Empowering Your Board to Empower You
If you lead a nonprofit, chances are you have puzzled over the right set of roles for your board. Every nonprofit, of course, is required by law to have a governing board that is charged with ensuring that the organization carries out its mission. Throughout the nonprofit sector, there is quite a bit of variation and flexibility in how boards carry out this responsibility. And too often, even the most well-intentioned board can end up taking on too many roles—thus limiting an entrepreneurial leader’s ability to realize his or her organization’s full potential.
To determine how your board sizes up, we suggest beginning by comparing your own board’s roles to those described below. We have found that boards work best, and enable nonprofit leaders to accomplish the most, when they focus on the following three primary roles:
- Approving the organization’s strategy or business plan. Nonprofit leaders should take the lead and work with their boards as partners in the process of setting strategy—preferably through a multi-year business plan that has clear benchmarks for success. This plan should be approved by the board, leaving the nonprofit leader in charge of implementation. All future decisions about whether the plan is working and what to change should be supported by the data on which the strategy or plan was based, or on relevant data collected since the development of the plan.
- Evaluating the performance of the nonprofit leader based on pre-established benchmarks. All boards should provide a yearly evaluation of the nonprofit leader, based on performance benchmarks developed by the board and the nonprofit leader together. Each annual evaluation should be conducted by a one-time committee made up of no less than three board members, who will use the benchmarks as a guide to evaluate performance through data and interviews with staff. These benchmarks may also be reviewed informally on a quarterly basis to measure progress and alert the leader if he or she is falling short.
- Overseeing the fiscal responsibility of the organization. Too often, boards end up serving as review panels for all major purchases made by their organizations. Instead, nonprofit leaders and their boards should agree on an overall budget that is based on the organization’s strategy or business plan and the costs required to execute that plan. The board or a sub-committee should review the actual financials against the budget on a quarterly basis. This leaves room for nonprofit leaders to make day-to-day decisions about spending without needing to devote time and energy to getting board approval. In addition, it saves board members’ time—providing them with an opportunity to execute their fiduciary responsibility with minimal day-to-day involvement.
Clearly defining the board’s primary roles and the information that will inform board-room discussions will help to establish optimal partnerships between nonprofit leaders and their boards, while enabling efficient and effective decision-making. Such partnerships will also empower nonprofit leaders to apply their passion and expertise to doing what they do best: acting on opportunities, executing new ideas, and, ultimately, building enduring solutions to some of our most pressing social problems.
Ask a Root Cause Consultant: Should boards always be involved with fundraising?
Our answer to a question from the field. To submit a question, write to: Ask@rootcause.org.
We believe that the only roles that all boards should play are the three listed above. While there are other roles that a board might play, any supplementary roles should be selected by the nonprofit leader, based on the specific needs of the organization and the skill sets of the board members. Common supplementary roles include: fundraising, advising marketing strategy, and recruiting new board members.
In order to select appropriate supplementary roles for your board, start by making a list of their current functions that fall outside of the primary roles described above. Do these functions provide you with insights and resources that you would not otherwise be able to access? Do they facilitate, rather than hinder, your ability to carry out the day-to-day work of implementation? Based on your answers to these questions, create a document that describes the supplementary roles that you would like each of your board members to continue to play—adding to it any new supplementary roles that you think would be helpful. Use this document to start a discussion that will further focus your board on the areas that will best aid you and your team in carrying out your organization’s mission.
Tools for Practitioners
Our favorite tools on the web.
Finding Effective Board Members
Guide Star
Based on a survey of readers of Guide Star’s monthly newsletter, this brief article describes where to look for new board members, what to keep in mind before you start recruiting, and how to define roles before your new board members start.
Board Source Web Site
Board Source
The Web site of Board Source, a consulting firm for nonprofits specializing in strengthening board effectiveness, includes a Knowledge Center that contains a wealth of reports and tools on nonprofit boards. Accessing many of the reports requires a $99 annual membership fee. The extensive Q&A section, which includes “Board Essentials” to guide board members in filling their roles, is free.
RECOMMENDED BOOK: Strategic Tools for Social Entrepreneurs
by Greg Dees, Jed Emerson, and Peter Economy
This book, which draws lessons for nonprofit leaders from business entrepreneurs, includes a chapter on “Managing Your Board Entrepreneurially.” It compares traditional board roles with entrepreneurial ones, and discusses alternative board structures, such as advisory boards.