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FROM THE BOARD DOCTOR
4/21/2017 12:00 AM

One Oregon nonprofit board recently had a painful reminder why its director should always be invited to the board meeting, said Jeff Stratton, The Board Doctor.

There is a reason I rail against boards that meet in executive session without their executive director. Here’s a story that should remind everyone that this is a bad practice:

“My board met with an employee and fired him—illegally,” said an Oregon administrator. The board had no documentation to back up its dismissal of the employee; in fact, the employee had never heard from anyone that he was doing a poor job.

The reason for the board’s actions, the administrator said, is that one board member didn’t “like” the employee at a time when money was tight at the nonprofit and layoffs were coming.

Not only did the employee start screaming about this, but so did the organization’s attorney and insurance company. The organization lucked out because all the employee wanted was his job back and his attorney’s fees paid, the administrator said.

“This taught me a lesson,” said the executive director. “Never let the board personnel issues belong to the executive director.”

There are really only a few good reasons a board should ever meet without its administrator present. You should review them, as should your board. They are:

  • when discussing the CEO’s annual performance evaluation and compensation;
  • when discussing a corporate compliance issue where allegations have been made against the CEO;
  • at the end of the audit review so the board can ask questions of the auditor without employees present; and
  • if there is an allegation of sexual harassment against the administrator.

Sincerely,

Jeff Stratton, Editor

Board Chair
4/14/2017 12:00 AM

Judy Freiwirth, Psy.D., principal of Nonprofit Solutions Associates and chair of the Alliance for Nonprofit Management’s Governance Affinity Group, discusses the results of the recently released study Voices of Nonprofit Board Chairs in this B&A feature article.

A groundbreaking study of nonprofit board chairs has uncovered some fascinating details about how chairs prepare for the position, as well as provocative information about their relationship with the chief executive officer.

Judy Freiwirth, Psy.D., principal of Nonprofit Solutions Associates and chair of the Alliance for Nonprofit Management’s Governance Affinity Group, was part of the research team that recently released the study Voices of Nonprofit Board Chairs.

Freiwirth shares some of her observations about what she found striking in the results of Voices of Nonprofit Board Chairs:

  • There is a lack of chair preparation for the important role. “I think one of the main findings of the study that we heard from chairs was that they are generally not prepared for the role,” Freiwirth said.
  • This is interesting, she said, because of what is already known from other research: The board chair role is critical to the effectiveness of the board, how it runs and functions, its dynamics, the type of focus the board brings to its work and its effectiveness or lack of results.

    “So factor that into how little preparation the chair has before they assume the role,” Freiwirth said, and that can be viewed as worrisome.

    What was also interesting to the study’s authors is that many chairs learned how to chair a board by observing the board’s previous chair. “That concerned us,” Freiwirth said, “because the previous chair could be ineffective, and if that is true, it could possibly perpetuate more board dysfunction.”

  • Chairs have little access to research-based information on their role. Related to that, Freiwirth said, the survey’s authors were surprised at how little access board chairs had to resources such as books, magazines and newsletters or online materials on their role. “They weren’t reading about their role much at all,” she said.

    Compared to other issues related to board governance, there is comparatively little written about the role and even less that is research-based, she said. “What they are reading about is more practical in nature and not research-based on what actually works,” Freiwirth said.

  • Chairs don’t view community engagement as part of the chair’s work. “When asked about the board chair role in relation to the community, it was interesting that the chairs did not perceive their role to be connecting with community stakeholders or to be involved with advocacy or fundraising,” Freiwirth said. The risk in that, she said, is that the board can become too insular and isolated if the chair perpetuates that belief. This has the ability to affect how the board connects with its constituents, the community and donors, she said.
  • “This was a significant finding for us,” Freiwirth said. That’s important, because a key aspect of the board’s governance role is community engagement, she said.

Other findings of note:

  • Many chairs assume the role within their first year on the board, and 55% within their first three years on the board. This didn’t surprise the study’s authors too much, but it does present risks to the organization and board.
  • “Often no one wants the chair role,” Freiwirth said. So whoever is persuaded to take it gets the top board position, she said. “This is all part of the chair’s lack of preparation for the role,” she said.

    The warning sign here in assuming the chair position early in board tenure is that the chair position is so critical. “That’s very worrisome,” Freiwirth said.

    If you have someone that is not prepared for the chair position, it again perpetuates more dysfunction on the board, particularly in its relationship with the CEO, Freiwirth said.

  • Why aren’t resources on the chair’s leadership role being accessed? “We hypothesized that much of the leadership material available is about the board’s role and responsibilities,” Freiwirth said. “There is so much material available on the board that it may be overwhelming and they don’t necessarily know how to find material focused on leadership.”
  • Many chairs (77%) identified themselves as supervising the CEO some of the time, with 40% stating much of the time. This may be a burden and a danger signal to boards.
  • Is that indicative of the CEO deferring too much to the chair? “The research shows us the chair/CEO partnership is important,” Freiwirth said. But it’s not a supervising relationship such as the one the CEO has with staff, she said.

    In the traditional model of governance, the chair assumes most of the leadership responsibility, Freiwirth said. The study’s authors have a recommendation for the board to consider to improve its effectiveness: Consider sharing the board’s leadership responsibilities among other members of the board, Freiwirth said.

For more information, email Judy@NonprofitSA.com; to download a copy of Voices of Nonprofit Board Chairs, go to http://boardresearch.strikingly.com.

Board Relationship
4/7/2017 12:00 AM

Use these B&A tips in your work with the board to improve board performance.

Venable LLP’s webinar “Enhancing the Nonprofit Governance Model: Legal Pitfalls and Best Practices” recommends that board members be placed into the best possible position to do their jobs effectively. Here are some tips on doing that:

  • Provide a legal perspective when introducing new board members to board service. “This will help board members fulfill their duty of care, for example,” said Venable LLP attorney George E. Constantine.
  • Take care with meeting materials. Materials for board members should be provided well in advance of meetings, be clear and be tailored to the board’s needs. “This is particularly true in the financial realm,” Constantine said.
  • Be informative in the data you provide. Use tools such as graphs and dashboards when communicating to the board. “This lets the board focus on their oversight function,” Constantine said.
  • Conduct regular strategic planning and big-picture exercises. The executive director should ensure that these types of activities occur in a regular cycle, Constantine said.
  • Provide plenty of time for board discussion at meetings. The executive director needs to allow ample time for discussions of financial matters in the meeting agenda, Constantine said.
  • Seek out what the board wants for information. “We’ve had to change reporting formats in response to what the board desires,” said DC Central Kitchen Executive Director Michael F. Curtin Jr.
  • Don’t be “turfy.” Let the board do its job. The CEO cannot afford to behave as if it’s a highly unusual request if the board wants financial documents, said Venable LLP attorney Jeffrey S. Tenenbaum.
Resource
3/10/2017 12:00 AM

This resource from Board & Administrator helps board members assess their engagement level with the organization.


Resources
2/24/2017 12:00 AM

In Brian Foss and the Horatio Alger Association’s book, Governing Effective Nonprofits in the 21st Century, board members can find a wealth of practical information about serving on a board.

Below, you’ll find a terrific job description for a nonprofit board member.

A Sample Board Member’s Job Description for Any Nonprofit

  • Understand and support the mission, programs and services of the organization.
  • Accept the responsibilities of being a fiduciary of a corporation that exists for the public good using tax-exempt, tax-deductible funds.
  • Make a multiyear commitment to participate actively in governance meetings and programs.
  • Be among the first, most generous and consistent annual donors.
  • Invite new people to become involved in the organization’s work and to contribute financially.
  • Assist other governance leaders in building relationships that will help the organization fulfill its mission.
  • Be a steward of the public trust and a trustee of the organization’s mission and resources.
  • Keep the board’s work focused on governance issues, policy creation and setting strategic directions for the organization’s future in a transparent and ethical manner.
  • Keep the board focused on effectiveness in fulfilling the mission and programs, and creating an organization that is best-in-class.
  • As a fiduciary, ensure that the organization is diversely funded, approve the annual budget and monitor fiscal affairs, conduct an audit annually, have fiscal controls in place, review IRS Form 990, and plan for the financial future of the corporation.
  • Ensure the board has policies in place regarding board and staff conflicts of interest, self-dealing and transparency.
  • Understand how the organization raises its funds and approve all of the fundraising practices and external contracts for fundraising.
  • Leave management matters to the organization’s CEO and help the board and staff continuously differentiate the roles of governance and management.
  • Be an advocate and ally for the CEO, assuming such support is merited. Participate in the hiring, nurturing and evaluation of the CEO.
  • Keep the board focused on the organization’s mission.

 

Source: Brian Foss, Governing Effective Nonprofits in the 21st Century. Reprinted with permission.

Resource
1/27/2017 12:00 AM

Use the following exercise from The Board Doctor to assess your board’s understanding of its role.

Use the following exercise to determine how clearly your board understands its role. Identify those areas where the board lacks either knowledge or information, and make plans to find them the training they need. Remember: An untrained board is a disaster (for the CEO) waiting to happen.

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  • Meet the Editor

    Jeff Stratton
    Editor

    Jeff Stratton has edited Board & Administrator since 1992. As the Board Doctor, he has advised thousands of executive directors and board members on issues like prevention of
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