HOW TO BUILD A STRONG & COMMITTED NONPROFIT BOARD October 15, - - PDF document

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HOW TO BUILD A STRONG & COMMITTED NONPROFIT BOARD October 15, - - PDF document

10/15/2015 HOW TO BUILD A STRONG & COMMITTED NONPROFIT BOARD October 15, 2015 Ron J. Huddleston, CFRE, FAHP President The Huddleston Group www.thehuddlestongroup.com BUILDING EFFECTIVE BOARDS OFTEN ARISES AS A KEY CLIENT CONCERN The


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HOW TO BUILD A STRONG & COMMITTED NONPROFIT BOARD

October 15, 2015 Ron J. Huddleston, CFRE, FAHP President The Huddleston Group www.thehuddlestongroup.com

BUILDING EFFECTIVE BOARDS OFTEN ARISES AS A KEY CLIENT CONCERN

“The motion has been made and seconde ded that we stick our heads in sand” d” “Perhaps it would help if I go over it one more time”

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THE MOST EFFECTIVE BOARDS

The Board Building Cycle: Nine Steps to Finding, Recruiting, and Engaging Nonprofit Board Members, BoardSource; 2007

“ Those whose members are deeply committed to the organization’s mission, who bring expertise in key areas, and who represent diverse points of view—evolve over time through careful planning.”

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IF YOU LEARN JUST ONE THING…

“The responsibility for the board's effective work -- both governance and support -- is ultimately the responsibility of the executive director.”

~ Peter Drucker

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GOALS OF SESSION

 Understanding the types of boards  Outline the process of building an effective

board of directors

 Discuss tools and techniques that can facilitate

the organization’s work in developing a competent/effective board

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ORGANIZATIONAL BOARDS

“Garage Band” Small, informal, dominated by founders & friends. Often take change personally, so resist it.

GOVERNING BOARDS

Larger, more independent, more settled and stable. Start formalizing rules & procedures. Less start-up mentality, more long-term sustainability focused

INSTITU TUTIONAL BOARDS

Larger organizations, more sophisticated structures (very formal policies, procedures, roles & responsibilities), standing committees (that work). Larger staff to support them. Often honorific with representative stakeholders

THREE NONPROFIT STAGES

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BARRIERS TO BOARD EFFECTIVENESS

Temptation to micro-management

 A barrier because…  Board is charged with overseeing the EXECUTIVE, who, in turn, manages his/her staff  Oftentimes results in wasting time on trivial matters

Ineffective nominating committee

 Must be fine-tuned because…  Nominating committee determines the future make-up of the board of directors

No plan for rotation

 A barrier because…  Limits opportunities for a real change  Why needed? New members can help promote creativity and innovation in decision-

making

Failure to remove unproductive members

 A barrier because…  Prevents board from fully serving its purpose and fulfilling organizational mission  Po

Possible Solution: Must have system for evaluating board performance and making recommendations for future board service

MOREBARRIERS TO BOARD EFFECTIVENESS

Too small

A barrier because…

 Must have enough individuals to fulfill the multiple responsibilities and competencies of a board of

directors

Possible solution:Recommended numbers fall anywhere from 11 to 21

Lack of functioning committee structure

A barrier because…

 Most of the work that supports and implements major board decisions are done in committees

No strategic plan

A barrier because…

 Board members often spend too much time talking about issues that are of little importance because

there’s no real direction

 Results in a lack of long-range development plan that will help the organization prepare and thrive in the

future

No plan for orientation or training of new and old members

A barrier because…

 New members must be carefully joined so as to create a well-functioning TEAM  Training is essential for growth and adapting to the ever-changing environment

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 Share overall fiduciary and strategic

responsibility for the organization

 Fill and evaluate the chief executive position  Ensure adequate financial resources for the

  • rganization

GOVERNING BOARD

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  • Focus on providing technical or specialized

expertise to an organization

  • May support program, fundraising, or other

specific task

  • Do not usually make overarching strategic

decisions or executive hiring/firing

ADVISORY BOARD

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BUILDING: FROM RECRUITMENT TO ENGAGEMENT

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BUILDING AN EFFECTIVE BOARD

 BOD roles and responsibilities  Board composition  Recruitment  Training  Assessment  Education/development  Governance

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FORMAL BOARD ROLES

Ensure the organization stays in compliance with laws & regulations

Determine organization’s mission, strategies, and program priorities

Ensure organization uses its resources toward fulfillment of it’stax-exempt purpose

Hire and oversee an executive director or CEO

Maintain control of important decisions and have adequate knowledge of the organization’s

  • perations

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OTHER BOARD ROLES

Fully participate in board meetings, deliberations, and decisions

Read, evaluate, and ensure accuracy of all reports, including minutes, financials, and evaluations

Ensure the organization has sufficient resources, including people, funding (fundraising), and other key assets

Prepare and review policy documents

Replace and orient new board members

Act in the best interest of the organization & advocates for it in their networks and community.

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IDENTIFY BOARD COMPOSITION

“Recognize the importance of effective boards to these nonprofits. Nonprofits themselves, and their boards, must assist this process by rethinking old assumptions about who should or could serve effectively on their boards and about how people can be identified, developed, and recruited.”

Benjamin R. Shute Corporate Secretary Rockefeller Brothers Fund

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BOARD COMPOSITION

 Nominating Committee  Review of mission and organization’s strategic

direction

 Development of Board Profile

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BOARD COMPOSITION (CONT’D)

 Board Profile

 Thinking about mission & strategic direction – what

perspective/expertise needed?

 What is the current composition of board?  What gaps will we need to fill over the next few

years?

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KEYS TO A HEALTHY BOARD

Recruit Train Retain

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RECRUITMENT

“No board function is more critical for long-term effectiveness than active, successful recruitment…Where this task might have begun in the past with recommendations of friends and colleagues, today its is a complex and substantive process that…involves all board members.”

Jameson A. Baxter, President Baxter Associate Inc. Palatine, IL

BOARD RECRUITMENT

Form a Board Development Committee

Do a Board Assessment

What Roles & Expertise are needed to achieve your mission and 1-5 year strategic goals?

Create a Board Matrix

Brainstorm Potential Recruitment Targets

Do your Research!

Recruit

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BOARD RECRUITMENT

Determine characteristics of your ideal candidate

Create an application and selection process

Recruit several candidates

Interview & Rate them

Recommend to the board & ED

2nd Discussion with candidate: expectations (pre-

  • rientation)

Invitation

Recruit

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TRAINING “Board members don’t always have an intuitive mystique or skills to do the job. If this is important work, then proper training must be done.”

Elaine Jacobson Board Member Planned Parenthood of Southern Arizona

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BOARD TRAINING

Form a Board Development Committee

Do a Board Skills & Knowledge Assessment

What kind of training or orientation are needed to achieve your mission and 1-5 year strategic goals and to ensure the board’s effective performance?

Create a training calendar

Seek funding and experts if needed

Train

BOARD TRAINING

Training vs. Orientation

Timing & Frequency

Suggested Participants

Content

Organizational Overview

Orientation to Board Manual

Roles & Responsibilities

Overview of Board Structure / Committees

Overview of Board Operations (policies, etc.)

Strategic Plan Review

Train

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WHAT’S IN A BOARD BINDER(ONLINE)?

1.

Welcome Letter

2.

1-page Organizational Overview

3.

1-page Strategic Checklist

4.

Corporate/Historical Documents (annual report, bylaws, incorporation docs, latest 990)

5.

Rosters - board, committees, staff, org chart

6.

Meeting & Event Calendar

7.

Responsibilities & Key Policies

8.

Financial Info - budget, latest audit report & statements, list of funders & individual contributors

9.

Tools - membership for, letterhead, collateral

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ASSESSMENT “Exceptional boards embrace the qualities of continuous learning

  • rganization, evaluating their own

performance and assessing the value they add to the organization.”

The Source: Twelve Principles

  • f Governance That Power

Exceptional Boards BoardSource

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BOARD ASSESSMENTS

Annual Satisfaction Assessments

Appreciation Events & Tokens

Pair Passion with Participation

Form, Function, & Fellowship

Valuable Meetings

Reinforce Personal Enrichment/Benefits

Meaningful Impact

“Clean out the Closets”

Retain

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EDUCATION AND DEVELOPMENT “Continuous learning occurs formally and intentionally in and out of board meetings. Exceptional boards learn continuously by planning for learning and responding to learning opportunities.”

Melissa Davis Director, Governance YMCA of the USA

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EDUCATION AND DEVELOPMENT(CONT’D)

 Create regular opportunities for development  Survey board members  Compliance and governance Issues  Enhancing board effectiveness  Build into meeting structure  Quarterly Board Meetings

 Guest educational presentation at each meeting; Section of

board book for new/interesting articles on nonprofits/governance)

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GOVERNANCE

“Compliance as a function must be addressed…But, compliance with integrity requires more effort. Exceptional boards seek to meet this standard by addressing not only the details of what is legally required but also by going further to ensure the

  • rganization’s operations and undertakings are

conducted in a truly ethical, open and responsive manner…”

Margaret L. Ackerley

  • Sr. VP, and General Counsel

World Wildlife Fund Washington, DC

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WHAT IS GOVERNANCE?

To govern is to steer, to control, and to influence from a position of authority. Governance deals with the legitimate distribution of authority throughout a system – whether a country or an organization.

  • - BoardSource

“Boards need to stop and think about governance ce – instead of just constantly doing what they think is governance.” .”

  • - Richard Chait

An Intentional and Engaged Board

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TYPICAL GOVERNANCE ELEMENTS

Governing Board Advisory Groups CEO/Staff Committees & Task Forces

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BOARD: GOVERNANCE & SUPPORT

Governance

Objective: Represent the community’s interests within the

  • rganization

Process for action:The Board acts as a single body Responsibilities: Direction (Mission, Strategies) Legal Compliance Safeguard Finances Select, monitor CEO Fundraising (approve, monitor) Program Prioritization, monitoring Ensure Efficiency & Impact

Governance

Objective: Represent the community’s interests within the

  • rganization

Process for action:The Board acts as a single body Responsibilities: Direction (Mission, Strategies) Legal Compliance Safeguard Finances Select, monitor CEO Fundraising (approve, monitor) Program Prioritization, monitoring Ensure Efficiency & Impact

Support

Objective: Represent the

  • rganization’s interests within the

community Process for action:Board members act as individuals or through communities Responsibilities: Fundraising (assist staff in actively raising funds: donate, volunteer at events, network, solicit) PR & Community Contacts Recruit Volunteers Advise in Area of Expertise Lend name & reputation to cause

Support

Objective: Represent the

  • rganization’s interests within the

community Process for action:Board members act as individuals or through communities Responsibilities: Fundraising (assist staff in actively raising funds: donate, volunteer at events, network, solicit) PR & Community Contacts Recruit Volunteers Advise in Area of Expertise Lend name & reputation to cause

Source: CompassPoint Board Model

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Board’s ’s core work:

Governance - Ensure legal compliance Advocacy – Promote organization in community Charitable Giving – Lead by example 100% member

commitment commensurate with ability.

Seeking Gifts From Others - Ensure fiscal

accountability

Recruitment – Board & CEO Participate in Committee Work– Provides expertise

to move the organization forward

FIDUCIARY MODE

MORE EFFECTIVE BOARDS

Dysfunctio ional Functio ional Responsib ible Exceptio ional

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12 Q’S A BOARD SHOULD ASK (1-6)

1.

Where do our revenues come from?

2.

What is our cash flow?

3.

What could really hurt—or kill—our organization in the next few years?

4.

How are we doing relative to other organizations similar to ours?

5.

If our chief staff officer were hit by a bus tomorrow, who could run the organization?

6.

How are we going to improve, grow and move forward?

12 Q’S A BOARD SHOULD ASK (6-12)

7.

Are we living within our means?

8.

How much does our staff (and others) get paid?

9.

How does bad news get to the top?

10.

What are our “internal controls?”

11.

Do we understand what our auditors are telling us?

12.

Do I really understand the answers to questions 1 through 11?

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TIPS FOR EFFECTIVE MEETINGS

1.

Start on time; End on time

2.

Prepare an advance agenda & materials -one week ahead!

3.

FOLLOW THE AGENDA - keep on track & on time!

4.

No Rat holes! - “Send it to committee”

5.

Avoid acronyms unless everyone knows them

6.

Facilitate! Facilitate! Facilitate!

7.

Have Meeting Agreements - enforce them

8.

Only share active committee reports

9.

Don’t overdo Robert’s Rules

10.

Controversy? Go back to Meeting Agreements & Checklist

11.

Formal Votes & Close out with Action Items/Accountability

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CELEBRATE!

 The work of building a board is tough—it

requires intentional, deliberate planning

 Don’t forget to recognize the successes and

appreciate efforts

 Consider adding a “get to know each

  • ther/share good news” portion to the

beginning of each board meeting

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BOARD AND ADVISORY GROUP REVITALIZATION Celebrat ate!

Rotate Evaluate Educate Involve Orient Recruit Cultivate Identify

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IN CLOSING

“Exceptional nonprofit boards advance the common good through uncommonly good work.”

BoardSource, Exceptional Board Practices: The Source in Action: October 2007

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CONTACT INFORMATION

 Ron J. Huddleston, CFRE, FAHP

 President and CEO

The Huddleston Group 877-831-0472 ron@thehuddlestongroup.com

 Board Recruitment (article)  Board/Staff Responsibilities (detailed)  Board Assessment Tool  Board Evaluation Survey  Board’s Role in Major Gift Fundraising (article)  Checkout Our Blog on Developing Your Board of Directors

thehuddlestongroup.com/Insights

 Download all the above at www.thehuddlestongroup.com/download 44

RESOURCES

BoardSource, Assessment of Governing Boards & Chief Executives: A Practitioner Program, Conference Oct. 10-11, 2007 BoardSource, Exceptional Board Practices: The Source in Action, October 2007 BoardSource, The Board Building Cycle: Nine Steps to Finding, Recruiting, and Engaging Nonprofit Board Members, 2007 BoardSource, www.boardsource.org Brown, William, “Board Development Practices and Competent Board members Implications for Performance,” Nonprofit Management & Leadership, vol. 17, no. 3, Spring 2007 Charities Review Council,www.smartgivers.org Independent Sector, www.independentsector.org Panel on the Nonprofit Sector,www.nonprofitpanel.org