Do You Need A Crystal Ball to Understand Your Board?

I have served on many boards. Questions have come up about how boards work internally. Some boards are very transparent. Others not so much. Sometimes, it seems all the decisions are made by a small group of people behind closed doors.

I identified five areas where I think all boards need to be more transparent.

How Do I Get on The board?

Some boards have trouble finding new board members; others have prospects knocking at their doors. With membership organizations — where board members belong to the organization — or schools — where board members are usually parents or alumni — it is especially important to be clear how board members are chosen.

I joined the board of a membership organization, and someone asked me how I was chosen. I said, I had recruited about 15 new members in a couple of years, attended many events, and offered to help on some committees. I got their attention by being committed and active.

Here are some ideas:

Commitment: Be clear about what you want from all board members: time commitment, minimum donation, skills, experience, committee participation. Publish this information in a Board Job Description and circulate to potential board members.  

Matrix: Create a matrix of skills, experience, demographics, etc. and identify where you need new board members to complement current board members. Do you have a balance of men and women? Of older and younger people? Of different races and ethnic backgrounds? Of geography? Understand that organizations have different needs at different times. If your organization is growing fast, you might want someone with lots of change management experience, for example.

Compromise: Recognize internally where you will compromise: Is it okay if someone gives a big donation but does not show up at any meetings? Is it okay if someone puts in a lot of time but cannot make a big donation? My personal bias is that board members need to have sufficient time to attend board and committee meetings, regardless of how big of a donation they make.

Process: Develop a process that includes when new members are invited and when they join. Some organizations bring on board members in a class once a year. Others bring them on at any time of the year. Some boards start courting new board members many years out. Others just look for the current year.

Other Leadership Roles: You may want to look for people interested in moving into leadership roles – which may include areas other than the governing board. Some people’s skills and time availability are better to co-chair an event or serve on a committee. I have seen busy financial advisors serve on an investment committee because they do not have time to serve on a full governing board. And having someone serve on a committee also allows you to see what type of board member they might be.

Nominations: I have primarily seen nominations with membership organizations. Publish broadly that you are looking for new board members, what your criteria are, and allow individuals to nominate themselves.

Applications: Some organizations ask prospective board member to fill out an application. Some applications are simple; some more involved. I see the application as a way for the prospect to introduce themselves to the rest of the board and to show commitment to the position. If someone cannot take the time to fill out a simple application, then perhaps they don’t have time for the board. Be very clear if you have a competitive process and that the individual filling out the application might not get the position. Some people will decide they don’t want to join the board if it is competitive. Competitive processes can have negative side effects. I personally applied to be on a board and filled out a lengthy application twice. I was rejected both times. The rejection shaped my feelings about that organization and impacted my role as a donor. I had another situation where I recruited an individual to a board. When we asked her to fill out an application, she refused. “You recruited me,” she said. “Are you now going to reject me?” People do not like to be rejected.

Vet Board Members Before Voting: Vet candidates thoroughly before bringing them to the board for a vote. If you do this well, the vote should be unanimous. I confidentially share the names of prospects ahead of time, asking other board members if they have any information – positive and negative – that would help us decide if an individual is a good fit.

Diversifying Your Board. I previously wrote a post about diversifying your board. You can read it here.

How Do Your Meetings Work?

The culture of every board is different. Some strictly follow Robert’s Rules of Order. (See this post for thoughts on Rules of Oder.) Others are more casual.  As a new board member, it is often hard to know how the board works. I suggest that every board include a section on board culture and Rules of Order in new board member orientation and the Board Handbook.

If you strictly follow Robert’s Rules, then say so and provide each board member with a Quick Start guide. Otherwise, here are some areas to agree upon. Remember, the Rules of Order should reflect the culture of your organization.

  • Do you use majority rule, unanimous consensus decision-making, or general consensus decision-making? Or do you use some combination? How do you decide?
  • What is your quorum? This should be in your bylaws.
  • Do you use only traditional voting – “yes or no” on each topic –or do you use more multiple choice – “yes, no, maybe” or “yes, no, I can support it”?
  • Are you strict about when a discussion can be held (as is the case with Robert’s)? Or do you allow for discussion and interruption even if there is a motion on the floor? After some discussion, do you allow people to retract or restate their motion or do you require that the original motion be voted down and a new one be proposed?
  • Do you require a motion and second before there is a vote? What if the proposal comes from a committee?
  • Do you allow for straw votes? Anonymous votes?
  • What are your protocols? Do people raise their hands until called upon? Is the chair the one who keeps track of who has their hands raised or does someone else do that? Are people allowed to speak more than once?
  • Are there time limitations on how long an individual can speak or how long you want to stay on a specific topic?

Who Sets the Agenda?

I was board chair of a community-based organization which had a diverse board with members of many different cultures. One board member came to me and suggested that we should not have agendas because they were not equitable and not culturally appropriate for everyone on the board. Which was true. Some board members came from cultures where attitudes about time are more fluid than in our dominant culture. But when I suggested this to the board, several board members who came from cultures that pride themselves on punctuality objected.

After some thought, I decided that having agendas was a good idea. Sending them out in advance allows board members to prepare for the topics to be discussed. And following a predetermined time frame is respectful of people who have other commitments.

That said, I decided that the issue with equity was not around having agendas, but who gets to set them.

With most organizations, the Executive Committee sets the agenda with the CEO. Make this clear to the full board!

I also recommend encouraging all board members to suggest topics for board discussion. As board chair, I sent out an email monthly to board members saying that we were developing the agenda for the next couple meetings and actively solicited their input. I did not promise the topic would be on the agenda for the next meeting. Sometimes agendas are already full. But I did open it up and some great topics and speakers were suggested.

How Are Committees, Committee Chairs, and Officers Assigned?

Often your organization’s bylaws will indicate who appoints committee chairs and who sits on each committee. So, start there.

Committee appointments: I recommend asking each board member yearly to rank the committees they would like to serve on. Someone who is appointed to a committee they are not interested in is less likely to be a positive, contributing member. Do be clear that every committee needs to have members, so some people may have their second choice. Some people will want to serve on more than one committee. If they have time, that’s great! The Board Chair or the Chair of the Board Development Committee should chat with each board member to confirm their assignment.

Committee Chairs: Whatever process you decide should be clear to the full board. Generally, the ED, Board Chair, and Development Committee Chair put their heads together to identify committee chairs. If you are a large board, having a succession plan is a great idea – have someone serve as vice chair of a committee for a year to shadow the chair and prepare to take over.

I would also include a check box on the Board Commitment Form asking if the individual is interested in moving into leadership. Being a committee chair is a good first step. The ED, Board Chair, and Chair of the Board Development Committee can talk to people who express interest. This can require finesse as there may be some people who want to move into leadership but do not have the time, experience, skill set, or personality to succeed. If someone is really interested who is not ready, suggest they take a nonprofit leadership class or attend some webinars to help them prepare.

If no one wants to step into leadership, then the ED, Board Chair, and Chair of the Development Committee will need to recruit someone. This may be someone who was brought on to the board because of their experience or skills in a certain area – such as fundraising, finance, programs, or governance.

Officers: Again, having a succession plan is a good idea. Your vice chair is often your chair elect. Your treasurer is usually the Chair of the Finance Committee so a vice chair of Finance can move into Treasurer. Often the Immediate Past Board Chair is chair of the Board Development Committee. Using a check off box on the Board Commitment Form allows you to see who wants to move into leadership. In my experience, the best Officers are committed to the organization and honor their commitments.

I recommend bringing the full slate of officers to the board to vote on at once rather than individually. This way no one person can feel rejected.

How Are Budgets Set?

I was on the board of an organization which went along well for quite a few years and then one year simply did not make any of its numbers. When things are working well, board members often do not ask hard questions. A couple board members and I wondered what went wrong – and we realized that we did not clearly understand the assumptions behind the budgets.

Your Finance Committee and the full board need to be clear about the assumptions behind your budget. Note I do NOT advocate judging an organization by percent of administrative costs. Poorly paid staff who work in lousy conditions have low morale and higher turnover which is costly. I believe that staff need to be rewarded well. Still as a board, you need to know where you can cut costs should fundraising fall short.  

Here are some questions to ask:

  • How do you project fundraising numbers? How much is already committed? How much is an educated guess based on past experience and knowledge of your donor base? How much is totally unpredictable?
  • How diversified is your funding?
  • Does a large portion of your funding come from a single or small number of sources? What are the risks of that funding going away?
  • Do you get fee for service? How are these numbers forecast? How predictable are they? What is your competition for the service? Are you competitive? What are the risks that your customers could go away?
  • Which expenses are fixed costs? Which are flexible?
  • Do you have a lot of turnover? Why? What turnover do you expect going forward? Why?
  • What are your contingency plans? If you do not make fundraising goals, where can you cut back while still providing good service and treating staff well? 

Lessons Learned

Be transparent about the inner workings of your board.

  • How people get on the board.
  • How meetings work.
  • How the agenda is set.
  • How committee assignments, committee chairs, and leadership roles are determined.
  • How the budget is developed.

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