Building the Right Board

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By Jules Schoolmeester

In 2014, the Stanford Graduate School of Business, in collaboration with BoardSource and GuideStar, surveyed almost 1,000 directors of nonprofit organizations about the composition, structure, and practices of their boards. The researchers found that “the skills, resources, and experience of directors are not sufficient to meet the needs of most nonprofit organizations.”

Boards exist to provide governance and fiduciary responsibility to nonprofit organizations. Talented, competent board members are critical to the success of nonprofits; their (donated) time and expertise can help advance the mission of the organization and build a stronger enterprise.

 In his book, “Good to Great,” Jim Collins discusses board development using the process of “Who First, Then What?” with the metaphor of a business as a bus and the leader as the bus driver. Success is all about getting the right people on the bus.

“You are a bus driver. The bus, your company, is at a standstill, and it’s your job to get it going. You have to decide where you’re going, how you’re going to get there, and who’s going with you.

Most people assume that great bus drivers (read: business leaders) immediately start the journey by announcing to the people on the bus where they’re going—by setting a new direction or by articulating a fresh corporate vision.

In fact, leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline—first the people, then the direction—no matter how dire the circumstances.”

Getting the right people on the bus is important to any business, but it is essential to a nonprofit organization whose mission is to serve the community while effectively and responsibly stewarding donor contributions. All members of the nonprofit’s team whether paid staff, volunteer, or board members are ambassadors of the organization’s brand in the community.

Many factors go into getting the right board members on a nonprofit organization’s bus.

Assessing the Board—Where are the Skills Gaps?

Nonprofit organizations benefit from having board members who bring a diverse set of skills and competencies to the governance, organizational development, and long-term sustainability of the organization. While it is important that board members represent different sectors (such as health care, criminal justice, education, or human resources), it is also important to be specific with the targets. For example, if the nonprofit organization is focused on building affordable housing, it would be important to have a banker who understands specifically the Community Reinvestment Act. Or if an organization helps individuals struggling with addiction, the organization would benefit from having a health care representative with specific knowledge of treatment and recovery.

Getting the Right Mix – Board Diversity

A nonprofit’s board should reflect the community it serves. Diverse boards can help organizations expand their reach in the community. A diverse board can support the nonprofit’s strategic planning goals and allows the organization to expand its footprint in the community and build more supporters (or members). Diversity on the board can also help the organization’s efforts to recruit new board members given that the organization can now tap into a broader set of social circles and networks from which to recruit.

Making the Ask – Come Join Us

Once leadership has a list of potential board members, the board’s governance committee should meet and interview the candidate prior to formally asking them to join the organization. This will save time in making asks and keep the process moving forward so candidates do not lose interest.  

Getting Everyone on the Same Page – Orientation for New Board Members

Nonprofits should clarify expectations for potential and new board members at the outset. Once a board member joins, the organization’s leadership – executive director, board officers and/or governance committee members – should meet with the new board member to review expectations. All board members should be provided with an orientation packet that includes by-laws, position descriptions for both the executive director and the board member, the conflict of interest policy, and the current strategic plan and budget. This will help ensure the new directors are prepared for their roles. Depending on the size of the board and length of terms, nonprofits may want to consider offering board orientation refreshers every two or three years.  

Building Capacity: Advisory Council

Nonprofits may want to consider establishing advisory councils to complement the work of their formal governance boards. Advisory councils are more informal than boards; their specific duties, which can be determined by the board and staff, should relate to furthering the work and mission of the nonprofit. An advisory council can serve several functions. First, an advisory council can help expand the reach of the organization without requiring the same level of staff time to manage its work. Second, if a nonprofit organizes many activities, the organization may want to establish an advisory council, rather than a host committee for each event, which could help support and execute these activities. Third, an advisory council gives a nonprofit a natural leadership pipeline from which to identify and recruit board members.

Finding the Right Size

Determining the size of a nonprofit board can be tricky as every organization is different. According to Blue Avocado, most community-based nonprofits do well with boards ranging in size from 7 to 18. Some may think a bigger board will result in more ideas and more fundraising potential, but bigger boards also require more staff time dedicated to managing the board. This is especially true of the executive director’s time, as he (she) is tasked with building relationships with board members and helping members contribute to the organization in meaningful ways.  

Assessing Board Effectiveness—Key Performance Indicators and Satisfaction Surveys

Nonprofit leaders should spend time identifying the key performance indicators of a healthy, functioning board. Key Performance Indicators (KPIs) could include:

  • Attendance at board meetings
  • Quorum at board meetings
  • A pipeline of potential board recruits
  • Progress on achieving strategic goals
  • Number of board members
  • Board composition and diversity (e.g., demographic, expertise, skills, etc.)
  • Recruitment and stability of executive committee positions
  • Number of advisory council members
  • Percentage of board members that contribute financially to the organization
  • Board member satisfaction surveys
  • Board performance review
  • Board engagement (e.g., activities, meetings)

Nonprofit organizations should develop a spreadsheet with target goals for each of the organization’s key performance indicators and then a range key (green, yellow, and red are easy to follow) to monitor when action needs to be taken. For example, if the nonprofit’s target goal is to have 100 percent of board members supporting the organization financially:

  • 100 percent board giving would be the green-level on-target,
  • 85 percent giving would be a yellow-level monitoring, and
  • less than 85 percent giving would mean red-level take action now to remedy.

An Important Reminder

Serving on a nonprofit board is not for everyone. Some nonprofit fans and supporters may be better suited for a non-board committee or volunteer position. Remember that Jim Collins reminds us that not only is it critical to get the right people on the bus, but it is equally important to have the right people in the right seats. In the nonprofit world, organizations and leadership teams have to make sure that those dedicated to furthering the organization’s mission have a meaningful experience and want to continue to advocate and support the organization. There are numerous ways to do that!

Finding Assistance

Nevada has more than 800 nonprofit organizations. This suggests there is a need for hundreds of individuals in Nevada to serve on the various nonprofit boards. To help identify the right people who should be on the bus, to build capacity and to train those individuals, a number of organizations and institutions around the State provide resources and classes to help strengthen the capacity and effectiveness of our nonprofit boards. For example, the University of Nevada, Reno (UNR) has a Excellence in Nonprofit Management Institute program, which “provides an opportunity for professionals in the nonprofit arena to gain and strengthen management skills and techniques,” among other objectives. UNR also offers a Rural Nonprofit Management Certificate, which “is designed to assist nonprofits in rural areas.” The University of Nevada, Las Vegas’s (UNLV) Continuing Education Program offers a Nonprofit Management Certificate, as does its School of Public Policy and Leadership.  

Beyond the ivory tower, there are a number of other organizations that provide support to nonprofit organizations and their boards. The Leadership Foundation of Greater Las Vegas, an affiliate of the Las Vegas Metro Chamber of Commerce, hosts a number of programs, some of which are designed to identify and train community leaders, including board members. The Alliance for Nevada’s Nonprofits (ANN) provides webinars and training for nonprofit organizations and their boards. The Young Nonprofit Professionals Network supports “nonprofit professionals and community leaders through professional development and networking opportunities designed to enhance the social sector in Southern Nevada.”