Innovating the Design of Non-Profit Boards
2009 Jack Ricchiuto | DesigningLife.com
In an ideal world, you assemble of group of talented people with passion for a common mission, and they act as a consistently effective non-profit board. In the real world, there is no such guarantee.
Non-profit boards are only as effective as they are designed to be. If a board is not cohesive and productive, it is not fundamentally because of the talent or passion of the people on the board. It is always about the design of how the board works, or doesn’t.
There are 5 core design elements of a non-profit board.
Scope / What is the unique value the board delivers to the organization?
Structure / How does a board makes its decisions and do its work?
Talent / How are new board members and leaders recruited, groomed, oriented, and engaged?Culture / What kind of culture will keep the board aligned, innovative, and agile?
Evaluation / How is board performance assessed?
Like everything else, board performance perfectly reflects board design. Here are 12 classic symptoms of ineffective board design:
Unclear board purpose and mission
Weak and reactive decision making
Out of date, weak or non-existent strategic plan
Poor board & committee meeting attendance & productivity
Weak executive director and/or board president
Board conflicts, divisions, cliques
Unclear, insufficient, or unnecessary roles on the board
Board-staff misunderstanding of each other's capabilities & work
Wrong people on the board for the organization's current priorities
Unclear board priorities
Poor communication and collaboration among board members
Weak strategic & funding relationships & partnerships
Effective boards are not constrained by these design symptoms because they are designed for thrivancy. If even a few of these are true about your non-profit board, it's time to think about redesigning it for better performance and value to the organization.
Scope: What is the unique value the board delivers to the organization?
Boards have three purposes:
Help the organization's leadership team build the organization's assets, talents, and connections,
Help them make strategic decisions,
Help them connect the organization to new opportunities and resources.
The key word here is help. The board’s reason for being is to help the organization’s leadership team succeed. In smaller non-profits, the leadership team may simply be the Executive Director; in larger organizations, it may include the leaders of key program and operational functions.
The board does this primarily by baking a full set of capabilities into the leadership team so the organization’s leadership team has the least needs for a board as possible. Given the current trend of funding constraints, all non-profits will have gaps in their leadership team capabilities.
The board does this secondarily by being a network of complementary assets, talents, and connections. The board is only a surrogate or substitute for leadership team functions when it cannot establish the right capabilities on the leadership team.
The board’s work is to delimit the organization’s talent, asset, and connection constraints. For example, if the organization lacks strategic planning or funding development talent, the board’s job is to provide this. If the organization has bookkeeping but not accounting expertise, the board’s work is to provide this. If there are certain kinds of decisions the leadership team isn’t prepared to make, the board needs to make them for the organization.
Obviously, with a strong talent, asset, and connection leadership team, the board’s work may be simply to be an advisory network for the leadership team, a funding network for the organization, or a talent network taking on strategic projects the leadership team doesn’t have the bandwidth to take on.
Working from this design model, every non-profit board will be unique in it’s value to the organization compared to other non-profits because no two non-profits could have the same leadership team capacities and constraints.
The key to a board’s effective delivery of complementary value is the board’s expertise in accurately assessing the leadership team’s full scope of capabilities and constraints. Without accurate assessment, the board will fail to provide value or will leave certain leadership team capabilities unengaged because the board is unnecessarily providing them. When the board’s purpose is well-designed, everyone’s capabilities are fully engaged for the success of the whole.
Structure: How does the board make its decisions and do its work?
On traditionally designed boards, work gets done in committees (teams) and decisions get made in board meetings. Two of the classic symptoms of a poorly design board is poor attendance at committee meetings and poor preparation for board decisions.
Most non-profit boards have members with service terms but no commitment terms. A commitment term is a board member’s clear monthly time commitment to the board, which can either be arranged as consistent or unique among board members. Like any group, a board can only decide how much work to take on based on its capacity and board capacity is most fundamentally measured in committed monthly hours.
The most productive and efficient board acts like a dynamic network of projects, each adding to the board’s unique value to the organization. Even traditionally-based “standing committees” are far more engaging and successful when they function as time, scope, and budget specific project teams. Project teams are the functional are strategic opposite of weakly attended committees who spend most of their time between crises trying to justify their existence.
In a project network model, there is a Core Team, led by the Board President and populated by people who volunteer to do the work of the Core Team, which is to select board projects and invite other board members to lead and participate on them.
In the old model of board decision making, long before the information age, we postponed any decision that lacked some required number of board members “present.” Now we can use any number of online tools for virtual board decision making. For those of us who constantly rely on complex online data, it is now clear that virtual information has no different potential accuracy and validity than information we exchange face to face.
More importantly, a small informed group will always make a faster and better decision than a largely uninformed group. The implication is that board decisions are best made by a few board volunteers who commit to high levels of information and inclusion of input and feedback from other board members. It is unrealistic and unproductive to expect that all board members will have interest and commitment to every decision the board has to make.
In traditional models, board leadership roles were sustained for one purpose: to facilitate conversations to agreement. In boards where multiple people can volunteer to facilitate any conversations (aka “meetings”) and decisions, leadership positions are irrelevant. Project teams can lead themselves, anyone can volunteer to take discussion notes, and the board can decide together how best to organize itself.
A board doesn't need a "president" or "vice president" to "run meetings." Facilitating work and agreement doesn't require an elected or appointed position, it requires only two things: the facilitator's talents and trustworthiness. Boards only need treasurers if the board manages funds separate from the organization's funds.
High engagement boards only have President positions to have someone to “officially” convene and represent the board to the organization and other entities. In a dynamic information age, the position could not possibly guarantee a person who is more knowledgeable than most other people on the board. The President is not someone with superior position or knowledge, but simply the one with the talent and credibility to convene and represent the Board externally and to the organization.
Talent: How are new board members and leaders recruited, groomed, oriented, and engaged?
There is no ideal size of a board. It can be as small as a handful of people and get into the dozens depending on the board’s scope of purpose and bandwidth as a network of talents, assets, and connections. This is especially true when we design boards as dynamic and focused networks of projects.
There is also no ideal term of a board member. The reality is that some board members want an indefinite engagement of their talents, assets, and connections with the board. They don't want terms, they want flexibility and responsible transparency in their engagement, depending on the dynamics of their careers and their lives. They are willing to make annual agreements with the board on their engagements that serve everyone.
Other board members want a definite engagement within timeframes that work for them and the board. So why can't new board members commit to either indefinite or definite engagements when they come on the board, so the board can plan for the timing and value of replacements when required for continuity of talents, assets, and connections. The idea of fixed boards terms is irrelevant to the actual interests and commitments of board members or the desires of the board and the organization’s leadership team.
The most important consideration of board member composition is the board’s scope of purpose, decisions, and work. As this scope is clear, so is what the board values that it doesn’t already have at the table, and this picture changes and evolves as the organization changes, its world changes, and its strategic directions change. If board project team’s can include non-board member volunteers from the community and beyond, project teams can be ideal for attracting and preparing people to be on the board. The more projects volunteers can engage in, the more knowledgeable they become about the board’s culture and the organization, and therefore the more ideal board member candidates they become.
New board member orientation is best done personally by established board member “mentors” who support new board members through their first year on the board, and possibly beyond that. The board can agree on the consistent content of new board members, but if their engagement as project team volunteers is a mandatory requirement for board membership, board orientation becomes much more efficient.
The best boards maintain an ongoing and up to date map (shared directory) of every board member’s talents and other assets and connections they want to make available to the board. This allows all board members and teams to engage everyone’s capabilities at the highest levels possible.
Culture: What kind of culture keeps the board proactive and aligned?
Effective boards are proactive. They do not practice management by hope or crisis. They maintain a culture of strategic learning and action 365 days a year, not just periodically or in crisis.
This means that the board is constantly focused on new strategic questions and actions that drive new strategic learning and agile resilience to the unpredictable dynamics of its environment.
The board makes sure it and the organization share a common vision of the future - a picture of a desired future which guides all strategic decisions and learning directions.
It stays aligned with the organization and its leadership team with continuous transparency about everything it’s considering, deciding and doing. It keeps the organization and the leadership team transparent in everything it’s considering, deciding, and doing. Transparency drives the kind of alignment that keeps the board effectively complementary in its engagement and scope of capabilities. This keeps the board more aligned than fragmented and more proactive than reactive.
To the extent that a board sustains a culture of authentic trust where generosity is the core principle of connection, the board acts with high levels of wisdom, productivity, and resilience.
Evaluation: How is board performance assessed?
From a strengths-based and high-engagement perspective, one of the core success indicators of a board is the breadth and depth of how well members of the organization and board are engaged in the vision of the organization. Successful boards are full of people who feel that their available assets, talents, and connections are well-engaged in the board’s purposes.
Because the purpose of the board is to help the organization’s leadership team succeed, a key indicator of board success is the success of the leadership team. Assessment of the leadership team’s performance and establishment of their ongoing success indicators are key to the board’s sense of its own effectiveness and efficiency.
Board members at least annually can assess their own level of engagement on the board, the board’s overall productivity, and the organization’s success. None of this precludes the value of immediate feedback to and from the board and board members so improvements and innovations can be continuous.
Finally, the board can assess its value to the organization relative to the specifics of its areas of complementarity. The board can assess for example the quality of its advising the organization, its fundraising, and its financial management of the organization’s budget.
Implication for the future of boards
It’s hopefully obvious that non-profit boards, to be effective, are wise to diverge from traditional board design models. Many of these models are totally out of date for an information age and an environment where change is a constant.
There are as many ways to successfully design boards as their are non-profits who benefit from good boards. In each case, the design is shaped by the capabilities and constraints of the organization and by the demands and changes of the environment. Depending on the context, boards will sometimes be more governing boards and in other more advisory boards. The more boards develop the capabilities of the organization’s leadership team, the more it moves from governance to advising and connecting the organizations to new networks of resources, opportunities, and possibilities.
The best news is that boards can redesign their bylaws to reflect any kind of agile and effective design options possible, and reinvent themselves when valuable.
Every corporate, religious, and governmental community will have more talent than necessary for non-profit boards. The scope of talent or the passion and generosity of talent is not the question. Non-profits thrive when their boards are designed in ways that engage these talents intelligently and innovatively.
Boards cannot and will not be more effective by inserting new members into ineffective board design models. As funders demand more collaboration, innovation, and agility of non-profits, their boards must set the example in collaboration, innovation, and agility.
Organizations will be as successful as their boards and their boards, when well-designed, will be vital to their success and thrivancy.
