Redirecting Boards: Redirecting Boards: Getting it Right Makes All Getting it Right Makes All

the Difference in the Worldthe Difference in the World

Common Good VermontCommon Good Vermont

WebcastWebcast

March 8, 2011March 8, 2011

““Effective governance by the board of Effective governance by the board of a nonprofit organization is a rare and a nonprofit organization is a rare and unnatural act.”unnatural act.”

- - Chait, Taylor & Ryan, from: Chait, Taylor & Ryan, from: Governance as LeadershipGovernance as Leadership: :

Reframing the Work of Reframing the Work of

Nonprofit BoardsNonprofit Boards

Boards are:Boards are:• Awash in an endless stream of short-term Awash in an endless stream of short-term

matters and are not focused on the big matters and are not focused on the big goals, the basic values, the dreams;goals, the basic values, the dreams;

• Ineffective because the traditional things we Ineffective because the traditional things we ask boards to do are archaic, irrelevant and ask boards to do are archaic, irrelevant and even if done well, often unnecessary; andeven if done well, often unnecessary; and

• Lacking in the accountability to a bottom line Lacking in the accountability to a bottom line that would focus their efforts.that would focus their efforts.

- - John CarverJohn Carver Governance Governance ConsultantConsultant

Wrong-Headed Wrong-Headed Assumptions about the Assumptions about the

Roles of BoardsRoles of Boards

Dictionary Definition of Dictionary Definition of BoardsBoards

A board of directors is an A board of directors is an “organized body of “organized body of administrators” who “supervise, administrators” who “supervise, control, or manage.”control, or manage.”

This definition is archaic and an This definition is archaic and an invitation for disaster.invitation for disaster.

To govern, not To govern, not managemanage

Not to direct the work or make Not to direct the work or make operational decisions (manage). Rather, operational decisions (manage). Rather, governance is a separate process and a governance is a separate process and a distinct part of leadership. Board distinct part of leadership. Board governance relates to decisions that: governance relates to decisions that:

1) define expectations, 1) define expectations,

2) grant power, and 2) grant power, and

3) verify performance.3) verify performance.

““Ah, the temptation is great – but Ah, the temptation is great – but keep your hands out of the keep your hands out of the operation! Trustees are not to operation! Trustees are not to manage the institution, but to make manage the institution, but to make certain that it is managed well.”certain that it is managed well.”

- - Jerald PanasJerald Panas

If you don’t want board members If you don’t want board members involved in the daily business of involved in the daily business of the organization, why give them the organization, why give them an invitation by reporting to an invitation by reporting to them about daily activities?them about daily activities?

- - Anonymous Anonymous AdministratorAdministrator

Shared LeadershipShared Leadership

Executive staff manages, Executive staff manages, board governs – acting as a board governs – acting as a steward, trustee, and steward, trustee, and fiduciaryfiduciary

StewardSteward

The board protects the assets The board protects the assets (tangible, intangible) of the (tangible, intangible) of the stakeholder (client, donor, stakeholder (client, donor, funder, public) ownershipfunder, public) ownership

TrusteeTrustee

Develops and monitors policies, Develops and monitors policies, sets a future strategic direction sets a future strategic direction on behalf of the beneficiary – on behalf of the beneficiary – acts in the trust of the long-term acts in the trust of the long-term public good.public good.

FiduciaryFiduciary

Protects the financial well-being Protects the financial well-being and solvency of the nonprofit and solvency of the nonprofit organizationorganization

A More Modern Way to A More Modern Way to Look at the Role of Look at the Role of

BoardsBoards•StewardSteward

•TrusteeTrustee

•FiduciaryFiduciary

•To govern, not manageTo govern, not manage

•Shared leadershipShared leadership

What Must Boards What Must Boards DO?DO?

What legal duties What legal duties must be followed?must be followed?

Five Functions a Board Five Functions a Board Must DoMust Do

• Plan STRATEGICALLY toward the futurePlan STRATEGICALLY toward the future

• ESTABLISH POLICY that guides the organization ESTABLISH POLICY that guides the organization and articulates the values that form these future and articulates the values that form these future strategiesstrategies

• HIRE AND FIRE a CEO, evaluate, HIRE AND FIRE a CEO, evaluate, recognize/appreciate and support the executiverecognize/appreciate and support the executive

• ADVOCATE for and champion the nonprofit’s ADVOCATE for and champion the nonprofit’s causecause

• FUNDRAISE AND FRIEND-RAISE to ensure that FUNDRAISE AND FRIEND-RAISE to ensure that the organization has enough discretionary the organization has enough discretionary private donations to be effectiveprivate donations to be effective

Board and CEO Partnership:Board and CEO Partnership:

Sharing power, leadership Sharing power, leadership and responsibility. . . and responsibility. . .

Created through transparency and Created through transparency and trusttrust

“ “Nonprofits waste uncounted hours Nonprofits waste uncounted hours debating who is superior and who is debating who is superior and who is subordinate – board or executive subordinate – board or executive officer. The answer is that they must officer. The answer is that they must be colleagues. Each has a different be colleagues. Each has a different part to play. Their tasks are part to play. Their tasks are complementary. Thus, each has to complementary. Thus, each has to ask, ‘What do I owe the other?’, not ask, ‘What do I owe the other?’, not as board members and executive as board members and executive officers tend to do – ‘What does the officers tend to do – ‘What does the other one owe me?’ The two have to other one owe me?’ The two have to work as one team of equals.”work as one team of equals.”

- - Peter DruckerPeter Drucker

““The relationship between the Board The relationship between the Board President and the Executive Director is President and the Executive Director is one of responsible partnership. Like one of responsible partnership. Like all human partnerships, this one has all human partnerships, this one has moments of tension and difficulty. moments of tension and difficulty. Mutual trust, respect and courtesy will Mutual trust, respect and courtesy will go a long way toward minimizing any go a long way toward minimizing any difficulties that arise.”difficulties that arise.”

-- -- Board PapersBoard Papers

PPFA Western PPFA Western RegionRegion

““The president is not the The president is not the executive director’s superior – executive director’s superior – that’s the entire board’s role. I that’s the entire board’s role. I think working partner is the think working partner is the way to view the relationship.”way to view the relationship.”

- Anne Saunier, OD - Anne Saunier, OD consultantconsultant

Ways to Make the Ways to Make the CEO/Board Partnership RealCEO/Board Partnership Real

• Partners in Leadership, Marlboro College, March 18 Partners in Leadership, Marlboro College, March 18 in Brattleboro . . . A day long workshop for Exec in Brattleboro . . . A day long workshop for Exec Directors and Board ChairsDirectors and Board Chairs

• Board Development and Education Retreat. . . Board Development and Education Retreat. . . Focusing on your organization’s governance Focusing on your organization’s governance practices and making them betterpractices and making them better

• Untied Way’s offering board events, for example, Untied Way’s offering board events, for example, in Brattleboro, helping people prepare for being in Brattleboro, helping people prepare for being board membersboard members

• Books, webinars, BoardSourceBooks, webinars, BoardSource

Consultant Recommendation:Consultant Recommendation:Follow John Carver’s Follow John Carver’s CommandmentsCommandments1)1) Govern proactively by values, not Govern proactively by values, not

reactively by event specifics.reactively by event specifics.2)2) Four key areas board should construct Four key areas board should construct

values:values:• endsends• staff meansstaff means• board-staff linkboard-staff link• board processboard process

3)3) Boards must spend most time on ENDS.Boards must spend most time on ENDS.4)4) Board addresses STAFF MEANS by Board addresses STAFF MEANS by

constraints only (e.g. go until we have constraints only (e.g. go until we have said stop).said stop).

John Carver (cont.)John Carver (cont.)

5)5) Board resolves issues with largest Board resolves issues with largest impact, CEO decides everything else.impact, CEO decides everything else.

6)6) CEO position exists to accomplish CEO position exists to accomplish ENDS without violating STAFF MEANS.ENDS without violating STAFF MEANS.

7)7) Routinize evaluation of CEO on their Routinize evaluation of CEO on their performance against the ENDS goals performance against the ENDS goals and honoring of MEANS constraints.and honoring of MEANS constraints.

8)8) Board agendas focus more on future Board agendas focus more on future than reviewing past and look outside than reviewing past and look outside organization more than insideorganization more than inside

Ten Quick Ways to Ten Quick Ways to Improve Board MeetingsImprove Board Meetings

1)1) Nametags, name tents on tableNametags, name tents on table2)2) Acronym chart posted in roomAcronym chart posted in room3)3) Write “anticipated action” for each Write “anticipated action” for each

agenda itemagenda item4)4) Everyone speaks at least onceEveryone speaks at least once5)5) No one-way communication from No one-way communication from

staffstaff

Ten Quick Ways Ten Quick Ways . . . . . . (cont.)(cont.)5)5) Only include committee reports when Only include committee reports when

they relate to board action itemsthey relate to board action items6)6) Leadership – include a big picture or Leadership – include a big picture or

significant change at every meetingsignificant change at every meeting7)7) Encourage dumb questionsEncourage dumb questions8)8) Make sure room is comfortable and Make sure room is comfortable and

feed the troopsfeed the troops9)9) Adjourn on time or agree to stay Adjourn on time or agree to stay

laterlater

Mixing the AgendaMixing the Agenda

Head/Heart itemsHead/Heart items

Rotate Rotate discussion/debate/presentationdiscussion/debate/presentation

Remember whose meeting it isRemember whose meeting it is

Four Metals that Make Four Metals that Make for Better Board meetingsfor Better Board meetingsGolden Rule: Golden Rule: keep meetings as keep meetings as informal as possibleinformal as possible

Silver LiningSilver Lining: do not require unanimous : do not require unanimous decisionsdecisions

Brass RingBrass Ring: Run board meetings with : Run board meetings with common sense and good group processcommon sense and good group process

Iron GloveIron Glove: Avoid factions and personal : Avoid factions and personal politicspolitics

““Selected objectives for the ideal board Selected objectives for the ideal board member: know why the organization member: know why the organization exists, and annually review why it should; exists, and annually review why it should; give money, or help get it, or both; face give money, or help get it, or both; face budgets with courage, endowments with budgets with courage, endowments with doubt, deficits with dismay and recover doubt, deficits with dismay and recover quickly from a surplus; interpret the quickly from a surplus; interpret the organization’s work to the public and organization’s work to the public and words syllables; combine a New England words syllables; combine a New England sense of obligation with an Irish sense of sense of obligation with an Irish sense of humor.”humor.”

- - Michael DavisMichael Davis

Rosewald FundRosewald Fund

Jim LeFevreJim LeFevrewww.LeFevreAssociates.com

email: email: jimlefevre1@gmail.comPhone: 802-922-8659Phone: 802-922-8659