Reform of Boards Starts at Home

While the country is busy pointing fingers in this most recent financial crisis, corporate boards are taking a fair share of the blame. Executive compensation, lack of oversight and conflicts of interest are in the spotlight in terms of how boards need to operate more effectively and accountably.

Just like the nonprofit sector looked to tighten our financial controls relative to Sarbanes Oxley standards several years ago, even though those standards were not applied to nonprofits, it is advisable now to review what good nonprofit board governance practices are now, when we are NOT in crisis.

This article published by Community Foundations of America, Inc. is a good survey of the issue. We'd love to hear of other good sources of information on board governance and reform from our readers.

Being a Productive Nonprofit Board Member

Being asked to serve on a nonprofit board is an honor that reflects the high standing you enjoy among your peers. Board participation is an excellent way to gain the satisfaction that comes from supporting a cause you care about. You also get to expand your social and professional network; share your expertise; lend your credibility to a nonprofit organization and, of course, improve the quality of life in your community.

With those benefits, however, come responsibilities. Nonprofit boards have full and final responsibility for all actions of the nonprofit agencies they represent. In their service to an organization, board members have a legal responsibility to meet the following duties:

Duty of Care: Showing reasonable care when making decisions for the nonprofit.

Duty of Loyalty: Acting in the best interests of the nonprofit and not using information obtained there for personal gain.

Duty of Obedience: Assuring that the organization acts in accordance with its mission.

Before you agree to serve on a board, it’s a good idea to find out what will be expected of you. You’ll want to know how much of your time will be required. Will you play a role in fund raising, financial oversight, strategic planning, and evaluating the executive director’s performance? In particular, it’s important to determine your expected financial commitment and whether you are comfortable with it. Full participation in giving by the board is often an important part of being able to raise money elsewhere.

Keys to Success

If you have done your due diligence and agreed to serve, you will want to make your time on the board as productive as possible. Here are a few helpful tips for making your experience a positive one - for you and the nonprofit you serve.

1. Attend Meetings

Active boards are effective boards. Make sure that your schedule will allow you to participate in most scheduled board and committee meetings, and other key organizational activities, such as the annual meeting or major fundraising events. By participating, you will stay apprised of current issues and contribute to the continuity of decision-making.

2. Serve on a Committee

By serving on a board sub-committee, you will get another view of the nonprofit agency, and further expand your service. Typical committees include investment, development, nominating, program, and finance, plus special committees for things like annual events and capital campaigns. Unless you were brought on-board for a specific area of expertise, you might choose to serve on a committee that will provide you with a learning experience .

3. Identify & Focus on Priorities

In any organization there are program, finance, and operational responsibilities that need to be taken seriously. Talk with your agency executive director and other board members to identify the most important issues for your agency. Then make certain that they are discussed and treated as a priority at every meeting and that the structure of the committees assigned to them reflects the organization’s strategy.

4. Plan for the Future

One of the most important assets that any nonprofit can have is a strategic plan. Strategic planning is an area where the board must provide leadership. In some cases, long-term planning involves building the agency endowment to provide for regular operational costs.

5. Combine Ideas with Action

When you come up with a good idea for your agency, be prepared to help find the resources to carry it out, and perhaps take charge of implementing it yourself. Few things are as valuable to an agency as a board member who is willing to take action to support the organization. Generating needed resources is also the best way to make sure that the things you care about will get done.

6. Be an Ambassador

Consider yourself an advocate for this organization, wherever you go. Some agencies provide business cards for board members. At the least, be sure you can tell the organization’s story succinctly and accurately. Keep their promotional materials on-hand and be on the lookout for new sources of funding, volunteers, and prospective board members. When you refer people to the agency for these purposes, follow-up with staff to make certain that contact was actually made.

Above all else - have fun! If you enjoy your board assignment, you will be a productive member and everyone - you, the organization and your community - will benefit.

Copyright 2002, Community Foundations of America.

Carla E. Dearing

Posted at 8:25 AM, Sep 22, 2008 in Accountability | Nonprofit Management | Philanthropic Strategy | Permalink | Comment