Boards & Governance

Thank you to National Council of Nonprofits for Sharing: 

Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission.

One of the most important responsibilities for many boards is to hire and set the compensation of a talented CEO/executive director to run the day-to-day management activities of the organization. When there are paid staff in place, rather than steer the boat by managing day-to-day operations, board members provide foresight, oversight, and insight: think of them as up in the crow’s nest scanning the horizon for signs of storms or rainbows to explore, perhaps with a pot of gold at the end! Yes, board members – your role as stewards of the nonprofits DOES involve fundraising. And…at the National Council of Nonprofits we are big promoters of the important role board members play as advocates for the nonprofit’s mission.

Interested in Board Training in Vermont? Take a look at our upcoming events to see what is coming up! Scroll down for a list of Board training professionals in Vermont. 

The Basics

What’s the role of the board of directors of a nonprofit corporation? Just as for any corporation, including nonprofit corporations, the board of directors have three primary legal duties known as the “duty of care,” “duty of loyalty,” and “duty of obedience.”

In sum, these legal duties require that nonprofit board members:

  1. Take care of the nonprofit by ensuring prudent use of all assets, including facility, people, and good will; and provide oversight for all activities that advance the nonprofit’s effectiveness and sustainability. (legal “Duty of due care”)
  2. Make decisions in the best interest of the nonprofit corporation; not in his or her self-interest. (legal “Duty of loyalty”)
  3. Ensure that the nonprofit obeys applicable laws and acts in accordance with ethical practices; that the nonprofit adheres to its stated corporate purposes, and that its activities advance its mission. (legal “Duty of obedience”)

Practice Pointers

  • Tip sheet for candid conversations for boards about typical governance challenges (National Council of Nonprofits)
  • Start your new board members off on the right foot with an orientation program that introduces them to the basic roles and responsibilities of serving as a nonprofit board member. Don’t forget to include those special issues that pertain specifically to your nonprofit’s mission, plus information on: governance policies (so that all board members are reminded about their legal and fiduciary duties); accountability practices (such as the need to disclose conflicts of interest); and the responsibility to hire, review the executive director’s performance, and approve annual compensation.
  • When board members are recruited, consider using a board member contract to ensure that everyone’s on the same page (Blue Avocado) and don’t forget that fundraising and making personal contributions are widely accepted expectations for board members.
  • Job descriptions can help board members feel comfortable in their roles as officers of a nonprofit. Download a sample. (BoardSource and Bridgespan)
  • Help board members Stand for Your Mission, with this discussion guide. (Alliance for Justice/BoardSource/Forum for Regional Association of Grantmakers/National Council of Nonprofits)
  • Yes, the role of board members DOES include helping to raise money for the nonprofit! Help board members understand that this usually includes making a personal contribution. (Bridgespan)
  • Consider using a consent agenda as a way of saving time during meetings, and focusing the board’s work on high priority issues that benefit most from discussion and discernment. Many governance gurus suggest putting the most important item on the agenda first – in order to leave enough time for full discussion.
  • Evaluating the performance of the executive director is one of the most-likely-to-be-avoided but most important roles that a board can play in supporting a nonprofit’s sustainability.  (Minnesota Council of Nonprofits)
  • Board members are always curious, and sometimes surprised to learn that they can – in limited circumstances – be personally liable for a nonprofit’s financial responsibility. One notable circumstance is for failure to pay withholding taxes on an employee’s wages.
  • Board members may also be curious about insurance policies that cover their volunteer service. Directors and officers liability insurance for nonprofits doesn’t only cover board members and officers; it also generally covers the CEO and other staff as well as the nonprofit’s corporate actions.
    • The Nonprofit Risk Management Center offers many resources, including free online tutorials that are useful to introduce board members to insurance for nonprofits and risk management.

Education for Board Members

Not everyone is familiar with the roles and responsibilities of board members for a charitable nonprofit and fortunately educational programs for board members abound. The harder issue is asking volunteers to take time to learn about their role and grasp what makes a great board member. Luckily there are watch-from-your-computer options, although in-person, and especially peer-to-peer programs, are often the most useful – and fun.

  • Many state associations of nonprofits offer special programs for board members, whether by webinars, or in-person, on governance topics, including basic board roles and responsibilities.
  • Other community-based sources for board education include: local volunteer centers, community foundations, and university/college nonprofit management programs.
  • Another local option is to engage a consultant with expertise in nonprofit management to work directly with the board members of your nonprofit.
  • A pro bono option may be available too: consider asking the board chair of another nonprofit to give a presentation to your nonprofit’s board. Peer-to-peer learning is powerful!
  • On a national level, BoardSource is a leading authority on board governance issues, and offers numerous publications, as well as a national leadership forum, webinars, and a blog.
  • Read about important policy issues that impact all charitable nonprofits.
  • We’ve compiled lots of tips and tools about effective meetings.

Resources

Common Good Vermont Interview with Lizann Peyton

lizann peyton

As part of our continuing series on nonprofit effectiveness, Common Good Vermont asked Lizann Peyton to shed light on the importance of building board leadership. You can watch a complete recording of Managing Board Chair and Executive Director Relationships, here.

What is the biggest leadership challenge for nonprofits today?

I see two inter-related challenges:

  1. First: Finding good board members who have the time, understand the importance of sticking to governance, commit to follow-through, are eager to fundraise by talking to donors about what they love about the organization (not arm-twisting for money), spread good news about the organization in the community every chance they get, bring teamwork skills instead of personal agendas, and are willing to step up as committee and board chairs. Our communities have only a small pool to draw from in the first place, and there’s a lot of “recruitment fatigue” – both in asking, and being asked, to serve on a board.
  2. And as a result of this comes the second challenge: Finding good board chairs, when this quality probably wasn’t thought of at recruitment time and the job requires additional skills and temperament beyond the ordinary board member. We should think of at least 1/3 of our recruits as needing to have leadership time and willingness, or we won’t have a pool of leadership succession candidates.

Why is it essential for executive directors and board chairs to work closely together?

First of all, we need to take the burden off the executive directors’ shoulders to be the primary managers of board business. Too often, EDs have to take the lead in setting agendas, recruiting board members, keeping members engaged, ensuring follow-through, and reminding boards of their own jobs – including the all-too-often overlooked responsibility to give the ED an annual performance review. EDs have enough to do in their job without taking on the board’s job too, and they often rank “managing the board” as one of the major burn-out factors.

Second, strategic goals and board agendas address the interplay between governance and management. The board and staff each have different areas of responsibility, and failure to interconnect the two often prevents the organization from moving all in the same direction. Finally, the ED needs a safe place to air uncertainties and problem-solve without being judged by the whole board. The job of ED is a lonely one, and partnership with the other “co-leader” of the organization provides a huge source of support for EDs who often can’t share their uncertainties with staff. It’s also a safe place to discuss tensions that might arise regarding troublesome board members, board micromanagement, or difficulties in the board-staff relationship.

What long term impact will this partnership have on the organization?

I’ve seen accomplishment of strategic goals, board recruitment, and fundraising leap ahead when the chair and ED partner to move the agency forward together. Each can rally their respective sphere of influence to be its most productive, and in a coordinated way. Partnership helps the ED function at her or his highest level of productivity, makes board chairs feel more competent and effective, and keeps a balanced relationship between board and staff authority so energy can be directed toward strategic process rather than repeated conflict resolution. And it usually makes EDs and board members a lot more satisfied with their jobs!

Learn More

 

Vermont Board Training Professionals

Andy Robinson
PO Box 350, Plainfield, VT 05667

http://andyrobinsononline.com (Sign-up for his newsletter with Andrea Kihlstedt)

 

Anne Lezak, Principal ADL Consulting
64 Alder Lane
Burlington, VT 05401

annelezak@gmail.com

Katherine Sims 

1286 Hazen Notch Road
Lowell, VT 05847