November 18, 2017
 
Observations on What Makes Effective Boards

By Stephen J. Lemire

Stephen Lemire
While the by-laws of most nonprofits provide guidelines for board members to govern the organization, directors and trustees also function strategically and have a responsibility to embrace an external focus that ensures the entity functions well within the broader community.

Much of the effectiveness of nonprofit boards comes down to the people who sit on them and their working relationship with the executive director. A change in one board seat can alter the dynamics of this critical body considerably from one year to the next.

Having worked as an executive director with more than 20 boards, often with founding board members of mostly small healthcare and education organizations, has provided me with an informed perspective of board practices that can go a long way to ensuring organizational vitality. Here are some key lessons learned.

The Board’s View Is External and Long Term
  • It shall be guided by the mission.
  • It shall focus on governance, not operations.
  • It shall follow the direction of the strategic plan and amend it, as needed.
  • It shall be fully engaged in fundraising and development.
  • It shall participate in all policy and advocacy initiatives.
  • It shall not micromanage the executive director.
A common pitfall that may impact founding directors or trustees of a small staff nonprofit arises when board members are asked to provide some operating or managing functions. It can be difficult for these members to continue to balance long-range responsibilities with short-term duties. Also, this situation can lead to micromanaging the executive director, resulting in the ED having less time for brainstorming, reduced energy to lead, stifled creativity, and resentment.

The Board’s Functions Are Strategic and Defined
  • The board president is the external representative along with the executive director.
  • The board vice president supports the president and executive director on operational issues.
  • The executive committee and one or two other “rising stars” make up a strong core group.
  • Directors understand financial statements and are involved with budgeting and audits.
  • Directors are representative of the membership and are not homogeneous.
  • Board nominee recruitment is guided by skill sets needed at the board level (finance, policy, etc.).
  • Board nominee recruitment is also guided by personnel needed (key member, influential community representative, etc.).
  • The board has an organized and detailed orientation for new directors.
  • The board includes professional development on its agenda for board meetings.
  • The board conducts an annual self-assessment and acts on items identified needing improvement.
  • Directors have a succession plan for hiring a new executive director.
  • Directors act as hosts, rather than simply attendees, at all organization-sponsored functions.
Failure to follow these points may result in a board that is out of touch with its constituency, top heavy in some skill areas while lacking in others, or lacking a clear understanding of its legal and organizational roles and responsibilities. Common weaknesses for these boards include limited understanding of—and, at times, interest in—the organization’s finances including budgeting, financial statements, auditing, and IRS reporting needs.

The Board Has Internal Mechanisms to Structure its Governance
  • Directors must serve at least one term prior to becoming an officer.
  • Directors must serve at least one term as an officer before becoming president.
  • Officers serve one year terms with the ability to run for re-election for that office one time.
  • Directors serve three year terms; one-third of the board rotates off each year.
  • The optimum size of the board is 12-15 directors.
  • The immediate past president is ex officio and helps with transition issues for one year.
  • The executive director is an ex officio member of the board.
  • An emeritus board of past presidents helps on a per-project basis at the request of the president.
A board that does not have a regular inflow of new board members who bring fresh ideas and perspectives can become very stale. As a result, fewer board members tend to remain engaged and many of the responsibilities fall on the officers, while attendance and participation among others declines. In a well governed board, directors understand they have a limited opportunity to make an impact and appreciate that their volunteer commitment is purposeful.

While each organization differs from the next—based on whether its scope is local, regional or national, if it is a start-up or a mature organization, or if it is a community service provider or a professional association—many of these practices will help the board and its executive director create a fine-tuned leadership team.

Stephen J. Lemire provides consulting to small staff associations and nonprofits through 4Site 4Nonprofits. Contact him at slemire@4site4nonprofits.com or call 774-258-1894.
March 2012


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