Unlock Your Board’s Full Potential: 4 Keys to Effective Governance
The importance of a high-functioning and accountable nonprofit board of directors has never been greater. An effective board can mean the difference between expanding mission objectives and failed initiatives, between meeting constituent needs and shrinking programming, and between hitting financial goals and worrying about meeting payroll. An effective board is key to organizational success.
The necessity of an effective board, then, raises a number of critical questions. Most importantly, these questions concern identifying what steps a nonprofit might take to boost the return realized from its directors, and how a nonprofit professional might assist his or her board in helping its directors exceed expectations. While the answers to these questions will vary based on the nonprofit, four general themes emerge:
1. Context is Key
It goes without saying that goals and objectives are critical to the success of any nonprofit organization. Many organizations nevertheless fail to make adequate provisions to ensure that those charged with ensuring that goals and objectives are realized—the directors—are sufficiently fluent in the organization’s mission. Indeed, while directors are charged with general organizational oversight, it is important they understand context. A director of a nonprofit organization whose mission is to fulfill wishes for children facing life-threatening medical conditions would be hard pressed to understand the importance of his or her obligations unless he or she actually spent time in a hospital’s children’s ward interacting with affected families.
Context matters. Accordingly, nonprofits should make sure that their directors understand the consequences of their decision-making in the appropriate context, and to make sure that their directors are not making decisions in a vacuum. Directors should participate in programming on a regular basis.
2. Generate Accountability
Most nonprofit professionals recognize that board service obliges directors to exercise the duties of care, loyalty and obedience. These duties, however, are only a starting point, and the best boards go beyond the bare minimum, taking advantage of their directors’ talents. The best way to take advantage of those talents is to clarify expectations and standards and set metrics.
It is a hard fact of the human condition that most of us only work as hard as necessary except when called upon to do more. Unless we establish concrete standards and expectations, and develop metrics designed to measure whether those standards and expectations have been realized, it is difficult to determine whether we are taking advantage of the full breadth of our resources. For example, a board of directors tasked with making a personal financial commitment to the nonprofit it serves will likely disappoint. Conversely, asking directors to make a personal commitment of $1,000 is likely to generate full accountability.
Your directors are likely to flounder if they have to wonder what the organization requires of them. People are generally happier and more productive when clear standards are established. Directors who understand what is expected of them are far more likely take ownership of their obligations and contribute accordingly.
3. Embrace Diversity
In some circles, the idea of embracing diversity amounts to a concession to mediocrity. However, nothing could be further from the truth—diversity is a necessary component of every truly effective board, and reflexively rejecting diversity based on antiquated ideas is likely to hobble your organization’s ability to fulfill its mission. Diversity promotes creativity, broadens perspective, leads to innovation and improves performance. Nonprofits should take pains to identify candidates for board positions based on a range of factors, including professional experience, education, age, gender, race and community affiliations.
Closely related to the theme of embracing diversity is the necessity of identifying strengths and weaknesses. The most effective boards comprise individuals with wide-ranging experiences and talents, who understand their role in moving the organization forward. A nonprofit arts board consisting entirely of artists, for example, is likely to experience significant difficulty navigating the accounting, legal and fundraising challenges all nonprofits generally face. It is important, then, that a board be able to call upon professionals who are able to navigate these channels. A proactive policy designed to embrace diversity is a step in the right direction.
4. Promote Leadership
Another hallmark of effective boards is that each director realizes his or her potential for leadership. It is a sad reality that nonprofit boards are often hindered by implicit hierarchies wherein one or two directors dominate discussions and drive policy. While a passion for the mission is important to any endeavor, and passionate directors are critical to success, permitting a small number of directors to drive organizational goals and objectives can actually injure the organization, as the full range of talents and experiences of other directors often go untapped.
Nonprofits should institute policies and take affirmative steps designed to avoid this outcome by creating opportunities for individual leadership. Each director should be tasked with at least one key initiative or committee assignment, and metrics should be developed to assist the director in tracking his or her progress. In short, every director should be encouraged to make the most of his or her talents and experiences, and to personally champion the nonprofit’s cause.
A board’s success is contingent on many factors. However, a nonprofit should keep in mind these four themes—context, accountability, diversity and leadership—when seeking to maximize the return from its board of directors. An investment in your directors is an investment likely to pay off.