Nonprofit 411: How to Foster an Effective Board of Directors

By Shannon Crowley, Audit Supervisor, BlumShapiroCrowley, Shannon

In today’s world, nonprofit organizations are highly scrutinized, are subject to higher demands for services and diminishing resources. In order to face these challenges, it is more important than ever that the Board of Directors is effective and provides solid leadership. Executive management is in a position to help ensure the Board is well prepared to lead the organization. Consider these 4 guidelines to foster an effective Board:

1) Expectations and Accountability – Executive management sets the expectations for board members. There should be a written description for each board member, which includes responsibilities, accountability and extent of involvement in other activities within the organization. Clearly communicating expectations will create less uncertainty and angst between the organization and the board members. In addition, since the members will have the same obligations, it will allow the board members to view each other as equals and clearly identify any members that are not meeting expectations. Executive management should consider asking board members to perform an annual self-assessment. This will enable each member to not only evaluate how they are performing against expectations, but also achieve a sense of accomplishments related to their contributions to the organization.

2) Educate – Board members need to be educated on the mission and operation of the organization. A formalized orientation process should be considered for all new board members, including immersion into the organization and review of the financial documents, including benchmarks and other statistics that are important to the organization’s financial health. Not all board members will be financially sound, so it is vital that the executive management provide them with this education.

3) Big-picture – Board member’s time is limited, so it is imperative that executive management ensure that meetings are productive and time is spent effectively. Too much time is spent discussing trivial details that should be handled at a committee or management level. Board members should be thinking about the big-picture. Executive management can help facilitate an effective meeting by having a short and simple agenda. It should aim to keep the Board big-picture focused and link to the strategic goals at hand. Other handouts should be kept to a minimum. Create a board package that is simple and addresses a dozen or so key financial and operating indicators that are most important to the organization and its mission. The Board meeting agenda and package should be sent out to each of the members prior to the meeting. This way the members can review the information and be more prepared and focused coming into the meeting.

4) Tone – Executive management sets the tone. If executive management is not passionate and excited about the organization, how can they expect the Board to feel that way? Positive energy is contagious. Executive management’s passion about the organization and mission should shine throughout the board meetings. Executive management should also appreciate the board members; after all, they are for the most part volunteers. Executive management should recognize and celebrate the contributions of the board members. Finally, executive management should be genuinely open to the board member’s advice. Although not all ideas are appropriate and some should be pushed back, this should be handed with the uttermost respect. Executive management should encourage creative and new ideas from board members.

BlumShapiro is the largest regional accounting, tax and business consulting firm based in New England with offices in Connecticut, Massachusetts and Rhode Island.

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