Is your board of directors fulfilling its role? This article examines some of the issues that make it increasingly difficult for non-profit organizations to build an effective board of directors and provides some rays of hope for those beleaguered by this challenge.
The Institute of Directors in the United Kingdom has introduced the world’s first formal qualification program for corporate directors. While doctors, lawyers or accountants must adhere to a rigid set of qualifications, there have been no such expectations for corporate directors who make decisions that have an impact on hundreds or even thousands of lives. A “Chartered Director” will meet standards of knowledge and experience and agree to abide by a code of conduct. This development is drawing attention from across the corporate world. Is the nonprofit world ready to take its boards as seriously?
There are thousands of volunteer board members across Canada who make a remarkable contribution to nonprofit organizations. The board of directors, however, can be a curious feature of a nonprofit. It may include individuals who are hard-pressed to make the necessary time commitment, who are on the board because no one else would take the job, or who have a limited understanding of the issues confronting the organization. Would the Royal Bank have such people on its board of directors? Is the operation of a major charity any less important to the well-being of Canadian society?
How do we create an effective board of directors? This is one of the most perplexing questions that nonprofit organizations grapple with, no matter what board model is in place. A director’s position is increasingly complex and it is ever more difficult to attract the people best suited to the job.
A nonprofit board of directors (arguably, of course) has three functions: to create a clear statement of purpose for the organization, to support the achievement of that purpose, and to be accountable for operating the organization in a legal and ethical manner. These are serious and demanding obligations.
Competition for good help can be fierce
Do Canadians have the collective capacity to meet these obligations? There are more than 75,000 registered charities (including religious organizations) and a multitude of other nonprofits in Canada. A modest estimate would be eight board members per organization, or more than 600,000 board members across the country. If you have recently been struggling to find directors for your own board, you know what a mind-boggling challenge this figure represents.
Meals on Wheels in Sudbury, Ontario recently reduced the size of its board from 12 to 7. For her organization says Executive Director Angele Poitras, this not only creates a more functional team but it also frees up people who might previously have been on the board to take on other important and time consuming projects. The optimal size for a board varies considerably depending on the nature of the organization, but it is an issue worth reviewing.
Successful boards recognize that ongoing effort is required to sustain that success. A board of directors requires nurturing and pruning, much as a vine does to blossom and be fruitful. The three key items to address are recruitment, development, and evaluation. When careful attention is given to each of these, a board can provide the excellence in leadership that is vital to the organization’s success.
Recruitment — the first and biggest step
Good recruitment is the essential first step to a good board. It is much easier to recruit a good board member in the first place than it is to make a strong board member from a weak candidate. The B.C. Children’s Hospital Foundation has 30 directors. Michael Allen, assistant to the president, describes board recruitment for his organization as a “year round task.” The three universal requirements for a good board member are passion, understanding and time. Any two without the third is insufficient.
Passion for the cause and the organization is necessary to sustain commitment. Most people divide their loyalties between career, family and personal interests. The added responsibility of board membership can become a low priority unless it is accompanied by a profound belief in the importance of the work.
One caveat when assessing the passion of prospective board members: there are two kinds of passion — rational passion, manifested by a willingness to make personal sacrifices for the benefit of the organization, and irrational passion, when a person’s apparent commitment is based on unmet needs for power or personal connection. In the latter case, the person expects to have these needs fulfilled by the organization. Unfortunately, this often becomes clearer with every passing board meeting. When interviewing a potential board member, it is critical to assess which type of passion is present.
Make sure your prospects have a solid overall understanding
Like the proverbial committee of blind men grasping at the elephant, board members may only grasp one element of the organization. A lawyer may only understand the legal aspects; an accountant may only understand the financial picture. It is a cherished board member who has an overall understanding of the complexity of the organization.
Lou Zaganelli walks on both sides of the nonprofit world. He is an experienced social worker and the director, resource development, for Hull Child and Family Services in Calgary. He’s also a volunteer board member for the Alberta Alcohol and Drug Abuse Commission (A.A.D.A.C.). Despite his wealth of experience, he found “it took me a year of serving on A.A.D.A.C.’s board to get fully up to speed on the organization’s issues.” His story is repeated by many other individuals with the same high degree of competence.
When assessing a prospective board member’s understanding of the organization (or their potential to understand it), recruiters can ask the candidate how he or she might respond to some of the issues that have come to the board in the previous years. This will also be a measure of the “goodness of fit” with existing board members.
Make them aware of the time commitment before the hop on board
One of the first casualties in a time-pressured society is the ability to make intensive and long-term volunteer commitments. The 1997 National Survey of Giving, Volunteering and Participating indicated that while more people are volunteering, they are doing so on a project- specific and time-limited basis. This is diametrically opposed to the need for board members who can make a multi-year commitment of significant intensity. Two to three years is generally considered the minimum time commitment for someone serving on a board.
When interviewing potential board members, recruiters need to be very clear about the time commitment required and potential board members need to make a careful assessment of their ability to meet this commitment. Directors on the B.C. Children’s Hospital Foundation are expected to sit on two board standing committees, attend board meetings and are encouraged to attend Foundation special events. Assessing the candidate’s track record in meeting such commitments is an important part of the recruiters’ role. David Cohen, executive director of the Jewish Foundation of Manitoba, finds that having potential board members serve on committees is a great way to both assess people’s capacities and educate them about the organization.
Ideally, people should aspire to a board position. When an organization creates a high profile and positive image in the community, board recruitment becomes a much easier task. Cohen’s organization has established a solid reputation for excellence so that it has the enviable luxury of choosing who will sit on its board. He believes that boards need to be clear about their needs before they begin recruiting and stresses the importance of creating the right mix of people on the board.
Who should be responsible for board recruitment? Certainly, the board of directors itself has the formal responsibility. A good measure of a board’s performance is how well it takes on the recruiting task. It is rare, however, when the executive director is not drawn into the process at some level. Executive directors may suggest potential new board members, but they have to be careful to avoid conflicts of interest or even perceptions of conflict. It is in his or her interest and the interest of the organization to have the very best “boss” possible.
Board development is necessary to keep the foundation solid
The board of directors is, by definition, ultimately responsible for the operation of the organization. However, a board is both a “collective boss” and a “transient boss” that changes from year to year. The board’s perspective may even change from meeting to meeting with the presence or absence of certain members. The limited time that the board is together has a further impact on its capacity to be effective. Is it any wonder that a board can be a source of frustration and demand? A board development program is essential to counteract these factors.
Board development has two distinct tasks. The first is to educate board members on the “hard” items, such as service delivery, funding and liability issues, and accountability requirements. Faye Wightman, president of the B.C. Children’s Hospital Foundation, succinctly emphasizes the importance of this task: “The decisions your board makes are only as good as the information you provide them.” David Cohen spends a lot of his time “chatting” with board members. He wants to keep them well informed and help them be credible speakers on behalf of the organization.
It is vital to provide new board members with a thorough orientation at the beginning of their term. Cohen holds the orientation separately from a board meeting to ensure that sufficient time and attention is available. The orientation for new members of the B. C. Children’s Hospital Foundation is four hours long. Meals on Wheels Sudbury provides each new board member with an orientation manual that is updated annually. For these organizations, the orientation is an important element of their success. Throughout the year further educational sessions should be scheduled to keep the board up to date on emerging issues.
Don’t forget about the soft issues in team development
The second and far more difficult task is to address the “soft” issues of intra-personal understanding and inter-personal relationship skills that are necessary for the board to be a cohesive work team. While a board development program is not group therapy, a palpable level of trust and respect must be established among board members. It is a primary function of the board president to ensure that this is addressed. A strong board president is as much an expert in human relations as an “issues” expert.
Experience shows that when boards have consensus on their decisions, they operate from a much stronger position. People who know and understand each other have an easier time reaching consensus. A cohesive team can be achieved through structured opportunities, such as team development exercises, or unstructured opportunities, such as informal social activities. A board retreat offers one means to build the team without the distractions of other obligations. Meals on Wheels has an annual retreat for board and staff together. Poitras believes that this has helped immensely in getting everyone to understand each other and keep a common focus.
This “soft” aspect of board development is most important when an organization is in crisis. Differences that might have been submerged in better times come to the surface when funding is tight or services are under pressure. Many boards flounder during these times of crisis because they do not have a common philosophy and have not spent time developing good working relationships.
A regular investment in board development will generate strong rewards for a board and its organization. Unfortunately, it is also one of the easiest items to let slip given the time pressures on board members and executive directors. Advanced planning will help to ensure that it is not left off the agenda.
The Board of Directors and the Executive Director
The same trust and respect that should exist among board members should also exist between the board and the executive director. In particular, a board president and executive director need to understand each other’s roles and develop a good working relationship. While the board of directors has the authority to hire or fire the executive director, the relationship is in reality a partnership. A good executive director brings years of experience and training in the field and the time commitment in terms of intensity and duration. The board provides the wisdom of collective decision making and a broad range of contacts in the community that can be used to the non-profit’s benefit.
Evaluation will be a key to continued success
Evaluation includes assessment of the board’s overall performance and assessment of individual performance. Each committee of the B.C. Children’s Hospital Foundation has priorities and objectives which are regularly evaluated and updated. Both the Foundation and Meals on Wheels have implemented a board survey to examine overall board performance.
Individual assessment is an opportunity to ensure that board members are satisfied with their contributions to the board and the experiences they are gaining. A good board president will have a clear picture of the status of each board member. It is important to remember that even after a member leaves the board, he or she can be a valuable good will ambassador for the organization. A positive experience on the board is the best means to guarantee this.
Individual assessment can include disciplinary action if a board member is not meeting such basic expectations as consistent attendance at board meetings. While a board may be reluctant to chastise a member, it is a disservice to the board as a whole to have non-performing members. Disciplinary action can range from an informal discussion to formal censure and dismissal from the board.
As with board development, prior planning is essential. Establishing a formal performance plan will go a long way towards giving a board the means to assess its successes or failures. Similarly, setting individual goals will tell a member that his or her time has been well spent.
Conclusion
A consistently successful board is not just a matter of chance. Whether a board is a source of strength or strife depends on the time that is put into recruitment, development and evaluation. While these are not simple tasks, the alternative of a poorly functioning board more than justifies the effort.
An outstanding resource for further information on board recruitment, development and evaluation is the Board Building workbook produced by Alberta Community Development and the Muttart Foundation. Also available are workbooks on Drafting and Revising By-Laws and Developing Job Descriptions for Board Members. To order copies, contact the Grant MacEwan Resource Centre for Voluntary Organizations at 1-780-497-5617.
Note: In small-town Canada, it can be even more of a challenge to find board members. The Youth and Volunteer Centre of Red Deer, Alberta has found a way to make the best use of available people. It operates three programs under one board of directors: a Boys and Girls Club, Big Brothers and Big Sisters and the Teen Network Support Counseling. Each program has its own charitable registration number for fundraising purposes. Not only does such a system make better use of human resources, it guarantees better co-ordination of services.
This article is one in a series being written by Jim Campbell and Sherry Ferronato, Co-Directors of Big Sisters and Big Brothers of Calgary and Area, as part of the Muttart Foundation Fellowships. The articles explore current issues in the management of non-profit organizations.
