Specific Expectations of Board Members

-- Anonymous, November 25, 1998

Answers

The following is excerpted from the Minnesota Council of Nonprofits' new "Principles and Standards of Nonprofit Excellence. It includes an overall statement about Board Governance followed by sections on Board Responsibility, Board Composition, Conduct of Board, and Conflicts of Interest.

GOVERNANCE Elected or appointed, volunteer boards of directors who are committed to the organization's mission and leadership govern nonprofits. A nonprofit board determines the mission, strategic direction, and future programming of the organization. A nonprofit board ensures and nurtures adequate human and financial resources and actively monitors and evaluates the organization's executive director/CEO, as well as service and financial results. Nonprofit board members approve and systematically implement policies to ensure achievement of the mission of the organization and to prevent perceived, potential, or actual conflict of interest.

A. Board Responsibilities

1. The board should engage in ongoing planning activities as necessary to determine the mission of the organization and its strategic direction, to define specific goals and objectives related to the mission, and to evaluate the success of the organization's services toward achieving the mission.

2. The board should approve the policies for the effective, efficient, and cost-effective operation of the organization.

3. The board should annually approve the organization's budget and assess the organization's financial performance in relation to the budget at least four times per year.

4. The board is responsible for the financial health of the organization and should actively participate in the fundraising process through members' financial support and active seeking of the support of others. As part of the annual budget process, the board should review the percentage of the organization's resources spent on program, administration, and fundraising, with a goal of at least 70% of revenue used for programs.

5. The board should hire, set the compensation for, and annually evaluate the performance of the executive director/CEO.

6. If the organization employs staff, the board should annually review its overall compensation structure, using industry-based surveys of salaries and benefits. The board should ensure that a livable hourly compensation is paid to all employees, whether full- or part-time. The board should ensure that sufficient funds are allocated to contribute to full- time, permanent employees' medical insurance and retirement plans. The board should establish policies, when appropriate, on employee benefits, vacation, and sick leave.

7. The board should approve written policies and procedures governing the work and actions of its employees and volunteers. These polices and procedures should address the following: working conditions; evaluation and grievance procedures; confidentiality of employee, volunteer, client, and organization records and information; and employee and volunteer growth and development.

8. The board should ensure that an internal review of the organization's compliance with known existing legal, regulatory, and financial reporting requirements is conducted annually and that a summary of the results of the review is provided to the entire board.

9. The board should periodically assess the need for insurance coverage in light of the nature and extent of the organization's activities and its financial capacity. A decision to forego general liability insurance coverage or Directors and Officers liability insurance coverage should be made only by the board of directors.

B. Board Composition

1. The board members should be personally committed to the mission of the organization, willing to volunteer sufficient time and resources to help achieve the mission of the organization, and understand and fulfill their fiduciary responsibilities.

2. No more than one employee of the organization should serve as a voting member of the board of directors and staff should not serve as chair or treasurer of the Board.

3. To allow for significant deliberation and diversity, the majority of the board should be made up of at least seven persons unrelated to each other or staff.

4. The organization's bylaws should determine term limits that establish individual terms of no more than three years, allow individuals to serve no more than three consecutive terms, and require at least one year intervening before eligibility for re- election after serving the maximum number of consecutive terms.

5. Board membership should reflect the diversity of the organization's constituencies.

6. Board members (who are not employees) should not receive compensation for their board service, other than reimbursement for expenses directly related to board duties.

7. The board nomination process should be announced to the organization's public, so that interested persons or community members can nominate themselves or others.

C. Conduct of the Board

1. The board should be responsible for its own operations including the education, training, and development of board members; annual evaluation of its own performance; and, when appropriate, the selection of new board members. There should be written job descriptions for board members, officers, committees, and committee members.

2. The board should have written expectations for board members, including expectations for full board participation in fundraising activities, committee service, and service activities.

3. The board should meet as frequently as needed to adequately conduct the business of the organization. At a minimum, the board should meet four times a year with a quorum present.

4. The board should have written policies that address attendance and participation of board members at board meetings including a process to address noncompliance.

5. Written meeting minutes should reflect the actions of the board, including reports of authorized board committees. The board should permanently retain the minutes, distribute them to board and committee members, and make them available for public review.

D. Conflict of Interest

1. The board should establish conflict of interest policies regarding board, staff, volunteers, contractors, and organizational partners or allies and adhere to these policies in all dealings. The policies should include an obligation of each board member to disclose all material facts and relationships and refrain from voting on any matter when there is a conflict of interest.

-- Anonymous, December 08, 1998

The following is a draft job description for Board members which was distributed to COMPAS Board members in the fall of 1997. It was never formally adopted by the Board.

COMPAS Board of Directors Job Description

The Board of Directors of COMPAS acts in cooperation with the staff to further the mission of COMPAS. Specific responsibilities of members are to:

1. Be informed. 2. Be committed to COMPAS mission, goals, programs and policies. 3. Understand the budget and all its financial and programmatic implications. 4. Determine the resources COMPAS needs and help secure those resources. 5. Make cash contributionswhat is for you an important gift. 6. Participate actively in fundraising by: * Cultivating potential donors. * Providing the staff with information and leads. * If possible, soliciting potential donors. 7. Commit time by: * Attending and participating in board meetings. * Being an active committee member. * Looking for new board talent. * Completing accepted projects and tasks. * Learning about COMPAS programs by attending events, residencies, trainings, or other activities, reading publications and other printed materials, and by talking with artists and staff. 8. Represent and be an advocate for COMPAS in the community. 9. Work with the COMPAS staff to formulate, approve, and review long-range plans. 10. Help the board come to group decisions by: * Making certain proper research and study have been done. * Being objective and listening with an open mind. * Using creative thinking and problem-solving. * Viewing situations from COMPAS perspective. * Accepting the decision of the majority. 11. Enjoy and benefit from your association with each other and know that service to COMPAS will be, among other things, joyful and rewarding.

-- Anonymous, December 09, 1998

This is new for me * Expectations - attend and be as informed/prepared as possible - understand role of board/role of admin and staff - be an advocate for the programs/process and arts in general - contribute as you can - be involved in a committee - I believe this - but find it difficult to implement given distance and time restraints

-- Anonymous, December 01, 1998

Expectations -

attend and be as informed/prepared as possible understand role of board/role of admin and staff be an advocate for the programs/process and arts in general contribute as you can be involved in a committee - I believe this - but find it difficult to implement given distance and time restraints

-- Anonymous, December 01, 1998

Jeff: I have highlighted several things in all caps. Not a lot to add, but as I mentioned I want to be sure we reference community relations policies. We have been without heat for more than 12 hours and overnight Sunday. Unfortunately, that has kept me from focusing on this in the way that I want to. But in general I think this looks good. I will attempt to look at other parts during the day.

Ron Clark

-- Anonymous, December 21, 1998

some good ideas,

Roles and Responsibilities of Board Members

by Katie Burdick

A board of directors can make or break an organization. In 20 years of working with activist groups I have watched numerous groups sink to oblivion and rise to the stars on the basis of their boards.

The National Center for Nonprofit Boards (NCNB) has identified five basic assumptions with respect to boards of directors:

Board and board members responsibilities are fundamentally the same for all organizations, How boards and board members actually fulfill their responsibilities will vary, There is no generic model of board size, composition or organization that works for all circumstances, All organizations will undergo one or more metamorphoses over time and, Boards and board members begin to reach their optimum levels of performance when they exercise their responsibilities via asking good questions rather than managing programs, micro managing the organization, or implementing their own policies. With these basic assumptions in mind the seven primary responsibilities of a board of directors are to:

Determine the organization's internal policy; Select, support, and evaluate the executive director; Ensure effective organizational planning; Ensure and manage financial resources; Serve as a court of appeal; Assess its own performance; Replace itself; Monitor the organization's programs and services. Each of these responsibilities is, of course, important to the functioning of an organization.

Establish policy

Policies are basically the rules and procedures for how the organization functions. Policies serve as guidelines for managing the organization and, if properly established, should prevent the board from constantly needing to approve staff and committee decisions. The policies set the tone, and in some cases legal structure, for the organization. A board should establish policies on several key areas: board procedures and operation (recruitment, orientation, evaluation), financial controls (reporting audits, etc.), public relations (who speaks when, etc.), fundraising (methods to be used, who you will/will not accept money from).

To be effective, policies should be developed with staff assistance, approved by the board, distributed throughout the organization, consistently enforced, regularly reviewed and updated and consistent with the organization's bylaws and mission. The absence of clear policies, or the avoidance of implementation, can create situations that undermine board authority, jeopardize organizational efficiency and risk the smooth functioning of the group.

Executive Director

For many boards the presence of an executive director (ED) is a form of the game chicken ... momentum toward collision until someone gives. The recruitment, hiring, and evaluation of the ED are key aspects of the board's responsibilities. There are many publications, especially from the National Center for Nonprofit Boards, that provide guidance on this challenging role.

Until a board is clear as to the precise job description and expectations for the position of the executive director, little success can be expected. Frequently an ED is hired to "rein-in" a runaway board chair or founder, break an impasse on policy, implement a new management direction, respond to funding increases, or address board burnout. If these expectations are spoken, there is a chance for the position to be successful. However, without an honest group declaration of the actual role of the ED, many regrettable (and sometimes litigateable!), confusions will rise.

Ongoing evaluation is another aspect of personnel management that is frequently avoided. A documented, planned, formal, and structured annual review is the responsibility of the board. The development of performance criteria is a process that many boards find uncomfortable, almost as if defining expectations is disloyal or an indicator of lack of faith. Yet more disagreements arise due to lack of such a process than ever arise because of such a process.

Organizational Planning

A yearly program plan/budget and fundraising plan are essential to a nonprofit organization. These documents and the process by which they are developed are important board responsibilities. Avoiding this process, along with the consideration of longer range planning, is common among boards. "If it isn't broken, don't fix it" is frequently used to justify avoiding this yearly discipline. Yet without the attention of the board, many groups flounder when their fundraising and program goals do not match.

Financial Resources

The intricacies of nonprofit accounting do not lend themselves to board scrutiny. Yet the board is legally responsible for ensuring that the organization follows proper procedures, uses good judgment in administering its affairs, and stays invulnerable to difficulties with financial audits.

Perhaps the most important, avoided, and dreaded of board responsibilities is fundraising. Everyone wants money to implement programs but no one wants to raise it. The reliance on staff to "write lots of grants" is both dangerous and unrealistic. Yet the twin "demons" of membership and patron/donor programs are avoided due to perceptions of hard work and avoidance of potentially uncomfortable situations. If you were to identify the most chronic and damaging deficiency in boards, it is their unwillingness to fundraise. The executive director is frequently delegated this job and many an ED has left an organization due to unrealistically high (or confused) expectations and lack of assistance and cooperation in meeting fundraising goals.

There are a variety of ways to get assistance on this issue, the most direct being by hiring a consultant to assist you in developing a fundraising program that is based in the "reality" of your organization. Board members may also benefit by attending trainings and workshops, buying or renting tapes and publications, and conducting an in-house workshop or brainstorming session.

Court of Appeal

Although the board should avoid dabbling or interfering in personnel management, there are times when the board can and should serve to resolve internal conflicts. This is not to imply that the board is the place to fight out personality conflicts or the results of rumor mongering. It is the responsibility of the board to differentiate between petty squabbles and important rifts or conflicts. The tone of interpersonal interactions that is set by the board will be reflected by the staff. If the board is split by rampant infighting, that will reflect itself in staff. It is not appropriate for the board to enlist staff to mimic its disputes nor to manipulate staff to justify predictions.

Assess its Own Performance

If the board is not able to assess itself then the organization has little ability to evolve. Avoiding this introspection will not avoid the consequences. The use of term limits, annual needs assessments to identify recruiting needs, creation and regular review of board job descriptions, implementation of a real orientation plan for new members, monitoring of the boards ability to set and keep agendas, monitoring of ability to hold meetings on time and on topic and other similar approaches are necessary to ensure that the emperor does have on new clothes. A board that is afraid of looking at itself has more to fear than a board that is willing to hold up a mirror and really look.

Replace Itself

Board insularity is a common and sometimes fatal disease. Comfort in the status quo, a founder who wants to avoid challenge or loss of control, a ruling clique who wants to keep it that way, or a board that doesn't want to deal with training a newcomer are all vulnerable to the worst consequence of low recruitment rates and board burnout.

Monitoring the Organization

Organizational self evaluation is an important and overlooked aspect of the board. Establishing criteria upon which to judge your success, both programmatically and organizationally, is the mark of a mature board. "If I can't see it, it can't hurt me" definitely does not work as a management tool. The more scrutiny (do not read interference) that is brought to the overall functioning of the group, the better able the group is to adapt to changing times and situations.

As the board has ultimate legal responsibility for the organization, this monitoring function is not voluntary. The issue with most boards seems to be the "how-to" rather than the "why." The systems developed to deal with the other board responsibilities listed above should, in the aggregate, be sufficient to achieve the goal. However, if monitoring the organization is not an intentional process, then the data and insights gleaned from the rest of the management responsibilities will not be fully applied.

Katie Burdick is a planning and land use consultant in Montana. She is the former coordinator of consulting and training for the Northern Rockies Action Group. Katie can be reached at Burdick and Company, 30 S. Harrison, Helena, MT 59601.

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-- Anonymous, December 21, 1998