Eight Steps to Getting Your Board in Order

Happy New Year. I hope everyone had a relaxing and rejuvenating holiday and all are staying healthy!

A new year is an opportunity to get your organization and your board organized. Here are eight items to consider. Some you will want to do every year, others periodically.

1. Create, Update, and Approve Committee Charters

If you have Committee Charters, each committee should review them at the first meeting of the year. If you do not have them, ask each committee to develop a Charter that spells out responsibilities, membership, terms, leadership, and meetings.

For example, responsibilities for a Board Development Committee might include: identify, nominate, and onboard new directors; identify and nominate officers; make committee assignments and nominate committee chairs; conduct a yearly board evaluation; organize training for the board; and debrief and recognize exiting board members. Membership would be between two and five members with both current and former board members allowed to serve. The chair must be a current board member. Committee members could serve a specific number of terms – or there could be no limit to how long a member can serve. Meetings would be held monthly or at least four times per year.

Some committees may include people who are not on the board. This is a great way to bring in the voices of the broader community and also to provide a pathway to move onto the board. Check your by-laws; you might have restrictions on who can serve on some committees based on state law. For example, the chair of the Finance Committee may not be able to serve on the Audit Committee.

Committee Charters should be reviewed and approved yearly by the committee and then brought to the full board for approval. They provide consistency as board members transition. They also clarify which committee is responsible for what actions so there is not conflict or uncertainty.

Once Committee Charters are created, reviewing and approving them each year takes very little time.

2. Create, Update, and Approve Your Yearly Board Calendar

A Board Calendar together with Committee Charters are essentially your institutional memory.

The Calendar should include all the actions the board is required to take and identify which months they should be completed.  A Calendar helps with transitions as board members and committee chairs change over time. It also helps with timing. For example, the Fund Development Committee needs to approve the fund development plan and the Executive Committee needs to approve the CEO’s salary before the budget is approved.

I recommend that each committee develop its own Calendar which then feeds into an overall Board Calendar. The Calendar should be updated and approved every year.

3. Conflict of Interest, Electronic Communications, and Commitment

Every year all board members should sign a Conflict of Interest form and an Agreement to Receive Electronic Communications. You can get these from counsel, or you can search online.

Note that different states have different requirements.

Add this to your Board Calendar to complete at the first board meeting of the year.

A Conflict of Interest form allows board members and senior staff to identify if they have any business dealings with the organization or with others who are on the board or senior staff. Having a business arrangement is not forbidden. But it is important to be transparent about those arrangements. Individuals involved should not participate in discussions or votes around those conflicts.

Depending on your state, board members might have to sign a form indicating that they will accept official notifications via electronic means such as email and provide the best email to use.

The Commitment Form allows board members to indicate their yearly donation and/or other ways they will assist the organization. These might be hosting events, making introductions to individuals or organizations, attending programs sponsored by the organization and the like. Often the commitment form will list responsibilities of board members such as attending 75% of meetings, serving on at least one committee, and being an ambassador for the organization.  

4. Confirm Officers, Committee Chairs, and Committee Assignments

I recommend that the Board Development Committee identify officers, committee chairs, and committee assignments before a new fiscal year begins. That way everyone is ready to go ahead of time. But if you have not done this at the end of last year, you should do so at the first meeting of the year. And put this on your Board Development Committee and overall Board Calendar to complete at the end of the year. See my post about being transparent about how assignments are made.  

5. Review Articles of Incorporation

Your Articles of Incorporation do not need to be changed unless the work of your organization has changed. It your work has evolved, check what you put in your original Articles of Incorporation. If they do not match, you need to update them and refile with the Secretary of State in your state. You will need to vote on the changes and have a resolution to update them. Look at your Articles of Incorporation if your work has evolved or every three to five years.

6. Review Your Bylaws

Nonprofits are legally required to have bylaws which are a guide for how to run your organization and your board. Bylaws should be reviewed every two or three years, so they reflect how your organization actually works. That said, most provisions of your bylaws should not change frequently. If you find you are changing some provisions often, then remove those items from your bylaws and include them in your policy manual.

When updating your bylaws, it is worth consulting counsel as changes in state law can require changes in your bylaws. Changes need to be approved by the full board.

Your bylaws should include:

  • Statement of purpose
  • Leadership including election, roles, and terms of board members and officers
  • Meeting guidelines including frequency, meeting notices, and quorum
  • Voting procedures including number of votes necessary for an initiative or policy to pass
  • Board structure including size, committees, committee membership, terms
  • Chief Executive role
  • Amending bylaws
  • Dissolution of the organization

7. Review Your Policies

Review your Board Policies every two years. Most will not need to be updated. But policies can become outdated or new ones required. Consider the last couple years as we have started to work remotely. You may need policies about home offices that you did not have previously and there may be ones about working in the office that are no longer relevant.

Nonprofits files IRS form 990 to provide the public with financial information. The 990 asks if an organization has policies including document retention and destruction, whistle blower, conflict of interest. and CEO compensation.  So, it is advisable to adopt these policies. It is very important to comply with policies you pass as well.

Policies you should adopt:

  • Board policies: compensation, code of conduct, covering expenses
  • CEO compensation
  • Conflict of Interest
  • Document retention and destruction
  • Gift acceptance
  • Nondiscrimination
  • Whistle blower
  • Financial policies (operational procedures around finance are up to staff): asset mix and investment strategy, risk management and insurance, line of credit, minimum reserve funds, level of obligations the CEO can approve outside of the budget
  • HR policies these are mostly staff-driven but the board should ensure adequate polices are in place and make strategic decisions such as anti-harassment, paid/unpaid leave, flex time

8. How You Make Decisions

As a board, you should agree on how you make decisions. I recommend you start with your values and create rules that are flexible but also help you reach decisions. See this post which addresses this topic in detail.

2 Comments

  1. Sharon Chen

    What are the options for managing this process? Experienced and energetic board members can always do a great job with this. However, those may not be available in all cases. Have you seen consulting resources work well to aid with this? Or would the process need to be run by full time staff?

    1. Janet Levinger

      Sorry I did not see this before. Generally the process is run by the board governance committee.

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