Tips To Having a Successful Nonprofit.

Your boss just asked if you’d be willing to be nominated for a seat on the board of the local YMCA. You are flattered to be asked. You enjoy working out at the Y. You think this is great – maybe board members get to attend classes for free! You tell your boss you are interested, and a meeting is set up with the YMCA executive director.

As the meeting draws closer you realize you are unsure about what it means to be a board member. What exactly are the roles and responsibilities of a board member?

Your first responsibility is to find out the expectations of a board member and ensure you can meet those expectations. Learn all you can about the organization. Are their mission and values consistent with yours, such that you will become a passionate advocate for the organization? As a board member you’ll be asked to make your service to this organization your priority for the next several years.

You have a responsibility to give them your time, talent and treasure, the three “T’s.” What is the time commitment of a board member? You have a responsibility to prepare for and attend all board meetings. In addition to board meetings, both in person and remotely via conference calls, a board member is expected to participate in committee meetings/calls. There may also be events and community activities that board members are asked to attend. Understanding the time commitment prior to agreeing to serve is important. If a board member does not fully participate, they let their fellow board members and the organization down.

Giving your talent is your next responsibility. A well-planned board recruitment strategy results in a diversified board with skillsets needed to fulfill the mission of the organization. That likely means board members with finance, investing, communications, marketing, legal, human resource, strategic planning, event planning, fundraising, technology and/or programming expertise are needed at various times. When you meet with the organization’s director prior to agreeing to be nominated, determine if your expertise fits with a skillset needed on the board.

The last “T” represents your treasure or the financial commitment that comes with serving on the board. Every non-profit expects the board to take a leadership role in fundraising. Asking others to give without setting the example is difficult and may make the potential donor question why they should give if the board is not giving. Some boards have a minimum donation they ask from all board members. Others may ask each board member to give to their personal capacity.

So: you’ve met with the executive director, you know you can meet the expectations and enthusiastically agree to serve. Your first meeting is approaching, and in reviewing the pre-meeting materials, you feel a bit overwhelmed and start to doubt yourself. The financial statements look like they are in a foreign language. There is an investment presentation included that is confusing. The agenda includes program topics you were not even aware were part of the organization’s offerings. Don’t worry there is a board orientation before your first meeting. And you have been assigned a mentor who has requested a call prior to the meeting.

Set up a time to speak with your mentor. They will help you navigate the board meeting and help you feel comfortable. Also, you can ask them questions prior to meeting that you might be afraid to ask during the meeting.

Your First Meeting

Prior to your first meeting review all the materials provided in advance. Ask your mentor or the executive director any questions. Attend the orientation where you will likely hear about the history of the organization, review the financial statements, be provided with key documents such as the by-laws and key policy statements, meet staff and hear about which areas they are responsible for, and meet the officers of the board. The officers may explain the committee structure and their responsibilities. They may invite you sit in on the committees so you can decide which committees you would like to serve on. Or they may appoint you to a committee that fits your skillset.

Hopefully during the orientation, they will explain your roles and responsibilities. The primary legal responsibility of every board member is referred to as “fiduciary responsibility.” A board member should never do anything this or may be perceived as violating fiduciary responsibility or duty. It is your responsibility as a board member to serve as a fiduciary of the organization to ensure to the best of your ability its long-term viability.

The Cornell Law School Legal Information Institute website (http://www.law.cornell.edu/wex/fiduciary_duty) defines fiduciary duty as follows:

A fiduciary duty is a legal duty to act solely in another party’s interest. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals’ express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries’ other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system.

In your situation as a board member, you are a fiduciary for the organization who is the principal in the above definition. Whenever you are acting as a board member, you should ask yourself if you are acting solely for the benefit of the organization.

Most well-run organizations conduct their meetings in accordance with parliamentary procedure outlined in The Eleventh Edition of Robert’s Rules of Order Newly Revised. Often an organization’s by-laws specify that meetings and conventions be conducted in accordance with the latest edition of Robert’s Rules of Order. Prior to your first meeting, familiarize yourself with parliamentary procedure.

Familiarity with the basic parliamentary rules for meetings will make any new board member more comfortable in making motions, understanding when a “second” is required for a motion, understanding the rules of debate, and knowing how to end them by “calling for the question,” etc. Sounds like a foreign language, but once you understand the basics as outlined in the above short book, you will understand how to take part in the meetings more effectively.

Staff vs Board Member Responsibilities

Strong committee and board performance results from a partnership between staff and volunteer board members. Effective organizations have a clear understanding of their respective roles as they move the organization forward. To be clear, the only staff member who reports directly to the board is the executive director.

Generally, the board is responsible for hiring the executive director, providing feedback to the executive director, communicating expectations, conducting annual personnel evaluations, and rewarding their performance. When external issues arise, the board has the role of analyzing the situation and working with the executive director to handle public relations and respond as one voice supporting the executive director.

The key to success in the leadership team of the executive director and the board is the ability to understand the expectations of each other and to communicate frequently. Joint responsibilities include establishing the priorities of the organization based on the overall strategic plan. They also include defining the who, what, when, where and how’s of execution of the priorities. Jointly evaluating the activities and results is also important. Was the latest project worth the effort?

The best way to build relationships is to spend time together, even if it is telephonically. No surprises builds trust. Things will not always go as planned, but if the board member is kept informed, both parties can use their specialized knowledge to resolve issues together.

Volunteers have much to learn from staff, and staff have much to learn from volunteers. Each is in their position because of their specialized experience, knowledge, and skills. Many board members have experiences gained in the for-profit world that are applicable in the not-for-profit world. However, board members need to understand that they are not the CEO/CFO or chief anything of the non-profit and that the organization’s staff are not their staff. Mutual respect is critical for a successful board and staff partnership. Both groups are passionate about the mission of the organization, and only by working together can they fulfill the mission. The following chart clarifies board vs staff responsibilities:

Remember, your responsibility as a board member is to help set the strategic direction of the organization and oversee the financial results and controls—not to manage day-to-day operations. Your role is to develop the strategy, policies and procedures for the staff to execute. Stay out of the weeds and focus on the big picture and mission of the organization. Now go forth and serve, moving your organization forward.

The real challenge for directors of nonprofit boards isn’t regulatory compliance—it’s high performance. Most who serve on a nonprofit board have a passion for the organization’s mission, and they show up filled with good intentions. Too often, however, they don’t have clearly defined responsibilities, or directors disagree with management about what those responsibilities should be, or someone defined these duties long ago, and they no longer seem relevant. Now, more than ever, directors are taking their responsibilities seriously, speaking up, and striving for results; but in many cases, the evolving relationship between the organization’s management and the board has not found the right symmetry. Finding it will depend on everyone systematically examining how board members can have both high impact and high involvement.

The key to better board performance lies in the working relationships between directors and executives, in the dynamics of board interaction, and in the competence, integrity, and constructive involvement of individual members. Most people understand what boards should be: sources of challenge and inquiry that add value without meddling—champions of the organization that make CEOs more effective but not all-powerful. The high-performance board, like any high-performance team, is competent, coordinated, cohesive, and focused. Such entities do not simply evolve, however. An exacting blueprint—a plan for both high impact and high involvement must guide their construction.

This model addresses how directors and executives need to view nonprofit directors’ involvement and their role in overall effectiveness. Sometimes boards can enjoy effectiveness, even with low involvement. Boards that have their fingers in when they shouldn’t will be only minimally more effective than boards that stay out of everything. The key lies in appropriateness of involvement.

When involvement is inappropriately low, effectiveness will be low, too. Organizations in the Passive Board quadrant experience minimal board participation in decision-making. These directors also have limited accountability among themselves and find their primary duty to be ratifying the CEO’s decisions.

Passive boards meet at scheduled times but seldom schedule anything outside of those meetings. They overlook or ignore opportunities to meet with internal and external auditors, general counsel, or key managers. They don’t seek active participation in strategy formulation or attend to the leadership pipeline. Members fail to make themselves available to the executives in the company, so the experience and expertise of the directors languishes

Boards operating in the Laissez-faire quadrant manage to enjoy some effectiveness because they have learned to be involved on critical issues. For instance, they may devote time and attention to strategy formulation but then leave implementation to the company’s executives. Directors oversee CEO succession planning but trust most of the rest of the leadership pipeline to management. If the company has hired strong executives, directors don’t need much more engagement than the Laissez-faire Board offers.

Directors on these kinds of boards maintain credibility with stakeholders because they know the difference between the important and the unimportant and show up for the important. The board certifies that the business is managed properly and that the CEO meets the board’s requirements. Many CEOs have come to appreciate and desire a Laissez-faire Board, even though it’s not the most effective of the four options.

The expression among many executives is that directors should be “Noses in, fingers out.” In other words, these executives want directors who know what goes on but who stay out of the day-to-day management of the company.

Fingers-In Boards can exist in any situation, but they tend to surface during crisis. The board becomes deeply involved in making key decisions about the company and holds frequent, intense meetings. They intrude inappropriately, compromising both morale and effectiveness. They bother people. Frequently the Fingers-In Board focuses on tactics, not strategy. They can waste an entire meeting discussing a new label or brand—something that even the VP of marketing wouldn’t ordinarily spend time on.

These kinds of directors have been known to bypass the CEO and give direction to employees. They want deep involvement with decisions. They convene frequently, often without a clear purpose in mind. They lack effectiveness, primarily because they squander their time and energy on the non-critical instead of zeroing in on the critical efforts they should be addressing.

Directors on Stellar Boards serve as the CEO’s partners. They provide insight, advice, and support on key decisions. They recognize their responsibilities for overseeing CEO and company performance. Board members conduct substantive discussions on key issues and actively define their roles and boundaries. They fill gaps in executives’ experience and expertise, so they serve as a constant source of advice and wisdom.

When Stellar Boards meet, their agendas limit presentation time and maximize discussion time. Directors and executives take advantage of informal interaction among directors. Board members are honest yet constructive. They stand ready to ask questions, challenge leadership, and oversee CEO and organizational performance. Directors tell executives what they need to know and hold them accountable for results. Board members also actively seek out other directors’ views and contributions. They prioritize well and spend appropriate time on important issues.

Top performance on nonprofit boards starts with strong leadership—persuasive management leadership and influential board leadership. Too often, however, directors assume the role of sponges who simply absorb that which management puts in front of them. One of the key responsibilities of each director involves asking questions and showing independent thinking. These questions should stimulate dialogue and guide the process of making the implicit explicit—of making knowledge pragmatic advice.

To do that, board members need to receive the agenda and related materials in time to review them prior to meetings. During the meeting, board members should request and encourage discussion, not presentations. Between scheduled meetings, management should keep directors informed of major changes and important issues.

The next major leadership duty is to move the discussion to decisions—not necessarily consensus. The discussion should uncover all kinds of differing points of view, but ultimately the board needs to ask, “How will management use these insights to make necessary changes?”
Active, compliant boards and executives no longer offer organizations enough. Companies need and demand stellar performance from both individual contributors and the board as a whole.