Tuesday, September 3, 2013

Debunking Seven Misconceptions About Boards

I hear a lot of questions about how best to structure nonprofit boards, along with worries about how to do it the "right" way. Here are seven common misconceptions about boards - and why they are incorrect:

There is one and only one correct model for nonprofit governance.
Fact: One model does not fit all - what your organization needs to further its mission is dependent on your organizational culture, its size and budget, and how long you've been around. And the model you need may change over time, especially in regard to relative responsibilities of board versus staff.

There is one best (and legal) size for a board of directors.
Fact: Actually, California law requires only one director plus two officers (president, secretary, treasurer). This would make you legal but not very functional. Board size typically ranges from 5 to 15; research shows that small boards think they should be bigger, and large boards think they should be smaller. Your board should fit comfortably in your meeting room, be big enough to get work done effectively, and small enough that the group can work cooperatively.

All boards should have numerous standing committees that meet monthly.
Fact: In my experience, only two permanent committees are essential: a Finance Committee charged with ongoing financial oversight and a Governance Committee responsible for the health and functioning of the board. For everything else, consider using ad hoc groups. Your board members and volunteers will feel much more motivated signing up for projects with defined goals and deadlines, rather than for a standing committee with a vague purpose and no end in sight.

A good strategy is to have lots of wealthy people on your board.
Fact: A far better strategy is to have people on your board who are committed to your organization, understand their responsibilities as board members, readily volunteer their time and skills, and not only make substantial gifts (whether that be $50 or $10,000) but also ask their friends to join them in supporting your work.

Another good strategy is to stack your board with folks who have professional expertise you can get for free.
Fact: Often, professional people have valuable skills but very little time. Consider instead asking them to participate on an ad hoc committee, or to be available to provide support via email or phone when you need it.

If things are going well, there's no need for the board to do an Executive Director performance review.
Fact: An annual review can be one of the very best tools to keep your nonprofit in running order, as well as to promote a continuing positive relationship between board and staff. Plus your board has a legal obligation to provide prudent management, which includes oversight of the Executive Director's work. Every nonprofit should schedule an annual performance review on the board calendar, and stick to it.

All boards are dysfunctional.
Fact: Boards are made up of imperfect human beings; sometimes they work well and sometimes they don't. But for every dysfunctional board out there, you'll find many more that are working successfully to provide essential community services.

So stop worrying; instead, be thoughtful, flexible and creative. Assess your board periodically re what functions and what doesn't, and establish a governance structure that truly works for your organization.

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