Effective nonprofit boards are the key to effective nonprofit organizations. Nonprofit boards provide oversight to the organization and its Executive Director, and guide the organization towards carrying out its mission. Many board members, however, are unaware of their basic responsibilities making it difficult for them to fully participate.
According to the 2008 report, 60% of nonprofits plan to expand their services, but have been unable to access state and federal funding or meet fundraising goals. An unfortunate result of financial challenges–organizations have more difficulty recruiting board members.
A recent article by local blogger Mike Martin highlights the challenge of managing the Executive Director, stating the “rubber stamping” is the number one problem in local nonprofits.
Effective oversight of the Executive Director, after fiscal and legal oversight, is one of the greatest responsibilities of the nonprofit board. It is little wonder that managing the Executive Director is a challenge to most boards–less than half of boards have human resource expertise as part of their membership (BoardSource, Nonprofit Board Index 2007).
Many boards that we encounter are operating illegally. Good intentions, and advice from well-meaning friends can easily lead a nonprofit board down the road to stagnation, bad practices, and steering their organization towards ineffectiveness. Board members have three legal duties that, if not adhered to, can result in liability: care, loyalty, and obedience.
The Antidote to Board Room Ills
- Establish a recruitment process that ensures diversity
- Establish a culture of collaboration
- Effective meetings and decision making processes
- Establish guidelines for board structure and operation that are consistently followed
- Routine assessment and evaluation of board functioning
- Invest in board development and continuing education for board members
Board members must be aware of the activities of an organization, ensure that the mission is carried out, and steward its resources. They must also avoid conflicts of interest, and avoid even the appearance of excess benefit to any member. And, they must ensure that the organization is meeting all its legal requirements; failure to carry out these basic duties results in personal liability of board members and can lead to hefty fines and jail time.
The key to developing a great organization, is cultivating an excellent board. Board members become disengaged from board participation not from lack of caring, but because they lack clarity about their role and the tools and resources to carry out that role. Nonprofit organizations are the interface between our community and those most in need. It is our [the community’s] responsibility to ensure that nonprofits operate efficiently and with integrity.
Effective board training is an integral part of ensuring that nonprofits, and their executive directors, receive the oversight that they need and deserve. Boards of directors must be willing to invest time, and money, into becoming a high performing board, ultimately ensuring a high performing organization that effectively carries out its mission.
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