Monday, June 23, 2014

Get over it: A few things nonprofit boards must accept so we can move on and govern

(Purchased from Bigstock Photo)

If you've read more than one post here, you know that my agenda - for this blog and for boards everywhere - is to present a more fulfilling, expansive, effective vision (and practice) for nonprofit governance. 

I advocate as strongly as I can for treating board members with the respect we deserve and for providing us with an environment that allows us to contribute our best to our agencies and the communities we serve.  I'm also constantly pounding on the message that boards should have more fun and pride of fulfillment in our service.

But as much as I try to stretch our vision beyond a narrow list of roles and responsibilities and the dominance of oversight in those criteria, I also owe it to boards and their members to point out a few realities we don't always like or understand. 

In most of the points I'm about to make, it's not the fact itself that board members might not like. Instead, it's a common definition of how we must govern around that reality that causes some of us to balk (or run astray). I raise these "musts" today, in the spirit of acknowledging some core functions that others (and I) consider to be essential to nonprofit governance. I also, however, remind readers that there may be multiple ways of fulfilling these responsibilities - and suggest that many of the common prescriptions offered in the sector need to be changed.

So here goes, boards: a few things we must "get over" so that we can govern as effectively as possible.

We're ultimately responsible for the financial health of the agency

We may rely on others to handle the day-to-day tasks involved in managing the finances and in generating resources (think fundraising and grant writing). But final accountability for ensuring that the nonprofit has what it needs to function long term belongs to the board. The proverbial buck also stops with us when it comes to stewardship of those resources. We must ensure that they are used appropriately and in the spirit and the intent of the donors and others providing them. 

Yes, fundraising is part of that mix. However - and I know some will disagree - direct fundraising isn't a core responsibility of governance. We may assume a role, out of necessity or a legitimate use of our individual skills and connections. But selling raffle tickets is not governance. Organizing and staffing special events is not governance. (I served on a board where planning the annual fundraising dinner consumed five to six months of our meeting agendas. We were not governing in that mode for up to half of the year. We failed our agency and our community.) The fact that board members are doing them does not make them governance tasks.

The board's bottom line is making sure that resources are available and sustainable. How that happens will vary from organization to organization, depending on individual circumstances. But the board must find a way to make sure that happens. 

"I'm not good at the financial stuff." "I'm not a numbers person." Heaven knows I've uttered those words too many times to count. You know what? I need to get over that. You need to get over that. Financial oversight is part of our responsibility as board members. If we need a different kind of information than we're getting to accomplish that oversight, we need to demand it. If we need extra help understanding what the numbers mean and what strategies we should be pursuing, we need to ask for it. But we must understand the overall financial picture and be prepared to act, thoughtfully and deliberately.

Don't mistake obsessing over every line on the budget as oversight, though. Frankly, doing so can blind us to the bigger picture. I once served on a board that spent copious amounts of meeting time engaging in exactly that - while the ED embezzled funds from us. Find a balance between the daily details and the agency's overall financial health.

Vision, mission and strategy are not "frills"

If I had a dollar for every time a board told me, "We don't have time to ask all of these big questions. We have real work to do...," I'd be enjoying a tropical vacation right now. Questions about our community impact, discussions about our vision of the future, testing decisions to mission fit are not frills. They are not special issues to save for the annual board retreat. They are the work of the board. They are the ultimate purpose of the board. 

The vision and mission of the organization need to be embedded in all board work and in all of the discussions and decisions that emerge from it. We need to understand that strategic (and generative) thinking and governance are where the board's unique leadership can be expressed and where our most important contributions are made.  If we can't or won't commit to asking big questions, researching big answers, and for accepting ownership of the better future we're called to create, we need to step off the board.

There's a secondary component to this, one that may be uncomfortable. But it's critical. Given the preciousness of board member time, we have an obligation to speak up when that time is misused. Agenda items that are overtly management issues, board members who wander off onto nonproductive tangents, endless reports about events past - if they're dragging us down and away from the focus we need to maintain, we need to step up and demand that those activities stop.

Governance is not management

This may be the biggest challenge for some boards: mistaking management tasks for governance roles. Board immersion in management issues can be, at best, a diversion from the governance work that is their responsibility and, at worst, an obstacle to fulfilling those tasks in day-to-day organizational life. 

There are at least three factors that play into this one. First, we may not know what governance really involves. What is board work? What is management? We aren't sure. That's a sector issue, one that I don't see being resolved any time soon. Barry Bader's article, "Distinguishing Governance from Management," offers a framework for understanding the differences that many boards I've worked with have found valuable.

Second, if your organization is new or small, there may literally be no one else to assume core management responsibilities. Board members may be called in to handle some essential functions in these situations to ensure that the work is done. But be aware of the previous reality point: just because the board, or a board member, is doing it does not make it governance. Boards in these situations need to remember that they cannot afford to let the governance work get lost in the management shuffle.

Third, management questions and functions probably are quite familiar and, as a result, within our individual comfort zones. Depending on our professional backgrounds, we may be not only used to management tasks, we may be downright expert at them. We want to make the most of our board service and contribute something of value, so we make the management leap. We can't do that at the expense of our governance responsibilities.

We must lead

Governance is leadership at its most basic. But to reach our full board potential, all members need to do more than just show up for meetings. We need to lead in some way that advances the work. It may be serving as an officer. It may be leading a committee or task force. It might be taking on a special initiative that draws from your individual passions or expertise. But we must lead.

We must contribute, including financially

I know I'll receive pushback on this one, but it's true for an increasing percentage of nonprofits. If you rely upon grants for funding, if you engage in major gift fundraising, your ability to say that everyone on your board contributes financially to your organization can mean the difference between receiving external funds or not. I've written about this question elsewhere. Your board is free to set any policy it wants on this question. But set it knowing the potential consequences.

We must collaborate, as partners, with the CEO

The board and executive director form a leadership team, with complementary and equally essential roles in ensuring the agency's success. The CEO is neither neither your slave nor your boss. The CEO does not set the board agenda. He/she is your partner in moving toward everyone toward the future you desire. Treat the relationship accordingly.

 Board accountability lies in the board's hands

One thing the CEO is not: she/he is not accountable for the board's fulfillment of its responsibilities. It is not the CEO's job to goad you into doing your job. Peers discipline peers (translation: the board, usually through its leadership, holds individual members accountable for their actions or lack thereof).

The CEO can be a valuable support in developing board development plans and self-assessment processes. But carrying them out, and keeping the board on track, is the board's job.


Jane Garthson said...

Fabulous list, Debra. I hope many directors recognize themselves in this and vow to do better. Great reading for CEOs and EDs too.

Debra Beck, EdD said...

That means a lot coming from you, Jane. :) I've been thinking about this one for a while now; felt like a good time to put it out there. I hope that it will, indeed, be of value to someone.

doug otto said...

Your list is on target. I'm linking to my blog on one aspect of NFP boards. Would enjoy your comment if you are inclined. I guess you will have to copy and paste it.

Debra Beck, EdD said...

Grateful for your feedback, Doug! Thanks!