Nonprofit boards of directors can either be a great asset to an organization or of little value. They are required by law to ensure that the public good is furthered. They can be viewed by the staff as being important to the organization or a nuisance. Let’s consider three areas of concern. Who should be on a board? What should the board and its member do? What should be the on-boarding process for new members?
Who Should be on a Board?
Members and those being considered for membership should be able to contribute one or several of the following “3 W”attributes; Wealth, Wisdom, or Work.
Most nonprofits are funded by voluntary contributions. Some are partially funded by foundations or governmental sources, but finding funds is always an issue. Hopefully, several people on the board can contribute in this area. Some may be motivated by the cause and have sufficient resources to make a major contribution. Others may be able to network with individuals who are motivated by the cause and willing to make a contribution. Some funding may come from activities such as dinners or golf tournaments. Here the networks will provide some of those who will participate.
Members need to be recruited who supply wisdom. That wisdom can come in many forms. All boards like to have an attorney or accountant on the board. An individual may provide a needed marketing perspective or, in the case of associations, represent individuals within the membership. Those who work with individuals with disabilities should recruit clients and their caregivers for the board.
Smaller organizations, with limited staff, often need to recruit board members to supplement staff activities. They may develop a marketing campaign or assume the accounting function. They may actually do the planning and implementation for fund raising events. Care needs to be taken when board members assume what otherwise would be staff function. In these cases, coordination of their activities through the Executive Director or President is critical.
What Should the Board Members Do?
The board may, through necessity, be required to assume a number of functions, but let’s consider four; fiscal responsibilities, hiring key people, development of the strategic plan and oversight of the strategic plan execution.
The board should be responsible to review and approve the annual budget and any changes in that budget. At each meeting, a financial report should be presented and reviewed by the board members. All reports are subject to audit, but the responsibility for the financial security of the organization rests with board.
There always comes a time when the president or executive director either leaves, retires or needs to be replaced. Although the search and initial interviewing may be done by a committee, the final approval is subject to board approval. Conversely, a decision to dismiss a president or executive director requires board approval. Best practices indicate that hiring and dismissal of staff should be left to the senior executives in the organization.
The board has the prime responsibility to develop a strategic plan for the organization. This may be accomplish with the involvement of the staff and it is always advisable to use an outsider, such a consultant or coach, to guide the process. The plan should include a mission, values, and goals. It is not necessary to redo the plan each year, but it should be reviewed and updated.
Once the plan with its goals is completed, the next and most important step is implementation. Too often it is assumed that once the plan is written, the process is complete. Many a plan is written and filed to be reviewed at an appropriate time the following year. Boards of directors must make the implementation of the plan their responsibility. At each monthly board meeting, the management of the organization needs to be asked to report on progress against the plan and its goals. There is never time in a board meeting to review implementation of the entire plan, but issues that arise should be presented for discussion.
On-boarding and Orientation
All effective boards must provide for turnover of their members. Term limits need to be set as to the length of service. Members will be retired and new members added. As new members are added, it can be assumed that they may not have on understanding of the organization’s plans and methods of functioning. They also must understood their roles and responsibilities as board members. The board chair and the executive dictator should provide an opportunity prior to the new member’s first board meeting for orientation.
Participation on a nonprofit board can be a rewarding experience for the individual and highly beneficial for the organization. Our experience in working with nonprofit boards and staff has been rewarding to us as we see their effectiveness grow and the increase in service they provide the community.