4. Boards and Directors have Legal Duties of
Care, Loyalty and Obedience
Hold public benefit corporation ―in trust‖ for the community
• An obligation to act in good faith • Be informed e.g.
Duty of – Attend meetings regularly
– with best interests of nonprofit
care in mind – with such care of a – Seek and review necessary information
reasonably prudent person • Exercise independent judgment
– Ask questions – avoid simply going along with
other directors
– Rely only on judgment of dependable sources
Duty of • An obligation to keep
confidences of nonprofit and • Avoid self-dealing transactions
loyalty avoid actions that benefit self at • Where directors’ firm provides services
expense of nonprofit or products to nonprofit, make conflict known
to board, recuse self from discussions/votes
Duty of • Required directors to comply with • Understand mission and bylaws
applicable laws, adhere to • Ensure regulatory filings completed
obedience bylaws and remain guardians of • Require operation audit and policy review
the mission
4
5. Types of Boards
Organizing Board
– small, homogeneous, informal
– committed to purpose
– Very hands on to support start up
Governing Board
– larger and more diverse board
– committees become important
– shared authority between board and staff: board chair and
executive director are principal leaders
– transition to governing board takes at least 3 years and a lot of
staff time
Institutional Board
– very large (35-60 or more)
– prestigious -- includes large donors or those with access to funders
– accepts significant responsibility for fundraising
– often delegates some governance to executive committee
5
6. Creating a Dynamic Board
Environment
• Monitor external and
internal environment to
prioritize areas for
Board attention
• Ensure quality
performance across 3
primary Board roles
• Develop a set of enabling
practices around Board
Monitor and improve performance
composition, size
structure, processes, and
staff relationships
Enablers
6
7. 9 Responsibilities of Nonprofit Boards
• Select, evaluate
• Shape, clarify
and develop CEO
mission and
vision • Ensure adequate
financial
• Engage actively
resources
in strategic
decision making • Lend expertise;
and policy provide access to
decisions people
• Enhance
reputation of
Monitor and improve performance organization
• Oversee financial management, ensure
appropriate risk management
• Monitor performance, ensure accountability
• Improve board performance 7
8. Responsibilities of a Non-Profit Board: Importance Ratings
Q: Over the next one to two years, how important is it for your Board to focus on:
1. Clarifying the organization’s mission
Shape or vision 1 2 3
Mission and
Strategic 2. Resolving key strategic or policy
Direction issues 1 2 3
3. Developing CEO capabilities
1 2 3
4. Developing financial resources to
Ensure
support strategy 1 2 3
Leadership
and 5. Providing expertise or access to
Resources support organizational priorities 1 2 3
6. Building the reputation of the
organization with key stakeholders 1 2 3
7. Overseeing financies and ensuring
adequate risk management 1 2 3
Monitor and
8. Assessing performance against
Improve mission and key program priorities 1 2 3
Performance
9. Improving Board performance
1 2
Medium 3
Low High
Rated Importance
Group Average Group Response Range
8
9. The Governance Gap
• 97% said that a high-performing board was important to a high-performing
nonprofit...
— However, only 19% said they were tapping their boards’ full potential
• 94% felt that their boards provide the appropriate level of strategic guidance…
— However, only 46% thought that their directors would be able to summarize both
the mission and the vision of their organizations
• 77% of respondents indicated a desire to improve board fundraising, but…
— Just 21% set individual board member fundraising goals
— Just 38% provided fundraising training
— Moreover, a mere 16% reported having individual board members receive formal
feedback on their performance at a regular interval
• Source: McKinsey survey of social services organizations
9
10. Board Performance GPA
Survey response to ―give your board a letter grade‖ on each dimension
Understanding mission
Financial oversight
Legal/ethical oversight
Supporting CEO
Knowledge of programs
Director view
Monitoring performance
CEO view
Strategic planning
Community relations
Increasing diversity
Fundraising
0 1 2 3 4
Source: Boardsource Nonprofit Governance Index 2010 10
11. 5 Enablers are Key to Closing Execution Gap
• Size and structure are a balancing act but must ensure
coverage of 9 responsibilities
• Effective leadership must drive for a true partnership at
board and committee level
• Composition requires needs-based management and a
graceful transition mindset
• Sweating the details on process is critical to board
function and engagement
• A trust-based relationship with CEO is the underlying
foundation
11
12. Summary Take-Aways
• Roles Matter: There are 9 clearly defined responsibilities of a nonprofit
board, with a gold standard of performance for each. Increasing emphasis
on:
• Multi-year planning
• Performance measurement and accountability
• Risk management
• Sweat the Enablers: Good governance is execution
• Pay attention to the enablers of execution, including the small stuff
• Board Chair as CGO
• Understand and address the ―human‖ aspects of director interests and
styles
• Pick Your Battles: There are lots of ways boards, as entities and directors as
individuals, can help. Pick your spots carefully to allot valuable time where
needed most
• Look in the Mirror: Invest significant time in board evaluation and continuous
12
improvement
13. AA Good Board is a
Victory, Not a Gift
Cyril Houle
13
14. Learning from our Shared Experiences
(10 min)
• Use Post-its to capture your answers to 4 questions
and post them for all to see
1. What does your board do well? (add org name)
2. What can your board improve?
3. What works that you can share with others?
4. Advice for the Board Fellows program?
• Put initials on your answers and post them (one
answer per post-it) to each of the 4 areas in the
room
• We will share greatest hits and themes a bit later
14
15. Breakout Group Coaching
• Board Officers and Leadership – Jay & Bob
• Marketing: New techniques and technologies to
get your message out – David
• Governance and Board Development – Colin &
Paul
• Fundraising –Jamie & Nora
15
16. Board Experience Shared Learnings
• Themes
• Greatest Hits
• Take a few minutes to walk around and look at
the postings of your peers
16
17. Individual Coaching
• Coaches are available to speak with you 1 on 1.
• Your opportunity to:
– get individual questions answered
– meet one of the coaches you haven’t already
– follow-up on a discussion
• If not, you’re done and we appreciate your
participation
17
Hinweis der Redaktion
Welcome to the Board Fellows Program Kick-off I have been communicating with most of you, reading applications and really excited to see you all here together today.We are delighted to see students, mentors, nonprofit staff and board members represented today
The purpose of today isProvide the opportunity for fellows and mentors to meet one another and to plan for the year aheadProvide a chance for all participants to meetExplain program expectations, roles and responsibilitiesProvide an introduction to best practices in board governanceGive you a chance to hear from past participants and ask questions Introduce and thank Nora, Evin and Jean