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Leading Age Oregon
October 2014
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Reframing the Work of Nonprofit Boards
Best Practices & Case Studies
Dennis Russell, President/CEO MHS Consulting
Building Organizational Strength
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Mission: Strengthening faithfulness and
effectiveness of nonprofit organizations
A National Faith-based
Nonprofit Network
ConsultingFormed in 1998
Ave. 250+ Clients
Annually
Alliance74 Members
(14 Sponsored)
Internationalpartnerships
emerging
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Alliance
Development and delivery of services
that transform member organizations
• Sustaining core identities and relationships
with community of faith
• Governance development
• Collective business/product development
• Alliance and affiliation formation
• Building coalitions internationally
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• Strategic and Operational Enhancement
• Strategic Positioning/Planning
• Due Diligence/Prospect Consideration
• Organizational Performance Assessment
• Market Intelligence
• Financial Analysis/Feasibility
• Leadership Transition, Executive Recruitment
and Interim Placement
• Governance Support & Development
Consulting
Serving nonprofits beyond the network
for over 15 years
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Broad Trends in NFP Governance
Smaller boards
Fewer standing committees
Greater delegation to management
Fewer meetings
Board monitoring of key performance indicators (dashboards)
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Broad Trends in NFP Governance, cont’d.
Greater attention to strategic/generative work
Greater diversification on boards
Greater sophistication in structures to support fundraising
Increased social accountability
More rigorous board-driven evaluation and growth
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“Nonprofit Governancein the United States”
(Representing 5,000 NFPs)
Source: Francie Ostrower, “Nonprofit Governance
in the United States: Findings on Performance
and Accountability from the First National
Representative Study,”
Some interesting Tidbitsfrom the study:
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(minimalist approach) (Sarbanes-Oxley 2002)
1. Having an external audit
2. Having an independent audit committee
3. Rotating audit firms/lead partners every 5 years
4. Having a written conflict of interest policy
5. Filing an annual 990
6. Having a formal process for employee complaints
7. Having a document destruction and retention policy”
Standards of Good Governance
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Source: Ostrower, “Nonprofit Governance in
the United States,” The Urban Institute, 2007
Key Findings
• Corporate (business)
individuals on board
• Higher racial/ethnic diversity
• Reliance on government
funding
• Larger organization size
Correlation to good governance…
Positive:
• CEO as board member
Negative:
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Source: Ostrower, “Nonprofit Governance in
the United States,” The Urban Institute, 2007
Board Activity Levels (representing 5,000 NFPs)
12BoardSource Nonprofit Governance Index 2012
Report Card for 10 Basic Board Responsibilities
Mission
Financial Oversight
Legal/Ethical Oversight
CEO Support
CEO Evaluation
CommunityRelations
Recruitment
Fundraising
MonitorPerformance
Strategy
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Assembling Your Model of Governance
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Approaches to Governance
• Roles and
Responsibilities
• Policy Governance®
• Governance as
Leadership
• Hybrid Models
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Ten Basic Responsibilities
1. Determine mission and purposes
2. Select the chief executive
3. Support and evaluate the chief executive
4. Ensure effective planning
5. Monitor and strengthen program and
services
Richard T. Ingram, Ten Basic Responsibilities of Nonprofit Boards, BoardSource, 2010
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Ten Basic Responsibilities, cont’d.
Richard T. Ingram, Ten Basic Responsibilities of Nonprofit Boards, BoardSource, 2010
6. Ensure adequate financial resources
7. Protect assets and provide financial oversight
8. Build a competent board
9. Ensure legal and ethical integrity
10.Enhance the organization’s public standing
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Policy Governance ®
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Governance as Leadership
Generative“Why are we doing this?”
“What are the possibilities?”
Fiduciary“How are we doing?”
Strategic“What are we doing?”
“Where are we going?”
Adapted from Governance as Leadership, Chait, Ryan, Taylor
Context of
Mission/Values
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Fiduciary Work
• Keep the organization faithful to its commitments
• Hire, supervise (and evaluate) CEO
• Assure compliance with laws and regulations
• Assure that all resources are utilized well
• Duties of care, loyalty and obedience
• Rear View Mirror Focus
Adapted from Jill Schumann (2014), based on
Chait, Ryan, and Taylor, Governance as Leadership,
(Hoboken, New Jersey: John Wiley & Sons, Inc., 2004)
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Strategic Work
• Study trends, do strategic analysis, consider alternative strategies/pathways
• Set strategic direction and approve a strategic plan
• Make decisions that have significance for future well-being of organization
Adapted from Chait, Ryan, and Taylor, Governance as Leadership,
(Hoboken, New Jersey: John Wiley & Sons, Inc., 2004)
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Generative Work
• Learn and discern about what is going on in the environment
• Interpret history
• Explore issues before a decision is required
• Reflect on meaning in ambiguous circumstances
• Define mission and deepest held convictions
• Focus critical questions: ask why or why not
Adapted from Chait, Ryan, and Taylor, Governance as Leadership,
(Hoboken, New Jersey: John Wiley & Sons, Inc., 2004)
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“Generative Work” Defined
“Generative” can be
understood as work
that focuses on an
organization’s “roots”—
its mission and
deepest held
convictions, as well as
its work on “wings”—
the possibilities ahead.
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A Few Promising Practices
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Be intentionalBoard
recruitment
Board structure/ policy
Board culture
Ongoing education
Evaluation of performance
Ongoing improvement
Leadership succession
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• Any approach has strengths and weaknesses
• Habits (some bad) are hard to change
• Choose an approach that gives you a way of
thinking concretely about what you are doing.
Choose an approach to governance
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• Recruit intentionally
• Orient with vigor
• Use mentors
• Indoctrinate in culture
quickly
• Build group cohesion
Own your own work
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• Board member’s job description
• Code of covenant or conduct
Clarify Expectations
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Build wise agendas—get
to the important stuff!
Use agendas and time as tools
Time is a precious
resource—use it wisely.
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Sample of a Consent Agenda
1. Consent Agenda
a. Board meeting minutes
b. Contract to retain HR
Consultant
c. Marketing Committee
meeting minutes and report
d. Executive Director’s report
2. Finance Report
3. Discussion Item
• Change recommendation
for XYZ Program
and so on…
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Insist on well-focused executive reports
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Develop very good dashboards
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• Meeting evaluation
• Regular board assessment
• Peer reviews at time of
reappointment
• Ongoing learning
• Growth/development
Evaluate Your Work
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Design meetings thoughtfully
• Processes that fit results
• Processes that engage all
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Develop a Policy Framework
• Develop board policies to guide work
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Create or re-charter a Governance Committee
2.11.1 Ensures periodic review of the bylaws at least
every five years and board policies at least every
three years.
2.11.2 Ensures that effective mechanisms are in place for
the nomination and election of individuals to the
board.
2.11.3 Ensures that effective mechanisms are in place for
dialogue with members and with relating
denominations.
2.11 Governance committee:
Source: MHS Board Policy Manual
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2.11.4 In consultation with the President/CEO, develops
a profile reflecting desired perspectives and skills
for appointments or elections to the board and
maintains a roster of individuals who would bring
such perspectives and skills to the governing
board. The committee makes this information
available to the relating denominations and to the
members' nominating committee.
2.11.5 Takes responsibility for ongoing growth and
development of the board, including annual
board and individual assessments.
Create or re-charter a Governance Committee
Source: MHS Board Policy Manual
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2.11.6 Ensures that peer assessment of board members
are conducted prior to re-election or
reappointment to the board.
2.11.7 Chair of the Governance committee annually
reviews Conflict of Interest forms completed and
signed by board members and reports any
questionable disclosures to the committee.
2.11.8 Ensures that a board member orientation process
is in place and reviews the process at least once
every three years.
Create or re-charter a Governance Committee
Source: MHS Board Policy Manual
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Beginning to work more generatively and strategically
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Then…
Development
Time
How do we manage “compression”?
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Now…
Development
Time
How do we manage “compression”?
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41Adapted from: Navigating the Organizational Lifecycle (BoardSource)
The Nonprofit OrganizationalThe Nonprofit OrganizationalThe Nonprofit OrganizationalThe Nonprofit Organizational
LifecycleLifecycleLifecycleLifecycle
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Market responsiveness
Faithfulness to
mission/core convictions
Leadership wisdom requires integrationHigh
Low High
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Strategic Work
Adapted by Rick Stiffney from “Thinking Strategically” by Dan Beckham
A Continuum of Persistence and Flexibility
“Experience teaches that detailed forecasts “Experience teaches that detailed forecasts are regularly defeated by realityare regularly defeated by reality.. -Dan Beckham
unchangeable fluid
Mission Values Vision Strategies Tactics
Nonnegotiable(Persistent)
Minimum Specs(Flexible)
Multiple affiliation models
Governance / Administrative
Integration
Low High
Loose
web
Network
Loose
Federation
Strong
Federation
Reserved
Powers
Subsidiary
High
Leveraging Opportunities / Resources44
