abcs of building better boards

2009 . Jean Block Consulting, Inc. 1

Best Practices of Best Boards

Governance Responsibilities

Presented by Jean BlockJean Block Consulting, Inc.


Governance Overview

The Board is ultimately responsible for setting the organization’s strategic direction.

The Board is ultimately responsible for effective and efficient governance of the organization.

The Board is ultimately responsible for ensuring the organization operates to serve its mission and purpose.

The Board supports the organization by making an annual financial contribution and actively engages in fundraising.


Legal & Fiduciary Responsibilities

Duty of Care: Board members should act in good faith with the care that an ordinarily prudent person would exercise under similar circumstances. (The Board speaks with one voice and respects the wishes of the majority/The Board is educated and prepared).

Duty of Loyalty: Board members must put the interests of the organization first, above personal or professional interests (conflict of interest issues).

Duty of Honesty: Board members must act in accordance with the organization’s stated mission and applicable laws. (Also bylaws issues).


Sarbanes-Oxley Implications

Adopted in 2002 for publicly-held corporations.

Some factors apply to all corporations:

Whistle-Blower Policy

Document Destruction and Retention Policy

10/03 White Paper by Board Source and Independent Sector.

Many recommendations adopted in newly revised IRS Form 990.


New IRS Form 990

Phased in:

$1 Million and above for 2008 fiscal year

$500K for 2009 fiscal year

$200K for 2010 fiscal year

Less than 200K - 990EZ

Less than $25K – 990N


990 Governance Oversight

Huge implications for nonprofit governance.

Perceptions and Implications of Disclosures.

Conflict of Interest – Relationships

The Board should review and discuss in detail.

Board Listed.


Be Prepared!

www.BoardSource.org: http://www.boardsource.org/dl.asp?document_id=558

www.IRS.gov: http://www.irs.gov/charities/article/0,,id=185561,00.html

www.guidestar.org

http://www.boardsource.org/

http://www.irs.gov/

http://www.irs.gov/charities/article/0,,id=185561,00.html

http://www.g/



Board Performance Evaluation


Annual Self-Evaluation

Assess individual member performance.

Assess full Board performance.

Assess Governance performance.

Assess Fiscal Management.

Assess HR Management.

Assess Board Administrative Management.

Use as Tool for Strategic Planning.

Tool: Exploration – Management by Assessment. Visit www.socialenterpriseventures.com



Management Tools

The ABCs


A. Start at the Beginning

Question: What makes the wheels come off the Board Bus?

Answer: Almost always - lack of clarity, honesty and consistency in recruitment.


A. Get the Right People on Board

Ensure a Consistent Message About Expectations, Roles and Responsibilities

Recruitment Packet:

Time requirements in detail.

Talent – serve on Board committees.

Treasure – make annual contribution.

Roster, annual report, financials, etc.


A. Get the Right People on Board

Develop a Strong Nominating Committee…Business as usual, or:

Standing committee of the Board.

Chaired by president-elect, past president, or seasoned member.

ED serves as advisory member.

Include at-large members.


Nominating Committee Tools

Matrix

What skills are needed?

When are they needed?

Who? Brainstorming.

Relationship to organization?

Plan to recruit.


Nominating Committee Tools

Job Description

Title, Reports to, Role, Term.

Time Expectations: attend all board meetings,

participate actively in a committee, attend retreats, special events, etc.

Obligations: Support the mission, make annual contribution,

monitor financial performance, develop strategic direction, ensure regulatory requirements are met, advocate for the organization, abide by the duties of care, loyalty and honesty, etc.

Be Specific! Download a sample at www.jblockinc.com


B. Managing the Best Board

Orientation Required for New Board Members Governance and fiduciary duties.

Budget and financials (Form 990).

Strategic plan.

Mission, vision and core values.

Policies and procedures.

Conflict of interest.

Connection!



Annual Planning Retreat

Review mission, vision, core values.

Assess current plan.

Long term vision = 12 month plan of work.

Focus forward, build consensus.

Develop action plans with accountability and time lines for achievement.

Team building and fun!



Keep the Annual Plan Alive

Written reports at every meeting.

Progress within goals.

Issues requiring Board action or discussion with documentation.



Establish Effective Committees

What is required to achieve the annual plan of work?

Action plans shared with full Board.

Assess progress at every meeting.

Sunsets.



Keep the Right People on the Board

Term Limits.

Average is 3 yrs, renewable once.

Retire to Advisory or Emeritus Status.



Board Commitment Letter

Restate job description.

Sign annually.

Make financial commitment.

Escape clause: I agree that if, at any time, I am

unable to fulfill the commitments as a member of the board of directors, I will give notice of my resignation to the president of the board.

Download a sample at www.jblockinc.com



Hold Effective Meetings

Send agenda, minutes, financials, reports prior to meeting.

Delegate committee work to committees.

Use Robert’s Rules.

Stick to the agenda.

Begin and end on time!



Deal with Unproductive Board Members

You get what you accept and what you reward!

Term limits.

Commitment letters.

Keep performance expectations high.


C. Recognize, Reward and Thank

Timely and Meaningful!

One size does not fit all.

Tangible.

Intangible.

Include their supporters and stakeholders.


More Resources

www.boardsource.org

www.independentsector.org

www.guidestar.org

http://www.boardsource.org/

http://www.independentsector.org/

http://www.guidestar.org/


Thank You!

Thank you for attending this webinar!

Contact me:

www.jblockinc.com

505.899.1520

http://www.jblockinc.com/