digArticles

Category: Board

  • Engaging the Board as a Catalyst for Change

    Engaging the Board as a Catalyst for Change 
    by Debra Thompson and Jacqui Catrabone, Strategy Solutions, Inc.

    As an Executive Director (ED), or CEO, of a nonprofit organization you undoubtedly have a lot on your plate. That’s why it’s important that your board of directors align with and help advance the agency’s strategic plan.

    But how can you effectively engage the board to be a catalyst for real change?

    The Standards for Excellence:® An Ethics and Accountability Code for the Nonprofit Sector offers guidance on how to do just that. The first step is a solid strategic planning process. 

    An effective strategic plan is the foundation for board engagement.

    Writer Joel A. Barker once said, “Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world.”

    You probably wouldn’t be the ED of a nonprofit if you didn’t want to make a positive change. However, change can only be made when there is a genuine partnership between the board and staff to implement the strategic plan.

    Clarifying roles between the board of directors and agency staff is an important step in ensuring organizational success.

    Board Responsibilities

    • Governance
    • Decide ‘what’
    • Make policy
    • Set strategic goals
    • Review long term plans
    • Monitor progress

    Executive Director Responsibilities

    • Administration
    • Decide ‘how’
    • Carry out policy
    • Plan to achieve goals
    • Implement plans
    • Monitor progress

    Keep in mind, even though one party is responsible for this list of tasks, the other is also involved. For example, it is the Executive Director’s responsibility to lead strategic planning and engage the board by providing a “work product” that answers these questions for the board to react to:

    • Where are we now? Community needs, organization needs, stakeholder input
    • Where do we want to be? Vision, mission, goals
    • How are we going to get there? Objectives and strategies
    • Who will be doing what? Action plan, board agenda of work, budget, timeframes
    • How are we doing? Quarterly reports, evaluation

    Many organizations believe they’re finished with the strategic planning process once they identify goals and objectives. When the final steps of ‘who will be doing what’ and ‘how are we doing’ are overlooked, organizations get stuck and have difficulty implementing key components of their strategic plan.

    Roles need to be clearly defined and delineated among board members and staff. Once the strategic plan is aligned with your board structure, it IS possible to engage the board to help change the world! Here’s how it’s done:

    Outline specific roles for each committee to help advance strategic plan implementation.

    The way in which you structure your board is a critical success factor in supporting the strategic plan implementation.

    The Standards for Excellence Institute recommends creating three standing board committees:

    1. Executive Committee. ED liaison, strategic plan oversight, emergency action
    2. Finance Committee. Budget, financial oversight, audit
    3. Governance Committee. Board recruitment, board engagement, board performance, bylaws

    As the ED, it’s crucial to think through board roles and the assistance you want in supporting plan implementation. If you can clearly outline requests and requirements for your board and structure them within the context of committee work, they will be engaged in the activities necessary to actually accomplish your goals.

    Debra Thompson and Jacqui Catrabone are licensed consultants, trainers and peer reviewers for The Standards for Excellence:® An Ethics and Accountability Code for the Nonprofit Sector.

    Still feel like you need help engaging your board as a catalyst for change?
    Strategy Solutions is here for you! Don’t hesitate to contact us with any questions. We look forward to seeing your board succeed!

    About Strategy Solutions Inc. 
    For over 25 years, Strategy Solutions Inc. has been providing innovative solutions to ensure the sustainability of nonprofit, public, and private organizations, and to create healthier communities. Our approach is unique and incorporates the expertise of executive-level consulting professionals, rigorous analytical research capabilities, group process techniques, best practices, and proven planning tools, which consistently produce remarkable outcomes.
     

    About the Standards for Excellence Institute:
    The mission of the Standards for Excellence Institute is to promote the highest standards of ethics and accountability in nonprofit governance, management, and operations, and to facilitate adherence to those standards by all nonprofit organizations. For more information about joining the Standards for Excellence Institute or to learn more about the ways the Institute serves nonprofits, visit www.standardsforexcellence.org. 

  • Saying No to Proxy Voting on your Board

    Saying No to Proxy Voting on your Board

    Nonprofits are facing tough choices during this challenging time.

    As we discussed in last week’s 52 Tips blog post, nonprofit board members are needed now more than ever. Organizations are stretched, and need strong support from their governing bodies. The Standards for Excellence code offers the important tenet that “Board members are in a position of trust to ensure that resources are used to carry out the mission of the organization.” Boards cannot allow a lapse in service, especially now when so much is uncertain.

    You may find that board members have great intentions for being excellent board members, but sometimes are simply not able to fulfill responsibilities – such as regularly attending board meetings. Perhaps one of your board members serves as an essential worker (such as a nurse or a doctor or is involved in the food supply chain) and their work in this arena places severe limits on their ability to attend board meetings during the time of the pandemic.

    What if a dedicated board member wishes to participate but cannot attend a board meeting (or two or three or more)? What if the board member asked to send a proxy or a representative in his/her place? For situations like this, it is vital that we refer back to the Standards for Excellence code, especially the benchmark that states, “The board should be composed of individuals who are personally committed to the mission of the organization and understand their roles as fiduciaries in performing the legal duties of a governing body.”

    There is a misconception that an individual board member can delegate his/her vote to another board member when he/she cannot be present at the meeting. This is not the case. Generally, the use of proxies is considered a breach of an individual’s fiduciary responsibility as a board member and is contrary to law in many states. Proxy voting (or sending a representative in place of a board member) is a practice that should be avoided at all costs. In situations like we are experiencing, where in person meetings may be impossible, boards may wish to adjust their regular meeting time or day of the week in order to accommodate board members that may have less time for board activities during the current pandemic. For instance, your board may traditionally meet on Fridays at 10 am, but may find that greater participation can be garnered if you moved board meetings to a weekend or weeknight instead of during its “regular” time. Of course, you’ll want to follow your bylaws regarding providing notice of board meetings. Many boards have likely moved their board gatherings to virtual settings so perhaps the fact that meetings are more efficient and do not include any commuting time may make a move to a time that is not traditional easier for all involved.

    For more information on what voting practices are permitted, we encourage you to check out the Standards for Excellence educational resource packet Board Member Responsibilities which includes helpful resources and discussion on topics such as proxy voting, governance and fiduciary responsibilities, bylaws, board policies, expectations for board members, as well as board member development, training and orientation.

    This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

    We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.

  • 52 tips in 52 Weeks: Check in with your board—Update their profiles

    52 tips in 52 Weeks: Check in with your board—Update their profiles

    Since the Standards for Excellence program’s inception, nonprofits have received advice about how to run their board meetings, recruit new members, and avoid conflicts of interest, just to name a few of the ways we seek to strengthen boards. The Leadership section of the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector is a comprehensive section and includes benchmarks and best practices of the full range of board and staff leadership measures, as well as diversity, equity and inclusion – values applicable to all nonprofits.

    By now, in the midst of the pandemic, you have probably already checked in with your board members to see how they are doing and may have had a virtual board meeting or two. Perhaps you’ve had a few members that have missed a virtual meeting. If you haven’t done so already, it would be a good time to confirm that your board members have access to the technology needed to be active and govern remotely. Also, be prepared to make adjustments to ensure maximum participation. Inquiring about such issues will help everyone stay on the same page and ready to serve.

    While you are checking in, it may also be helpful to gather information to assess the current composition of your board.

    The Standards for Excellence states:

    · “The board should be composed of individuals who are personally committed to the mission of the organization and understand their roles as fiduciaries in performing the legal duties of a governing body;”

    · “The board should establish a rigorous board development strategy for recruiting and selecting new members and ensuring that the board has an appropriate mix of talent, connections to the community, and diversity.”

    Obtain updated biographical sketches for your board members. This information can help you to understand the background and key talents that your board members bring to the board room. This will help to refresh or expand your knowledge of their talents and interests—some of which may be particularly helpful in this time of pandemic.

    Are you bringing on new board members in the coming months? Seize the opportunity to make connections with current members and new members—with folks serving as board member mentors for others. Having bios in hand may help you with matching up such individuals and making rich and meaningful introductions. Profiles can also be shared with new board members through a board handbook or portal to facilitate introductions and team building.

    For more information on the composition of nonprofit boards, we encourage you to check out the Standards for Excellence educational resource packet Board Composition and Independence. This packet includes discussions and resources on board members’ commitment to the organization, employees serving on the board, board recruitment and selection, nominating processes and board development, board diversity, term limits, board size, and the voluntary nature of board members’ service.

    This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

    We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.

  • Moving Ahead with Board Orientation

    Moving Ahead with Board Orientation

    Moving Ahead with Board Orientation?

    In this time when we are all struggling with so many issues related to the pandemic, some of the more “regular” issues (tasks that we typically address annually as part of the regular flow of business) also surface as unexpected challenges.  We know that for many nonprofits, the spring is the time when important onboarding takes place for incoming board members.  Can this occur in the midst of the pandemic with stay-at-home orders and no in-person meetings?  It is an interesting question, to be sure.  My organization conducted its annual board orientation program in the first quarter of 2020 so we do not have to tackle the issue for ourselves at this time; but we are faced with a similar challenge:  recruitment, selection, and orientation of a new staff person to fill a new vacancy.  In this case, we cannot put this staff onboarding on hold as we’re facing intense pressure to perform at a very high level and this is a key position. The same is true for many boards of directors. This is not a time for a leadership void. Rather, it is a time where board strength will be more important than ever. The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector states, “the board should establish a rigorous board development strategy for recruiting and selecting new members …” and “the board is responsible for the orientation, education, and (where appropriate) the removal of board members…”  This is no less true in the midst of international crisis.

    In the midst of the COVID19 pandemic, it is certainly reasonable and appropriate to extend grace and patience to individuals who have been selected to serve and have agreed to join the board but may need additional time in order to fully engage as a new board member.  It may also be appropriate to briefly postpone onboarding due to the essential responsibilities of incoming or current board members.  At the same time, many nonprofits would be well served not to place orientation of new board members on the back burner or on indefinite postponement. This is a tough time in the life cycle of many nonprofits and fresh, new board perspectives (and additional board members) may help the organization tackle the toughest challenges.  When considering these various issues, for many organizations, it may make good sense to orient and onboard new board members even in the midst of a pandemic.

    Consider the ways that you currently orient and train board members:

    • Do you generally host an in-person meeting that is facilitated by board members and staff leaders of the nonprofit?
    • Do you generally share insights and experiences of those served by the organization?
    • Do you review the finances, board member job descriptions, expectations for resource development, and conflicts of interest policies? 
    • Do you share a board handbook with new board members?
    • Do you provide a tour of the organization’s premises?

    With the exception of touring the organization’s facility, all of these activities can be carried out in a remote setting, using free or low-cost webinar or virtual meeting technology.  In fact, for some nonprofits, the current situation may serve as a sort of push or encouragement to finally transition your hard copy-paper board member manual to a well-organized and secure online collection of resources.

    The Standards for Excellence educational resource packet on Board Member Responsibilities is one of our most popular resources, and for those who are developing a new board orientation program, this packet contains a sample orientation checklist as well as a table of contents for a comprehensive board manual. 

    This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner,– one of the over 150 Standards for Excellence  Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

    We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.

  • Remote Board Meetings in the Midst of COVID-19 and Beyond

    Remote Board Meetings in the Midst of COVID-19 and Beyond

    The Center for Disease Control (CDC) has published interim guidance for businesses and employers to reduce the spread of COVID-19 by managing risks of potential exposure. One measure the CDC is recommending is social distancing (remaining out of congregate settings, avoiding mass gatherings, and maintaining distance from others when possible). However, nonprofit boards must continue to govern, and meetings may be even more critical for direct service providers during these difficult times.  The Standards for Excellence: An Ethics and Accountability Code for the Nonprofits Sector encourages each nonprofit board to meet  “as frequently as needed to fully and adequately conduct the business of the organization. At a minimum, the board should meet four (4) times a year.” For all of these reasons, it is important to ensure that your bylaws provide for remote meetings, and how your state law should guide and inform your bylaws.

    To facilitate remote participation in Board meetings, the Standards for Excellence Institute’s Model Bylaws provide as follows:

    • Telephone and Electronic Participation: Directors may participate in Board meetings and vote on matters discussed therein, by means of a conference telephone or similar communications equipment by means of which all persons participating in such meeting can hear each other at the same time. Participation by such means shall constitute in person presence of the Director at the meeting. 
    • Action without Meeting:  Any action which may be properly taken by the Board assembled in a meeting may also be taken without a meeting, if unanimous consent in writing setting forth the action taken is signed by all of the Directors entitled to vote with respect to the action.  Such consent shall have the same force and effect as a vote of the Directors assembled and shall be filed with the minutes.

    You will want to consult your state’s corporate or nonprofit law to ensure that you are acting in a manner that is consistent with the state’s regulations. 

    State law may describe that meetings can take place via remote communication and may provide additional definitions about what constitutes a meeting.  In Maryland, the home of the Standards for Excellence Institute, telephone meetings are permitted as follows: “(1) Unless restricted by the charter or bylaws of the corporation, members of the board of directors or a committee of the board may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. (2) Participation in a meeting by these means constitutes presence in person at the meeting.” 

    Essentially, as long as it is in keeping with your state law, your board can meet remotely using telephone conferencing or other technology (Skype, zoom, etc.), as long as everyone can speak and be heard simultaneously (as if meeting in person). Additionally, the board can act without meeting as long as the vote is unanimous and recorded in writing.

    The Standards for Excellence educational resource packet, Board Member Responsibilities, contains a comprehensive set of model bylaws that can be modified and customized to meet the needs of nonprofits around the country. 

    This educational resource packet and the full series of all packets  – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

  • How Do I Prevent Conflicts of Interest at My Organization?

    How Do I Prevent Conflicts of Interest at My Organization?

    This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

    Its that time of year again! For many nonprofit boards, this is the time of year when all active board members are asked to complete an annual conflict of interest disclosure form. Such forms should be completed when an individual (such as board member, staff member or volunteer with decision making authority) becomes affiliated with a nonprofit organization and annually thereafter. 

    Conflicts of interest involving nonprofit board members, employees, or volunteers can undermine the public’s trust and confidence in any nonprofit. It is important that nonprofits have policies in place to address conflicts of interest to maintain public trust and ensure that the organization is compliant with requirements of the Internal Revenue Code and regulations. Conflicts of interest can not only harm the organization’s reputation but could even result in the loss of tax-exempt status.

    Each nonprofit should have a board-approved conflict of interest policy and statement that is applicable to “board members, staff, and volunteers who have significant, independent decision-making authority regarding the resources of the organization.” A conflict of interest policy should “identify the types of conduct or transactions that raise conflict of interest concerns, should set forth procedures for disclosure of actual or potential conflicts, and should provide a review of individual transactions by the uninvolved members of the board of directors.” (Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector.) The conflict of interest statement should also provide space for individuals to disclose any known interests that they or a member of their immediate family may have.  Each organization should carefully and consistently follow the tenets of its conflict of interest policy throughout the year.

    More information is available in the Standards for Excellence educational packet on conflicts of interest which outlines what conflicts of interest are, how to identify them, and what conflict of interest policies and procedures should look like. This educational resource packet and the full series of all packets  – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute. Amy Coates Madsen, Director of the Standards for Excellence Institute, has also written a blog entitled Three Tips to Prevent Conflicts of Interest at Your Nonprofit.

  • Four Things Your Nonprofit’s Board of Directors Should Do to Start Out the New Year by Embracing Best Practices

    Four Things Your Nonprofit’s Board of Directors Should Do to Start Out the New Year by Embracing Best Practices

    This article was originally published by the National Council of Nonprofits on January 18, 2019.

    It never fails. As soon as the iconic glittery New Year’s ball makes its descent in Times Square and the calendar turns to January nonprofit boards review their list of goals for the new year and begin to tackle tasks like updating woefully out-of-date bylaws and tightening up conflict of interest policies. Boards look at ways that they can ensure legal requirements are followed by their organization and that their next audit will come back squeaky clean. But there is more to running an ethical, accountable, and transparent nonprofit than just legal and accounting requirements. Boards of directors can set the tone for the organization by conducting regular reviews of core governing and operating policies and procedures.

    In our work at the Standards for Excellence Institute, and through our parent organization, Maryland Nonprofits, we encourage nonprofits to embrace ethical and accountable management and governance in all their efforts. Our blueprint for nonprofit best practices encourages organizations to assess their own operations, governance, and management against our set of best practice standards, the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code is supported by a wide array of educational resources and tools, plus an accreditation and recognition program carried out by partners like state associations of nonprofits as well as consultants working around the nation.

    As the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector states, “Nonprofits depend upon effective leadership to successfully enact their missions… Board members are in a position of trust to ensure that resources are used to carry out the mission of the organization…”

    Four Things Your Board of Directors Can Do to Embrace Ethical, Accountable, And Transparent Values

    1. Review your bylaws:
    • Do the bylaws describe standing committees or positions that no longer exist?
    • Do they address modes of communication that you rarely employ? 
    • Have you moved away from some of the statements in the bylaws in a way that encourages you to re-think the clauses in the bylaws or does the organization need to resume past practices to avoid “mission creep”?
    1. Review the position description for board members and officers:
    • Do the roles and responsibilities adequately describe what is really needed for an individual to succeed in helping to advance your organization’s mission?
    • Are the roles and responsibilities consistent (or in opposition to) the clauses of your organization’s governing documents, such as your bylaws?
    • Do you find that your list of expectations for board members is helpful in the board recruitment, selection, and orientation process? Hopefully, this document is shared with board members BEFORE they accept a nomination to serve on the board.  There is nothing worse than investing a lot of time recruiting a board member only to find out that he/she is unable or unwilling to carry out the expected responsibilities.

    1. Take care in completing your annual conflict of interest statements.

    • Each nonprofit organization should have a board-approved conflict of interest statement that, as the Standards for Excellence code states, “is applicable to board members and staff, as well as volunteers who have significant, independent decision-making authority regarding the resources of the organization.”
    • The annual conflict of interest policy should “identify the types of conduct or transactions that raise conflict of interest concerns, should set forth procedures for disclosure of actual or potential conflicts and should provide for review of individuals transactions by uninvolved members of the board of directors.” (Standards for Excellence code)
    1. ​​​Review the performance of your current board members and board as a whole.
    • Don’t wait until the board presents its slate of new members to assess the strengths and weaknesses of your current board. Undertaking an assessment now can help your nonprofit know what talent and experience should be targeted in your next round of board member recruitment.
    • Are your current board members fulfilling their responsibilities (fiduciary, fundraising, governance, attendance, etc.)?
    • Do your current board members complete an annual or bi-annual self-assessment of their service as a board member and the board’s service as a whole? 2019 would be a great year to start this practice.

    Whether we are “trusting the magic of new beginnings” (Meister Eckhart) or simply taking advantage of a lull in the frenetic pace of nonprofit organizations, the fact remains that many nonprofit boards take the opportunity to embrace improvement at the start of the calendar year.  Perhaps this appetite for stronger ethics and accountability is even more pronounced at this time after a few high-profile nonprofit organizations have found themselves in the midst of serious investigations and sanctioning in recent months.

    The board of directors in any nonprofit serves as a crucial player for demonstrating the values the nonprofit espouses and lives. We hope 2019 offers your board the opportunity to implement best practices and re-committing to doing its best at doing good.

  • Failure to Address Succession Planning by the Markkula Center for Applied Ethics

    Failure to Address Succession Planning by the Markkula Center for Applied Ethics

    A long-tenured executive director is uncertain about how much longer he intends to stay with his organization and has talked with a few members of the staff about the possibility of leaving. He has not spoken to the board or stated a clear intention, and the board is hesitant to address the issue out of respect. How can this board and executive director act ethically? Read this article from the Markkula Center for Applied Ethics, a Replication Partner based in Santa Clara, CA, to find out.  

    •  

  • Lack of Board Engagement: Did this Board act ethically? By the Markkula Center for Applied Ethics

    Lack of Board Engagement: Did this Board act ethically? By the Markkula Center for Applied Ethics

    Disengaged board members fail to meet their ethical obligations to nonprofit organizations. If the executive director believes their nonprofit could raise more funds and serve more people, but the board’s lack of engagement is impacting growth, what options are there? Read this article from the Markkula Center for Applied Ethics, a Replication Partner based in Santa Clara, CA, to find out. 

  • Nonprofit Fraud: Did this Board act ethically? By the Markkula Center for Applied Ethics

    Nonprofit Fraud: Did this Board act ethically? By the Markkula Center for Applied Ethics

    Boards have an ethical duty to understand and fulfill their responsibilities to a nonprofit, including rigorous financial oversight. If a nonprofit loses $900,000 over eight years due to theft by the executive director, was the board acting unethically?  Check out this article from the Markkula Center for Applied Ethics, a Santa Clara, California-based Replication Partner,  to find out.