before being asked.
Conduct Effective Meetings 1 of 4An Effective Chair…• Will help the Board fulfill its role in a timely and sustainable manner.• Is Task and goal focussed• Understands the organization’s and/or sectoral issues• Is focussed on people: awareness of speaking and personality styles; encourages contributions• Is conscious of succession planning; mentoring for the role; board member aspirations to advance• Is in effective and regular communication with Management
BARRIERS TO EFFECTIVE GOVERNANCE Ineffective leadership “Representational mindset” Lack of sustained commitment to Vision, Mission, Values Unclear definitions of functions, roles and responsibilities Lack of clarity between role of management & Board Lack of mutual trust within Board and between Board & Mgmt Imbalance of skills/competencies Poor information management (too much/too little) Burnout of Board members Turnover of Board members and little/no corporate memory Lack of succession planning
Conduct Effective Meetings 2 of 4Effective Agenda• Use a consent agenda (see next slide)• Allocate time, and then stay on time during meeting• Include background information in package.• Make pre-reading mandatory• Have package in directors’ hands 7+ days in advance• Monitor discussion, call for vote when discussion repeats or gets off topic• Put largest board issues at the beginning of the agenda; less consequential matters at the end of the agenda.
Consent AgendaA consent agenda (called a “consent calendar” by Roberts Rules) isa bundle of items that is voted on, without discussion, as a package.It differentiates between routine matters not needing explanationand more complex issues needing examination.The main purpose of a consent agenda is to liberate boardmeetings from administrative details, repetitious discussions, andmisdirected attention. The main benefit is better governance.Consent agendas allow the board to regularly dig deeper onstrategic issues rather than take a superficial pass on a lot of issues.More information: http://www.boardsource.org/Spotlight.asp?ID=116.365More information and an example: http://www.help4nonprofits.com/UseItToday/UseItToday-Consent_Agenda.htm
What Belongs on a Consent AgendaTypical consent agenda items are routine, procedural decisions, anddecisions that are likely to be noncontroversial. Examples include:• Approval of the minutes;•Final approval of proposals or reports that the board has been dealing with for some time and all members are familiar with the implications;•Routine matters such as appointments to committees;•Staff appointments requiring board confirmation;•Reports provided for information only;•Correspondence requiring no action. Board packages must be complete and sent out in advance so that directors are aware of agenda items and can read their material!
How Are Consent Agenda Items Typically Handled?• At the beginning of the meeting, the chair asks members what items they wish to be removed from the consent agenda and placed on the regular agenda for discussion.• If any member requests that an item be removed, it must be moved to the regular agenda without further discussion.• The chair asks for adoption of the consent agenda, and then moves on to the next regular agenda item.• When preparing the minutes, the Secretary includes the full text of the resolutions, reports or recommendations that were adopted as part of the consent agenda.It is important to make sure that all directors know what items belong on the agenda and how to moveitems to and from the consent agenda. For this reason, instruction on using the consent agenda shouldbe part of the board orientation program.
Conduct Effective Meetings 3 of 4Effective Minutes• Reflect substance of the discussion and result (action, motion, to table, etc.)• Consider using a recording secretary• Determine action items from each meeting• In camera sessions – maintaining minutes?
Conduct Effective Meetings 4 of 4Use of Committees• Ad Hoc vs Core Committees• Use of operational committees to fill voids in management• Member and stakeholder engagement• Pathway to sitting on the board?
Board Best Practices 1 of 41. FINANCIAL - Ask questions. As examples:• What concerns, if any, do you have about the financial position of the organization?• Please explain significant variances from the budget. (While income may be difficult to budget, expenses, in most cases, should match closely to expectations.)• Are you confident that cashflow from normal sources will be sufficient to meet needs in the foreseeable future? Determine key results areas, ratios or other methods of ‘scoring’and monitoring the organization financially.LEARN about financials, from your Chair, other board members withfinancial expertise or the treasurer or CFO.
Conduct Effective Meetings 2 of 42. MONITORING AND EVALUATING THE CEO• Balanced scorecard – BENCHMARKS - update on plans and direction; financial goals• Frequency - monthly, quarterly• CEO evaluation – quarterly, yearly (benchmarks)• When to look for a replacement
Conduct Effective Meetings 3 of 43. ESTABLISH A LESS IS MORE PHILOSOPHY• Facilitate a ‘Start, stop, continue’ exercise for board activities• When to consider: • Fewer board members (more work, but better relations?) • Fewer or shorter meetings (become more focussed on what is important; downside…?)• Spend less time on operations and board roles (fundraising, committees, etc)
Conduct Effective Meetings 4 of 44. TAKE EVALUATION SERIOUSLY• Self evaluation and/or board (group) evaluation • Expectations – what to do with the results • Frequency (after each meeting, quarterly, yearly) • Process – public, confidential, use facilitator, use an off the shelf solution• How to move from survey results to an action? • …Otherwise, why bother surveying…• Revisit action plan quarterly
Promote Member EngagementDiscussion: How to get member buy-in