The Jossey-Bass Handbook of Nonprofit Leadership and Management
Third Edition
David O. Renz, Editor, and Associates
Foreward by Robert D. Herman, Editor Emeritus
Chapter 5: Leadership, Governance, and the Work of the Board
David O. Renz
(The beginning of this chapter is adapted from the author’s chapter on “Governance of Nonprofits” [Renz, 2004b], and has been adapted with permission.)
Governing boards have become the focus of substantial attention and interest in the past decade as more and more people have become aware of the ways that boards can affect nonprofit performance and success. Boards are charged with leading nonprofits in an increasingly dynamic and complex environment, and the challenges of doing so well have intensified interest in nonprofit boards, the work they do, how they are organized, and how they can and should contribute to the success and effectiveness of the organizations they govern.
When we review most of what is known about the field of nonprofit governance, we find our knowledge relies to a surprising degree on conventional wisdom, anecdotes, horror stories, and the impressions and prescriptions of various board consultants and authors. Ostrower and Stone, in their recent survey of formal research literature on nonprofit governance, observe that progress is being made yet “major gaps in our theoretical and empirical knowledge about boards continue to exist” (2006, p. 612). They explain this is partly because there is an incredible degree of heterogeneity in the range of settings in which boards work. It can be very difficult to know just what guidance should apply to any one particular board, given this exceptional diversity. Nonetheless, a core body of knowledge and information informs the design and practice of nonprofit governance and the work of boards, and that is the focus of this chapter.
I discuss nonprofit boards and governance from two perspectives. First, and as a foundation, I discuss governance and the work that typically is the province of a nonprofit board. This section includes basic information about the duties and responsibilities of governing boards and those who serve as members of boards, and describes some of the changes in expectations for their service. Second, I explore some of the key concerns that have been voiced regarding board performance and present a general framework for building board capacity. In presenting this framework, I highlight some of the important findings of recent research on board performance and discuss strategies for enhancing board effectiveness.
Governance, strategy, and the board
Every incorporated nonprofit organization in the United States and in most other nations of the world is legally required to have a formally established governing body. Typically labeled a “board of directors” or “board of trustees,” this governing board is the group of people entrusted with and accountable for the leadership and governance of the nonprofit corporation. It is the board that has the ultimate authority and responsibility for the performance of a nonprofit organization and, even when the organization employs people in executive and staff roles, it is the board that ultimately is accountable to the community, to the state, and to clients and beneficiaries.
As common as nonprofit boards are, they and their work tend to be quite misunderstood—even by those who work with and serve on them! Central to the confusion is the blurring of two key concepts: governance and board. The two are fundamentally different: governance is an organizational function, whereas a board is a structure of the organization that exists (at least theoretically) to govern—to perform the work of governance. When we treat them as the same thing, we plant the seeds of much confusion that bedevils our understanding of boards and board effectiveness.
Governing boards, by definition, exist to govern. They often do more, as discussed in the next section, but at the least they are supposed to govern. For a nonprofit organization, what does this mean? Governance is the process of providing strategic leadership to the organization. It comprises the functions of setting direction, making decisions about policy and strategy, overseeing and monitoring organizational performance, and ensuring overall accountability. Nonprofit governance is a political and organizational process involving multiple functions and engaging multiple stakeholders. There is significant evidence that effective governance is closely related to the success of the nonprofit organization (summarized in Herman and Renz, 2008). Governance is primarily the province of an organization’s governing board, yet often it will not be theirs alone. This is especially true in larger organizations that employ staff, where it is not unusual for the chief executive officer (such as executive director) and sometimes others to play a part in the governance process, as well.
Governance constitutes the most strategic decision process to be implemented by an organization, and its practice is grounded in the assumption that organizations can cause desired results to occur by choosing appropriate courses of action. Therefore, governance involves strategy, that is, the process of selecting among alternative courses of action—using the organization’s mission, outcomes, and goals as the basis for the selection—and implementing these strategies to achieve the desired results and outcomes. In other words, governance is the process of providing direction that begins with making informed organizational choices: choices about why we’re here, what we want to accomplish, how best to achieve those results, the resources we’ll need to do these things and how we will secure them, and how we will know whether we are making a difference.
Effective governance and strategy are integral to the sustainability and long-term effectiveness of a nonprofit operating in today’s complex and competitive world. To succeed, nonprofits (like all organizations) must continuously renew the link between what they do and the needs and interests of the community they serve. The strategy part of governance involves gathering information and using it to inform the key decisions, with the expectation that good strategic choices will result in organizational success. Unlike the for-profit world, where these choices are largely grounded in options for making money for someone, nonprofits essentially always begin with a focus on mission accomplishment—and their choices are about how best to have an impact. They must ensure they are providing the services needed and valued by their clients and constituents, and in ways that are consistent with the organization’s core values and principles. As the organization serves its clients and the community, governance involves making assessments about how well or poorly the organization is doing and then making choices about how to refine its work to be more effective. (The strategy development process is explained in depth in Chapter Nine.)
The work of the board of directors
The board of directors of the typical nonprofit organization has multiple roles and responsibilities. In this section, I describe the most common and fundamental of these, beginning with the legal and fiduciary duties that apply to essentially all governing boards and concluding with a discussion of the core functions of the nonprofit governing board. In the following section, I discuss the roles and responsibilities of the people who serve as individual members of a board.
The legal duties of the board1
The board of directors is the primary group of people entrusted with and accountable for the leadership and governance of the nonprofit corporation. Nonprofit corporations are entities authorized by a state to be formed for the purpose of engaging in some form of public service, and state laws generally require that each such corporation has a governing body that oversees the work and ultimately is legally accountable. Acting as a collective, this governing body has both the authority and the accountability for the work of the organization. It is common for many boards to hire staff to do the actual work of the organization, often with support from volunteers. Nonetheless, it is the governing board that ultimately is accountable for all acts undertaken in the name of the organization (including by staff and volunteers), whether or not those acts are formally approved or implemented by the board itself. This accountability exists regardless of the size or nature of the nonprofit organization and regardless of whether the organization employs staff.
From a legal perspective, a nonprofit board and its members have three fundamental duties:
Duty of care, which is taking the care and exercising the judgment that any reasonable and prudent person would exhibit in the process of making informed decisions, including acting in good faith consistent with what you as a member of the board truly believe is in the best interest of the organization. The law recognizes and accepts that board members may not always be correct in their choices or decisions, but it holds them accountable for being attentive, diligent, and thoughtful in considering and acting on a policy, course of action, or other decision. Active preparation for and participation in board meetings where important decisions are to be made is an integral element of the duty of care.
Duty of loyalty, which calls upon the board and its members to consider and act in good faith to advance the interests of the organization. In other words, board members will not authorize or engage in transactions except those by which the best possible outcomes or terms for the organization can be achieved. This standard constrains a board member from participating in board discussions and decisions when they as an individual have a conflict of interest (that is, their personal interests conflict with organizational interests, or they serve multiple organizations whose interests conflict).
Duty of obedience, which requires obedience to the organization’s mission, bylaws, and policies, as well as honoring the terms and conditions of other standards of appropriate behavior such as laws, rules, and regulations.
Board members are obligated to honor these standards with regard to all decisions and actions of the board, and those who do not may be subject to civil and even criminal sanctions (including, in the United States, sanctions imposed by the federal Internal Revenue Service in cases of inappropriate personal benefit).
During the past decade, there has been a significant increase in the attention paid to the legal responsibilities of nonprofit boards and their members. National, state, and provincial authorities all have placed increased emphasis on the need for nonprofit boards to be accountable for the quality of their governance and oversight of their organizations, and a number of governments have adopted legislation to require improved nonprofit performance and accountability. Many also have provided formal policy “guidance” and direction intended to spur increased self-regulation (see, for example, the U.S. Internal Revenue Service, 2010; The Panel of Nonprofit Sector, 2005). The increasingly competitive and demanding environment of nonprofits, including increased competition between nonprofits and for-profit businesses, is likely to lead to calls for even more legal accountability in the future.
It is worth noting that there are many others who want boards to improve their practice as well, and some of them are more troubled by many boards’ lack of connectedness and accountability to their constituent communities. Nonprofits exist to serve these communities, these advocates assert, so it is time for boards to develop new and more effective ways to engage more fully and effectively with their clients and beneficiaries (see, for example, Freiwirth and Letona, 2006). While there is less direct legal accountability for this aspect of board work, some communities are beginning to explore ways to enhance this type of accountability as well.
The fiduciary responsibility of board
Boards and board members often are reminded that they have a “fiduciary responsibility” to the organization and, ultimately, to the larger community within which they serve. At its core, “fiduciary responsibility” is the responsibility to treat the resources of the organization as a trust, and the responsible board will ensure that these resources are utilized in a reasonable, appropriate, and legally accountable manner. Although the phrase often is used to refer specifically to financial resources, it actually applies to the stewardship of all of the aspects and resources of the organization.
In general, the appropriate exercise of fiduciary responsibility includes:
Adoption of a set of policies to govern the acquisition and use of financial and other resources
Establishment, on a regular basis (usually annual), of a budget that allocates financial resources to the programs and activities that will accomplish the organization’s mission, vision, and goals and outcomes (preferably, in alignment with a strategic plan)
Development and implementation of an ongoing system for monitoring and holding staff and volunteers accountable for their performance with regard to these policies and budgets
Development and implementation of an ongoing system to monitor, assess, and report on the overall fiscal condition and financial performance of the organization
Implementation of an independent external review process (such as an independent audit) on a regular basis (usually annual), to assess the organization’s fiscal condition and health, including the effectiveness of its systems and policies for the protection and appropriate use of financial resources
The core functions of the typical nonprofit board
As already explained, most nonprofit boards do much more than govern. Thus, numerous nonprofit board consultants and authors have created lists of core functions and responsibilities to help boards understand their work. There is some variation among lists, and no one list is applicable to all organizations and boards, yet there are key themes that appear in one form or another on almost all lists.
It is typically the governing board’s responsibility to:
Lead the organization: provide overall leadership and strategic direction (including mission, vision and key goals) for the organization.
Establish policy: be proactive in establishing policies that will guide the organization.
Secure essential resources: make sure that the organization secures the resources that it needs to accomplish its mission, vision, and goals.
Ensure effective resource use: ensure that the organization makes effective use of its resources to accomplish its mission, vision, and goals.
Lead and manage chief executive performance: provide strategic direction, support and advice, and performance feedback to the organization’s chief executive (such as the executive director). (Note: Even in organizations that do not employ staff, the board is still responsible for providing direction and oversight to the person or persons who manage and implement the work of the organization.)
Engage with constituents: actively help the organization develop and sustain an effective ongoing relationship with its key constituents.
Ensure and enable accountability: make certain that the organization has established standards and implemented systems by which to ensure that it is accountable and effective in serving the community it exists to serve.
Ensure board effectiveness: see that the board itself operates at a high level of performance and effectiveness.
Exhibit 5.1. The core functions of the public service governing board
Lead – Lead the organization
Articulate the mission and an inspiring vision for the organization
Determine the organization’s strategic direction and focus, and how the organization fits into the “bigger picture” for the future
Instill and maintain a strategic perspective and focus for the work of the organization (this is governance versus management)
Specify the organization’s long-term (multiyear) goals and outcomes
Determine the core programs and services of the organization
Provide advice and counsel to executive leadership
Seek and nurture opportunities for service and innovation
Establish policy – Establish proactive policy to guide organizational action
Establish policies to guide executive decision making and action and the implementation of organizational programs and operations
Establish key intermediate-term organizational goals (1-3 years)
Approve overall organizational design (structure and core processes)
Ensure that strategic plans and policies guide resource allocation
Secure essential resources – Ensure that the organization secures the resources needed to accomplish its mission, vision, and goals
Enable the organization to secure the resources necessary to implement the programs and services that are central to the achievement of the mission, vision, and goals
Make sure that the resource mix is appropriate to the mission, vision, and long-term goals
Ensure effective resource use – Ensure that the organization makes effective use of resources to accomplish its mission, vision, and goals
Allocate resources to implement the organization’s strategic plans (i.e., budget)
Ensure that effective systems are in place to enable the board and executive leadership to monitor and document that financial and other resources are managed and used effectively to accomplish the organization’s purposes and plans
Make sure that the organization’s systems and policies are adequate to safeguard and guide the use of resources and assets (including appropriate management of risk)
Lead and manage chief executive performance – Ensure effective CEO performance
Recruit, select, hire, and set appropriate compensation for the chief executive
Provide regular performance direction and feedback to the chief executive
Serve as a confidential sounding board and resource advisor
Articulate board and executive roles and role distinctions (avoid micromanagement)
Ensure that there is a clear performance management structure in place that enables appropriate levels of accountability throughout the organization
Engage with constituents – Ensure an effective ongoing relationship between organization and key constituents
Maintain strong relationships with key stakeholders
Facilitate and enhance effective two-way, ongoing communication with key stakeholders
Enhance the external image and credibility of the organization
Make sure that organizational accountability information is regularly and accurately reported to relevant stakeholders
Encourage and support the processes for enhancing inter-organizational and inter-agency communication and coordination
Discern and evaluate external trends and dynamics to assess their implications for the organization, and share this information with the organization
Help constituents link with appropriate parts of the organization (as they have needs and problems to address)
Keep private the information that legally or ethically must remain private
Ensure and enable accountability – Ensure organizational accountability and stewardship
Ensure that appropriate systems exist and function well to monitor, assess, and document organizational performance and outcomes
Ensure that appropriate systems exist and function well to assess, document, and report on organizational compliance with policies, regulations, bylaws, and other mandates and guides for organizational action (including “sunshine laws,” etc.)
Ensure that organizational performance and outcomes information are reported in a timely, accurate, and useful manner to all relevant stakeholders
Monitor use of financial and other resources to ensure that they are managed and used efficiently and effectively to accomplish the organization’s purposes and plans
Determine the performance information to be reported to the board, in what forms and manner, and how often (per above, items 1, 2, and 4)
Ensure that the organization is responsive to constituent requests for information
Clarify to whom the organization is to be accountable and ensure that systematic accountability is maintained with them
Ensure board effectiveness – Ensure a high level of board performance and effectiveness
Attract and retain well-qualified, committed members to serve on the board
Establish and monitor compliance with policies to guide board operations
Clarify board roles and responsibilities in helping the organization accomplish its mission, vision, and long-term goals (including maintenance of distinctions between governance and management roles in the organization)
Prepare and educate members to work and serve effectively (including orientation, member education, ongoing information, and education sessions)
Establish and regularly refine a functional, effective board design (structure and process for board and all subsidiary entities)
Engage in regular self-assessment and development planning (including individual member performance feedback)
The work of board members
Interest in nonprofit boards and how they work has grown substantially in recent years, and more and more people are embracing the opportunity to serve on a board. This is good news. But the trend has a challenging side to it, as well. The average person working with a governing board, executive and board member alike, has limited understanding of the work to be done by a aboard or what is expected of him or her as they work with that board. In spite of all the talk about the importance of effective boards and good governance, we find that the majority of people in the nonprofit sector (including even a significant share of those who have prior board experience) actually have only vague and general notions about the fundamental roles and responsibilities of the board and the work of governance.
The uncertainty and confusion are understandable. We have not done a good job of preparing people for their work on and with boards. This may be partly because every board seems to be a little (or a lot) different from any standard model, and partly because we are so busy that we don’t feel that we can afford to take the time to be sure that we’re all on the same page. We become so busy doing the work that we don’t take the time to make sure that we understand the work! The lack of shared understanding is amplified by our discomfort with our uncertainty. A good share of the time, an executive or board member with questions assumes he or she is the only one who is uncertain—and yet that person is rarely alone in his or her uncertainty.
The legal responsibilities of the individual board member
The legal responsibilities of a board member flow directly from the responsibilities of the board as a whole. Each board member, individually, is accountable for honoring the same three fiduciary duties as is the entire board: to exhibit due care, loyalty, and obedience on behalf of the organization on whose board the member serves. This standard of personal conduct requires active and informed preparation and participation in the conduct of board business, including raising questions and issues that would reasonably be raised by any prudent person. Of course, a board member who does not attend meetings or who attends but does not participate or know what is under consideration does not meet these standards. At best, such members are not helping the organization; at worst they are endangering the organization and the interests of the people it serves. Such members also are at risk of personal liability and “intermediate sanctions” should certain kinds of inappropriate organizational or board behavior occur. (See Chapter Twenty-three for more information on risk management and the liability of board members and other volunteers, and see Chapter Two for general information about nonprofit law.)
All board members are responsible for doing their best to help ensure that the board as a whole is performing its legal responsibilities, and individual board members can be held liable as individuals for inappropriate organizational acts. Among the circumstances under which board members have been help personally liable (for more information, see Herman, 2006) are the following:
When the organization has not paid certain taxes, especially payroll taxes
The board enters into inappropriate arrangements or contracts with a board member, particularly including conflicts of interest
The board has violated employment laws or contracts (a common example: the handling of the termination of an executive director)
The board has failed to take reasonable steps to protect others from harm in a situation they know or should have known was potentially dangerous (for example, in addressing dangerous facilities conditions, or in failing to address inappropriate individual behavior of staff such as harassment or sexual misconduct)
Beyond the legal obligations
Obviously, it is important for every board member to honor his or her legal responsibilities, but the roles and responsibilities of the individual board member of a typical nonprofit board are more extensive than mere legal compliance. Every board should develop its own set of member expectations that addresses the needs and interests of that specific organization and what it needs from its board. However, the following are among the most common of responsibilities or expectations that a typical nonprofit is likely to have of its board members:
Participate actively (for example, attend all meetings of the board, serve on committees or task forces, prepare in advance for meetings and other key board activities, engage in independent and critical thought in all areas of board work, and attend special events and other key organizational activities as requested).
Be knowledgeable and ensure that they understand and act consistently with the mission, vision, and overall work and strategic direction of the organization; the bylaws and policies that guide the work of the board; and the board’s expectations of them as a member of the board.
Do their homework to ensure that they are appropriately informed about issues and matters that will be the subjects of board deliberation, decision making, or monitoring, and important issues that are likely to have an impact on the success of the board and organizations.
Provide active support for the fundraising and other resource development activities of the organization, including making a regular personal financial contribution to the organization (at a significant level, according to the member’s capacity) and assisting the organization in connecting with those people and organizations that may be able to assist in funding and supporting the organization.
Serve as an ambassador and advocate on behalf of the organization, helping support networking and the development of connections with community and other leaders.
Provide encouragement and active support for the work of the staff and volunteers, taking care that board activities do not interfere with staff roles or functions.
Serve with honor and integrity, including to
Help enhance the image and credibility of the organization through their work, taking care that their personal behavior reflects well on the work and reputation of the organization.
Address sensitive matters in confidence and with discretion, exhibiting the best of ethical performance.
Honor and actively support all board decisions, once they have been made, and treat the content of board deliberations with confidence and discretion.
Avoid actual and perceived conflicts of interest, to the greatest degree possible, and exhibit the highest of ethical standards in all personal conduct.
Support and actively contribute to the board’s efforts to work effectively as a team, including taking an active and constructive role in helping the board do its work, embracing the challenges and opportunities of board work with a positive attitude and energy, bringing a sense of perspective and humor to the work of the board, and providing encouragement and support to fellow board members (including taking time to celebrate the successes and accomplishments of the organization, the board and its members).
Characteristics of typical nonprofit boards
As noted earlier in this chapter, nonprofit boards are an exceptionally diverse and heterogeneous lot, so a discussion of “typical” characteristics must be broad and general. Nonprofit boards typically have specific positions (offices) and work units (committees and task forces) that help the board organize and accomplish its work. The typical nonprofit board has twelve to twenty-four members; according to a recent survey of U.S. nonprofits (Ostrower, 2007, p. 25), the average for nonprofit board size in America is thirteen members (median size is eleven). Most board members also serve for specified terms of office (three-year terms are most common), and about two-thirds of all U.S. nonprofits limit consecutive reelection to a maximum of three terms (most common is a limit of two consecutive terms).
Officers
Most nonprofit organizations have multiple officers, and the laws of most states of the United States require certain offices—most commonly, chair (sometimes called president), secretary, and treasurer (sometimes the roles of secretary and treasurer are combined).
Chair
The board chair is the chief voluntary officer of the organization and is responsible for organizing and conducting the meetings of the board. Further, it is the chair’s responsibility to facilitate the board’s work as a team and to ensure that meetings and other board activities are conducted in an effective manner. It is common for the board chair to oversee the performance of the organization’s chief executive on behalf of the board, although some organizations elaborate the process by assigning the chair to lead a process in conjunction with a committee of the board (often the executive committee) or even the full board. Although there is little research to date, recent research (Harrison and Murray, 2007) affirms what many would expect: the effectiveness of the board chair has significant impact on the effectiveness of the board and the satisfaction of its members.
Secretary
The work of a corporate secretary involves ensuring that accurate records are retained for the nonprofit, including copies of all official documents, communications, and correspondence of the organization (including articles of incorporation, bylaws, and legal notices and filings), as well as notices and minutes of all official meetings of the board. The secretary might or might not personally prepare the minutes but is accountable for ensuring that accurate and complete minutes of all official meetings are kept.
Treasurer
The treasurer oversees the processes of financial management and accountability for the organization, helping make sure that all resources are used appropriately and their use is documented. This includes ensuring the preparation and retention of complete and accurate financial reports and records. In small organizations, the treasurer often is involved in the actual financial operations of the organization; in larger organizations he or she maintains general oversight of financial affairs and sees that regular reports are provided to the board, regulators, and other key stakeholders. The treasurer might or might not personally keep financial records and maintain accounts, but he or she is accountable for ensuring that these records are maintained and available to authorities.
Committees and task forces
Boards engage in much of their work as a full group and, ideally, all members work as a team to accomplish the work of the board. Nonetheless, more than 90 percent of U.S. nonprofit boards also have created committees and task forces to help the board to its work (Ostrower, 2007), and these entities are part of the governance system of the organization. For most boards, some of these units are permanent or “standing” structures whereas others accomplish a specific task and then disappear. It is increasingly common for boards to refer to the permanent structures as “committees” and the limited term entities as “task forces” or “ad hoc committees,” although some organizations do use the labels interchangeably. It is common for board committees to be composed entirely of board members, yet an increasingly large number of nonprofits also invite non-board members with unique expertise, knowledge, or interests to serve. Typically, the key standing committees are specified in the organization’s bylaws, which also should explain their purpose and role(s).
The following are among the most common types of standing committees:
Executive committee. This committee is typically composed of the officers, and sometimes also will include committee chairs or selected other board members. It usually has the authority to act on behalf of the board between meetings and to address organizational emergencies. Some executive committees have the authority to act independently, but many are required to have their actions subsequently ratified by the full board.
Nominating committee. This committee has the responsibility for recruiting candidates for board and committee membership and preparing a “slate” of candidates or nominees for consideration and action by the full board; many also nominate officers. It is increasingly common to define this committee’s responsibilities to include a year-round cycle of board development activities, including new member orientation, member self-awareness, board self-assessment and development, and the development of board training programs and retreats. When operating with this enlarged portfolio, such committees often are called board development or governance committees.
Fundraising or development committee. This committee usually is responsible for working with staff and board to organize and implement the organization’s fundraising events and activities, including the solicitation of major gifts and grants.
Finance committee. This committee is responsible for planning, monitoring, and overseeing the organization’s use of its financial resources, including developing a budget to allocate the organization’s funds. This committee will develop for board action the financial policies the organization requires. Unless the organization has a separate audit committee, the finance committee also will oversee and review the organization’s independent audit or financial review.
Personnel committee. This committee usually is responsible for planning, monitoring, and overseeing the organization’s use of its human resources (paid and volunteer). This committee will develop needed personnel policies, including policies guiding performance management and supervision, employee compensation and benefits, and handling of grievances.
Program committee. It is not unusual for nonprofits to have one or more committees to oversee the organization’s system(s) for delivering quality services to clients, and to engage in some form of monitoring and oversight to ensure that these services are provided in a timely and responsible manner. Such committees may handle certain relations with community leaders and interest groups that have key interests in the programs of the organization, as well as planning for program development or refinement to meet future needs.
It is important that committees and task forces only do work that legitimately is the responsibility of the board, and care must be taken to ensure that these structures do not interfere with either the staff operations of the organization or with the oversight that should be provided by the full board. Many boards in older organizations have concluded that they have too many committees, and it has become something of a trend among U.S. nonprofit boards to decrease the number of standing committees and use task forces more frequently to address specific issues of strategic importance as they arise (Taylor, Chait, and Holland, 1996).
Building board capacity to serve
Nonprofit boards are today feeling more pressure than ever to perform well, and these demands to perform more effectively are coming from nearly all quarters. Although each group is demanding something a little different, the federal and state regulatory officials, various taxation authorities (such as the Internal Revenue Service and state departments of revenue), the foundation community, donors, and even clients and other key beneficiaries are calling for boards to be better, stronger, and more effective. Even board members themselves, for the most part, say their boards could be more effective.
The characteristics of the strong nonprofit board
What are the characteristics of the well-developed board—the board that is able to recruit, retain, and mobilize its members to do the essential work of a board of directors? A review of the literature suggests the following key characteristics:
The effective board organizes its work in ways that make judicious (and often creative) use of the limited amount of time that members can commit to the organization.
The effective board is good at matching the work it needs to do with the skills, abilities, and interests of its members, and it invests in preparing these members to do this work.
The effective board understands that, at core, success is grounded in building effective relationships—relationships among the members of the board, relationships between each member and the board as a whole, and relationships between the member and the overall organization. These boards take care to help these relationships develop and grow from the very beginning.
The effective board recognizes that one of the most valuable assets it brings to the nonprofit is its members—their time, talent, and service. It understands that the highest and best use of member time is to provide leadership, strategic direction, and oversight to the agency, and it recognizes the opportunity cost inherent in dribbling away member time by involving them in irrelevant activities that divert their attention form the most important work they could do.
The effective board creates an infrastructure of support that helps members accomplish their work efficiently. Member time and talent are successfully leveraged because the support, systems, and technology exist to enable their work. Two kinds of infrastructure are provided:
Infrastructure that supports members’ work together, such as communications technologies and information systems
Systems to provide the information that the board needs to accomplish its work
The effective board is thoughtful about and takes the time to reflect on what it does well and what could be improved—and it uses this information to improve both board performance and the quality of each member’s experience as a board member. The successful board understands that board effectiveness is a journey and a process, not a specific state of being. It is thoughtful about growing its capacity to perform, and focuses on the high-leverage targets of opportunity for growing board capacity.
Competencies of effective boards
What are the key elements of nonprofit board effectiveness? Why do some boards perform well when many others do not? One of the foundational research initiatives to examine these questions is implemented by Richard Chait and colleagues in the mid-1990s. They examined the differences between boards that were reported to be more versus less effective and identified six core competencies that were associated with the best-performing of these boards (Taylor, Chait, and Holland, 1996). Even the most effective of these boards varied in the degree to which they had mastered each of the six, but there were clear relationships between the degree to which each board exhibited each of the competencies and their overall performance as a board. The six key dimensions of board competence are the following (Holland and Jackson, 1998, pp. 122-123):
Contextual competence: the board understands and takes into account the culture, values, mission, and norms of the organization it governs.
Educational competence: the board takes the necessary steps to ensure that members are well informed about the organization, the professions working there, and the board’s own roles, responsibilities, and performance.
Interpersonal competence: the board nurtures the development of its members as a group, attends to the board’s collective welfare, and fosters a sense of cohesiveness and teamwork.
Analytical competence: the board recognizes complexities and subtleties in the issues it faces, and it draws upon multiple perspectives to dissect complex problems and to synthesize appropriate responses.
Political competence: the board accepts that one of its primary responsibilities is to develop and maintain healthy two-way communications and positive relationships with key constituencies.
Strategic competence: the board helps envision and shape institutional direction and ensures a strategic approach to the organization’s future.
Helping boards meet the challenge
It is time to recognize that we’re really not doing enough to help governing boards and their members to be successful as they serve in these special roles of public trust. Relatively few boards engage in a regular program of board development (Ostrower, 2007), yet there are many reasons to believe that nonprofit boards that engage in a regular ongoing systematic approach to board development are more effective and their members are happier and more productive on behalf of the organization. A number of recent studies have documented that board development activities can have an impact on board member performance and overall board effectiveness. For example, one study (Brown, 2007) reports that effective member recruitment, selection, and orientation practices enhance board member performance; another study suggests that a well-designed program of board development can make a difference in the performance of a nonprofit board and, ultimately, in the financial performance of the organization (Holland and Jackson, 1998). Similarly, Cornforth (2001) reports a direct relationship between the effectiveness of nonprofit boards and (a) the knowledge and skills of board members, (b) the clarity of their board member roles and responsibilities, and (c) board members and executives coming together on a periodic basis to assess how well they are working together. It is reasonable to conclude that activities that improve board members’ knowledge and skills and clarify their roles and responsibilities will therefore enhance board effectiveness as well.
One of the major impediments that keeps the typical board from engaging in ongoing board development is the sense (or worry) that it will involve too much effort and time, and that it will be a distraction from “our real work.” An effective board development approach will not divert attention from important matters. To the contrary, it will focus attention in a more efficient way on one of the core responsibilities of every nonprofit board—the responsibility to be a good steward of its members’ time and talent and to ensure its own effectiveness. In other words, effective boards engage in a systematic ongoing process of development because they understand that this will make a difference in the value they deliver for the organization, and because it makes a difference to those who serve on the board. It’s no fun to serve on a dysfunctional board!
Being systematic does not require a board to be exceptionally elaborate about its approach, nor to consume hundreds of hours of member time each year. Indeed, one of the greatest challenges confronting most boards today is that they barely can find the time to get enough members together to handle the regular required business, much less the time for what some might consider “add on” activities. Thus, efficiency in the development process is important. However, the irony is that those boards that take a minimalist approach to development generally undercut their capacity to bring members together for the minimal agenda of regular business, because service on their board is so boring and unrewarding that their members attend meetings (if they do at all) because of a sense of obligation rather than because they feel their time and talents are being used well. Efforts to minimize development time actually can backfire when it comes to member commitment as well as performance!
Eight core principles for growing a board
Board leaders should recognize eight fundamental principles as they explore the ways they might wish to build their board’s capacity.
Principle 1. Nonprofit organizations cannot be successful for the long term unless they have governing boards that are effective. There is a high correlation between nonprofit organizational effectiveness and board effectiveness (Herman and Renz, 2008; Brown, 2007). Therefore, a board’s effectiveness is important to the organization’s performance and service to the community.
Principle 2. Board design is about the future, and all board development needs to be done with the future in mind—both the conditions that the organization will face in the future and the organization’s needs for the future to address those conditions. Hockey star Wayne Gretzky is reputed to have said that his success as a hockey player was due to the fact that he always made it a point to “skate to where the puck was going to be!” Boards should take this point to heart! We are preparing to serve in the future—do we know “where it will be?”
Principle 3. There is no one single design or model for board development that automatically will be best for all organizations. The board is part of two larger systems—the organization and the community environment—and so its design and development need to be aligned with the needs and characteristics of these environs. Boards serve different functions and roles at different points in the life and development of their organizations, and these differences must be taken into account when determining the most useful board development process. Further, the research to date on board development initiatives suggests no one model seems to be better than another. In fact, there is evidence that what makes a difference in board development is the organized use of any thoughtful and well-developed systematic approach to development (Nobbie and Brudney, 2003; Brudney and Murray, 1998).
Principle 4. Focus on principles, not “best practices.” The notion that there are practices that are universally best is flawed—at best, there are “promising practices” that are worthy of consideration, but one can never claim that a given practice will be “best” until the organization’s issues, needs, and circumstances are taken into account (Herman and Renz, 2008; 2004). There are many good resources that offer examples of useful practices (for example, checklists, training programs, board development tools—consult the Internet resource site of this handbook for further information), but until the organization knows what it needs, these are merely resources.
Principle 5. Leadership is critical and pivotal to board success and, therefore, to board development. Every change process, including every development process, needs to have at least one champion who will make it their goal to help advance the development process (Kotter, 1996). However, serving as “champion” is not the only leadership role in any board; responsibility for leadership must be shared among all members of a team, as they provide both mutual support and encourage mutual accountability for the board’s work.
Principle 6. Structures never guarantee performance in organizations (or communities), although they can get in the way and screw things up. Performance derives from the behavior of people, and it is not possible to guarantee performance through the creation of structures, so retain only as many board structures (for example, offices, committees, terms, reporting relationships) as are essential. Likewise, take care to nurture the “soft” or process aspects of the board’s work, because the processes are the dynamic vehicles for bringing structures to life (see the next principle).
Principle 7. Effective boards, by definition, are teams. Teams are groups of people who are working together to accomplish a shared goal or outcome (Katzenbach and Smith, 2003). If this definition does not describe a governing board, then that board is not living up to its legal and ethical obligations as a board! The shared outcome always is defined as the success of the organization. Thus, team building is always an important dimension of any legitimate approach to board development.
Principle 8. Every effective development process must “meet” the organization or team “where they are,” and each organization and board must build from the level of development and capacity that exists at the time they begin the development process. Regardless of what you wish, the board is currently at some level of development that must be recognized for what it is—the starting point for growing the board. So the process starts at this point—start here, start now, and initiate a process that will be manageable in scale and scope. Further, it must be recognized that there are going to be limits to how much can be done or what a board can accomplish in a given time period. It makes no sense to assume or wish that a board is better positioned than it is (nor worse than its situation is); it is essential to build from whatever stage of development exists. Nowhere is this going to be more true than in working with an all-volunteer group of people from the community, people who always will need to balance their board work with the other demands of life, family, and work. Finally, do not wait until the “perfect time” to start a development process—conditions never will be close to perfect for any typical board, so start now and begin with whatever is feasible to begin to help your board develop.
The board builder’s challenge: Taking the long-term, developmental perspective
Strong and effective boards do not happen by accident, and they do not develop overnight. They also do not remain effective indefinitely. Successful nonprofits invest time, energy, and even money in building and sustaining strong boards. This section introduces a board development framework, discusses the process by which boards develop and grow, and explores the ways that the concepts of the framework might be used to guide board development activity. Effective boards capitalize on all facets of a board’s development process, taking a long-term developmental or continuous-improvement approach to growing their boards. Effective boards grow and develop (intentionally or not) through an ongoing cycle of eight relatively sequential overlapping elements. Each element adds unique value to the capacity and impact of the board, each poses its own design and development challenges, and each has a set of developmental activities that enhance its contribution to board success. We discuss how the cycle begins for new organizations with new boards, but our emphasis is on the ways that existing boards can use this development cycle approach to build their capacity and impact.
It is most useful for nonprofit leaders who are interested in building their boards’ capacity to approach their capacity-building work from the perspective of a larger and longer-term integrated board development process—a process that reflects a complete board development cycle. Even though many board leaders cannot afford to address all facets of the board development process at one time, their ability to make a substantive long-term difference will be considerably enhanced if they recognize that each of the various facets exists and that, collectively, they affect a board’s capacity to succeed. Strong and effective boards grow to be effective because their leaders have chosen to invest in their capacity.
Understanding and implementing a developmental cycle approach to build your board
Effective boards engage in a thoughtful ongoing process of board development because they understand that this makes a difference in the value and impact that their board delivers for the organization, and because they understand that it makes a difference to those who serve on the board. And a truly useful approach recognizes that all of the elements of board development interact in a systematic way. It may make sense for a board to tackle only one or two of these elements at any given time, yet it is essential to be systematic about the process by which it does so. To fail to take the larger perspective will be both inefficient and, ultimately, without impact.
When we observe nonprofit boards and think about how they emerge and develop, we see a relatively predictable process that includes specific phases and key elements of development. Although these elements of development do not occur in a distinct linear sequence, we do observe that there is a general flow that is common to most boards, and this flow of development becomes a recurring cycle that effective boards recognize and use to their advantage. This process is often implemented rather intuitively, since few boards give much systematic thought to their growth and development. However, when understood and used in a systematic manner, it becomes possible for boards to grow and develop in more efficient and effective ways.
There are eight elements that every board addresses in its development. The effective board will develop its capacity to service by making sure that it
Organizes itself to efficiently and effectively accomplish the work it must do for the organization
Attracts to the board table a group of people who will enable it to do this work well
Prepares these people to effectively serve in their roles as members
Helps these members work together as a team to accomplish their work
Focuses members’ attention on the right issues and questions
Engages and motivates its members to retain their involvement and service
Employs members’ time well, in meetings and other activities
Evaluates and develops its own performance, as a group, and uses this information to refine its design and practices to improve its effectiveness for the future
When a board first organizes to govern and lead an organization, these tend to be the stages that it will go through as it creates itself. Of course, in real organizational life, the elements tend to overlap and interact in ways that cause them to influence each other. Further, in young and relatively undeveloped boards, many of these elements tend to be executed informally and even unknowingly—yet each of these elements is in fact implemented in some way by every board that actually grows to operate as a board. Figure 5.1 illustrates the general sequence and flow of these eight elements.
Figure 5.1. The board development cycle
The key elements of the board development cycle
Each of the eight elements of the board development cycle contributes uniquely to the capacity of a board. Each alone offers specific utility for building board capacity, and the activities associated with each may be implanted alone. However, the extended value of the board development cycle framework lies in the recognition that the value that each element offers is substantially enhanced by linking it to and growing it from other elements in the cycle. Some of these elements are most usefully implemented in a sequence (for example, recruiting and selecting members usefully precedes building member capacity). However, it also is likely that many of these elements should overlap in their implementation (for example, “ensuring strategic focus” relates to each of the other elements). Therefore, it is essential to recognize that the eight elements of board development are neither mutually exclusive nor do they occur in a purely sequential, lockstep way.
Working from the perspective of a new start-up organization, I now provide a brief overview of the eight elements of the board development cycle. Additional information about each of the eight is available at the Internet resource site for this book. Included on the site are ideas and suggestions for various development options and activities that might be considered useful by a board working to address each element.
Element A: Define the work, design the board
The effective board is designed to effectively accomplish the work that it will need to do. Board organization comprises multiple elements, including structures (such as committees, task forces, offices) and processes (such as leading, meeting, making decisions, monitoring, communicating). It will include clear delineation of the roles that the board will play in the leadership, governance, and management of the organization, and, for the organization with paid staff (paid or volunteer), this definition will include explicit distinctions regarding the roles to be served by the board and by the executive or other staff. The complex and sensitive topic of the board-executive relationship is very important but, since it is addressed extensively in Chapter Six, I will not discuss it in any depth here.
The wise board organizes from the perspective of the work that it is to accomplish and, in particular, the work that it needs to do during the organization’s next stage of development. Until the board knows what is needed from it, it cannot determine what it should do or how to organize to do it. The contributions that must be made by the board of a small start-up organization are going to be relatively different from the contributions of the board of a mature organization. The work is going to be different. And some board designs match some stages of organization development better than do others.
Thus the focus of Element A is this: the board of directors of a nonprofit organization should design itself based on the needs of the organization and the work that the board will need to do.
Element B: Recruit and select members
Recruiting and selecting members is one of the most commonly practiced elements of board development. Every board must find people to serve, and every board somehow engages in activities that will make this happen. But the key issue is whether the board is thoughtful and systematic about its member recruitment. To echo the findings that business author Jim Collins (2005) has described in his recent work, an essential element of organizational success is to ensure that you have “the right people on the bus.” Far too many boards haphazardly pursue the wrong candidates for the wrong reasons, place them on the board, and then become terribly frustrated when things go poorly. A large proportion of board performance problems can be traced directly back to an ineffective or counterproductive member recruitment and selection process. Ignore this element at your peril!
The effective nonprofit board will engage in a thoughtful process that builds on the insights it gained during its work on Element A (Define the Work, Design the Board). From its understanding of the work it needs to do for the organization, it will then determine its next-generation needs (such as knowledge, skills, abilities, and other characteristics), evaluate its current membership from the perspective of these needs, and then engage in a systematic process of seeking, locating, and recruiting the people who will meet next-generation of the board. It will take care to find the right matches among its needs and the needs and interests of prospective members, including taking care to ensure that its membership is appropriately diverse and reflective of the community the organization exists to serve. Recent research has documented that effective recruitment and selection practice is very significant to board effectiveness (see, for example, Brown, 2007; Cornforth, 2001). None of this is to suggest that this element must be implemented in a drawn-out and bureaucratic way: it is possible to be proactive and systematic without getting bogged down in an excessive process.
Element C: Prepare members to serve
Effective boards recruit people to serve as members because they bring knowledge, skill, and an array of talents and assets that the board envisions to be important to its future success. But it is not enough to simply bring the right people to the board; the effective board will help its members put these talents to work in ways that are most useful for both the organization and the member. This type of preparation often begins with helping the new member understand the nature and scope of his or her role as he or she becomes an active member of the board, and an increasing number of boards are beginning to offer some kind of useful member-orientation process for their new members. In fact, this member preparation usually begins at the recruitment and selection stage with an explicit description of the roles and expectations that the board has for its members (for example, requirements for meeting attendance or whether members work on fundraising).
This is a good start, but the effective board will provide much more in the way of preparation and support for its members. Here, too, recent research confirms that new member orientation and ongoing education activities for all members are positively related to effective board performance (see Brown, 2007; Holland and Jackson, 1998). Such development helps members better understand their work, the work of the organization, the challenges that the organization and board believe will be most important to address as they proceed with their work, and what they envision will be the board’s role in helping to address these issues. Further, a strong board will provide regular ongoing support to all of its members to help them serve effectively, not only those who are new. Unless nothing is changing in either the organization or its operating environment, member knowledge and understanding will need to grow and develop as the organization’s circumstances evolve. This dimension of support for members is not only important from a board perspective; many board members value their time on a board because they gained new knowledge or skills or perspectives through their board service. This preparation can even be a motivator as well as a support for the content of the board’s work.
Element D: Build the board as a team
Preparing the individual board members to play their roles is important but not enough when it comes to nonprofit board service. Much of the power of the effective board comes from the synergy of the individuals coming together to do things that they could not do as well by themselves. When individual board members come together, they are a group. Yet board work is inherently teamwork. As explained earlier, the board’s authority and responsibility, legally and ethically, derives from its work as a collective body. The thoughts and decisions of specific individuals, not matter how bright or relevant, cannot be represented as the work of the board unless and until the board collectively adopts them as its own.
In other words, a board must develop to the level of working as a team in order to serve effectively. Taylor et al. (1996) report that leading-edge boards are focusing directly on building their capacity for teamwork—in their words, these boards are “focusing on the constellation, not the stars!” Some debate whether a board is or needs to be a team—yet it is entirely clear (as a matter of definition) that a board cannot truly serve as a board unless its members come together to serve as a team. If there is no shared purpose the board members are working together to accomplish, they cannot possibly be serving effectively as a board. If nothing else, the duty of loyalty compels it! But of course the typical board member usually joins a board for just this purpose—they join to work with others to help see that the organization progresses in its efforts to accomplish its mission and vision.
Of course, it is one thing to asset that a board is or should be working as a team, it is another to actually achieve this. Thus, a critical yet often overlooked element of board effectiveness is the explicit attention to building the capacity of the board’s members to work together effectively, to work as a team. This is the core of the work of this element of board development. Ironically, many board members and leaders know much about teams, how effective teams sustain their success, and how to help teams enhance their performance—they’ve had formal team development training provided by their employers! And yet it is quite unusual to find a board that is overtly working to tap the power of the wide-ranging literature on team development and performance to enhance board effectiveness.
Element E: Create and sustain a strategic focus
Boards are “all over the map” when it comes to their work. Some operate exclusively at the policy governance and leadership level of work, some serve in both governing and management roles, and still others serve all roles in the organization—as governor, manager, and as operations staff. But the one level at which all boards must work is the strategic level, the work of governance and leadership. And one of the greatest challenges many boards face is that of sustaining their focus at the strategic level. For understandable but problematic reasons, boards much too often become so involved in the details that they lose all sense of their unique responsibility to make strategic choices. Indeed, in organizations with staff, this often becomes a critical source of tension between the board and the organization’s top levels of executive management; board members become heavily involved in management or operations and become resented for their duplication of or interference with the work of the rest of the organization.
This is one board development element that intertwines with all other elements of the board development cycle. There are aspects of creating and sustaining a strategic focus that must be integrated with each of the other phases. For example, the issue of strategic focus and the board’s role obviously is central to the question of board design. But the challenge of strategic focus is equally relevant when we implement that design through recruiting members to serve on the board. If a board does not ensure that the members it recruits are able to work with an appropriately strategic focus, then it is doomed to fighting an uphill battle for its entire tenure.
There are multiple ways that boards and their leaders can help ensure that the board works with and provides the strategic focus that the organization needs. Many of these ideas are discussed on the Handbook Internet resource site.
Element F: Implementation: Accomplish the board’s work
There are certain aspects of board development that are likely to be most effectively accomplished as the board and its members actually engage in the process of implementation; that is, doing the work planned and organized during the earlier stages of board development. Key among them is the set of issues around engaging and motivating members to play their roles—the entire process of handling board members as a special type of volunteer. We know quite a lot about volunteer management and what it takes to engage and motivate volunteers yet, similar to our lack of utilization of the team development literature, we find that most boards are not adequately attentive to matters of engaging the board member as volunteer. (The guidance on volunteer management provided in Chapter Twenty-six is especially relevant to this point.)
Element G: Conduct effective meetings
The crucible within which boards do much of their most critical and essential work is the meeting—the time during which board members come together to organize and begin to implement their work on behalf of the organization. Too long, too short, too disorganized, too narrow, too unfocused—the complaints and concerns are multiple and frequent. Meetings are among the most disliked elements of board service for many members, yet the typical board leader spends surprisingly little time organizing and conducting meetings to ensure that they are efficient and effective venues for board work. There are boards that have developed strategies to use meetings to full advantage to conduct business and to do so in ways that are motivating and energizing for all who participate. These meetings capitalize on the diverse and unique talents at the table, and they create a productive environment that results in board accomplishment. These meetings are used as tools to advocate board performance, and they are effectively organized and conducted by chairs who have mastered the art of the effective meeting.
As with topics of team development and volunteer management, there is a practical body of literature that exists to help board leaders understand how to organize and conduct meetings effectively. And as with the topic of team development, board leaders as a group have tended to ignore the practical advice that this literature offers for using the board meeting effectively.
Element H: Assess and enhance board and member accountability
Accountability is an increasingly critical issue in all corners of the nonprofit world, and it is an issue that boards must address at multiple levels. New guidelines and expectations are being proposed and sometimes even mandated by a myriad of actors, including state and federal regulators, watchdog agencies, funders, and even constituent advocacy groups. Growing pressures are developing across the sector for enhanced “self-regulation.” But the effective board is not reacting to these external calls for accountability; it is taking the lead. Relatively few nonprofit boards today engage in any regular systematic process by which to assess their performance and impact, yet a growing number are beginning to recognize both the imperative and potential benefits of doing so.
Effective boards set goals for their own performance, both long and short term, and they implement processes by which to assess their accomplishment and evaluate how they could be more successful. Some boards have initiated self-assessment processes to gather information to ascertain whether board members meet the expectations that they set (such as attendance, personal giving). Some board members are uncomfortable with such activities, but a growing number support board self-assessment and consider such efforts appropriate and beneficial. These boards are proactively developing their own systems and practices for gathering performance information at multiple levels—about organization performance, board performance, and even about the performance of individual board members. It is essential to point out, however, that the focus of these systems is not merely on gathering performance information with a “report card” mentality, it is about using this information as the basis for refining and redesigning operations to continuously improve nonprofit and board effectiveness. Several useful tools exist to help boards engage in self-assessment initiatives (for example, see the Holland and Jackson [1998] Board Self-Assessment Questionnaire that is based on the six competencies discussed earlier in this chapter, or the BoardSource self-assessment tool based on Ingram’s ten core responsibilities of nonprofit boards [Ingram, 1996]).
Regardless of approach, effective boards take time on a regular basis to reflect on what is working well and what might be improved, and they use this information to help inform how they might refine their design and practices to be of most value to the organization and to the board’s own members. And this discussion is not couched in terms of “what’s bad” or (even worse) “who’s to blame?” It is couched as a learning discussion that focuses on two key themes: (1) What does our organization need of us, in our next generation of work as a board, to uniquely add value to the accomplishment of the organization’s mission? and (2) How might we refine the way we are organized and do our work to make the most effective use of the resources that we, as a board, have at our disposal? As the board considers its findings from the assessment process, the next step is to use these findings to refine the board’s design for its next generation of work—which is the focus of Element A (Define the Work, Design the Board).
Where to start
A nonprofit organization might begin the development cycle with any of the elements, although there are two most likely places at which a board will enter the cycle. For the board of a new organization that is just beginning to organize it governing board, the organization usually will begin (knowingly or not) with Element A: “Define the Work, Design the Board.” Those engaged in creating the board are going to engage in some form of design, and their design will be based on some sense of what the board’s work needs to be. They may be analytical and thoughtful about the work to be done and the design that best advances it, or they may simply imitate some other board design (too many boards simply copy their bylaws from those of another organization without giving any thought to whether those bylaws will be suited to the work their board needs to do). But the fact is that some kind of design is adopted when an organization officially starts its existence.
For the board of the nonprofit that has been in operation for some time, it would be typical for the organization to enter the cycle at Element H: the “Assess and Enhance Board and Member Accountability” phase. This is the phase during which the organization takes stock of its situation, assesses how well its design and actual performance meet the needs and expectations of the organization, and considers what this means for its next generation of service. It is during this phase that the organization determines whether changes are likely to be needed and, if so, generates information that will inform the next phase of work.
Effective nonprofit agencies invest time, energy, and money in building and sustaining their effectiveness. This section of the chapter has explained how boards may be developed and sustained through the use of a board development cycle comprising eight relatively sequential overlapping elements. Each element adds unique value to the success of the board, each poses its own design and development challenges, and each contributes in its own way to board success.
Conclusion
Governance is a central and essential dimension in the leadership of nonprofit organizations, and the boards of directors that engage in the work of governance are central to the success of the organizations they serve. This chapter provides a basic overview of the nature and scope of a typical nonprofit organization’s governance processes, including the basic ways that boards of directors typically provide leadership and direction to their organizations, and explains how these practices affect the success of the organization. There is no question that when knowledgeable and motivated volunteers take the time to serve on community and other nonprofit boards, we all benefit. Likewise, serving as a member of a nonprofit organization’s board of directors can be one of the most influential and enjoyable roles that any volunteer can play, and the rewards of effective service accrue to both the volunteer and their community. Such service is essential to the future of our civil society.
Note
As with any general discussion of legal matters, we must present an important warning and disclaimer. This chapter is intended only to offer general information and its contents do not constitute legal advice. Boards and members with specific legal questions and concerns should consult legal counsel and the relevant regulatory authorities for definitive information and answers. Please also recognize that this chapter focuses largely on nonprofit organizations in the United States. Laws and legal expectations vary from state to state, even though a large number of states in the United States have adopted nonprofit corporation laws that are based on the same model statute, and nonprofit laws vary even more substantially from nation to nation. It makes a significant difference where the organization was founded and incorporated, and where it operates its programs and services. To assist readers, reference and resource materials and Internet links are provided at the end of this chapter.
References
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