Building an Exceptional Board of Directors

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Building an Exceptional Board of Directors

• Continuing Studies at University of Wisconsin -
  Madison

Presented by Frank Martinelli The Center for
Public Skills Training
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Board Development CORE ACTIVITIES

• CONTINUOUS
• Team Involvement
• Education and Learning

Board Assessment (or Reassessment) Benchmarking
Board Development Action Planning
Board Development Plan Implementation
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Board Governance Fundamental Assumptions

• Distinction between governance and management.
• Ends and means distinction.
• Clarity and agreement about who does what.

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Leadership for Board Development

• Critical role of . . .
• Full Board.
• Board Development Committee.
• Board President and Executive Director.

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Board Development As A Leadership Development
Process
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A Leadership Development Process

• Nominations and recruitment -- the process of
  identifying the right individuals to meet the
  needs of the board helping them understand their
  roles and responsibilities, and convincing them
  to become part of the board.
• Orientation -- the steps taken to give new board
  directors the information they need to carry out
  their roles and responsibilities effectively.
• Training -- the regular, ongoing efforts to build
  new skills and knowledge among the existing board
  directors to enhance performance.

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A Leadership Development Process

• Evaluation -- the annual task of evaluating
  individual board director performance as well as
  the effectiveness of the board as a whole.
• Recognition -- the ongoing process of recognizing
  the work and accomplishments of board directors
  to the work of the board and to the organization.

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Profile of An Effective Board

• Effectiveness in terms of individual board leader
  development (previous slides).
• Effectiveness in terms of qualities or
  characteristics.
• Effectiveness in terms of collective board
  performance.

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Profile of Effective Nonprofit Board Leadership

• Visionary and future-focused.
• Entrepreneurial spirit.
• Risk-takers.
• Effective communicators.
• Systems thinkers.
• Community connected.
• Diverse.

Source The Center for Public Skills Training
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Board Responsibilities

• Set the mission and strategic vision.
• Select the executive.
• Support the executive and review performance.
• Ensure effective organizational planning.
• Ensure adequate resources.

Source BoardSource
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Board Responsibilities

• Ensure stewardship of resources.
• Monitor impact of organizations programs and
  services.
• Enhance the organizations image.
• Assess its own performance.
• Support public policy and advocacy efforts.

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The Dynamic Board

• McKinsey Company

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The Boards Core Responsibilities

• Shape mission and strategic direction.
• Ensure leadership and resources.
• Monitor and improve performance.

Source McKinsey Company
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Shape Mission And Strategic Direction

• Clarify mission and vision.
• Participate in and approve strategic and policy
  decisions.

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Ensure Leadership and Resources

• Select, evaluate, and develop CEO.
• Ensure adequate financial resources.
• Provide expertise and access for organizational
  needs.
• Build reputation of the nonprofit.

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Monitor and Improve Performance

• Oversee financial and risk management.
• Monitor organizational performance and ensure
  accountability.
• Improve board performance.

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Key Environmental Factors Impacting Focus of the
Board

• Life stage of an organization.
• Skills of CEO and staff.
• Stability and adequacy of income.
• Changes in underlying social issue.
• Changes in competitive or philanthropic
  landscape.

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Board Effectiveness Enablers

• Careful decisions on board size and structure
• Actively managed board composition
• Inspired board and committee leadership
• Simple administrative practices and processes
  made routine

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Twelve Principles of Governance that Power
Exceptional Boards

• BoardSource

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The Difference Between Responsible Boards And
Exceptional Boards
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Responsible Boards

• Capable and dutiful in carrying out its
  responsibilities.
• Understands its fiduciary obligations.
• Approves strategic plans and budgets.
• Regularly reviews financial statements.
• Evaluates the chief executive annually.
• Participates in fundraising.

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Exceptional Boards

• Operates on a higher level -- more and
  different.
• Members give more and differently
• Time spent more wisely, skills and social
  networks better leveraged, and treasure more
  strategically deployed.
• Measure organizational impact and evaluate their
  own performance, discuss and debate issues, and
  open doors and make connections.

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Governance as Leadership

• Richard Chait, William Ryan
• Barbara Taylor

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Three Modes of Governance

• Fiduciary mode key question -- "How are we
  doing?"
• Strategic mode key questions -- "What are we
  doing?" "Where are we going?" and
• Generative mode key questions -- "Why are we
  doing this?" "What are the possibilities?"

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Board Assessment Process

• Guidelines for assessment.
• Effective assessment tools.
• Review samples.

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An Effective Assessment Process

• Enthusiastic support board leadership.
• Based on a set of standards or best practices
  that characterize effective board performance.
• Formal process conducted on a regular,
  agreed-upon basis.
• Written assessment tool that all board directors
  complete is the centerpiece.
• Plan to use the results to set goals, implement
  and measure improvement.

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Board Assessment Samples

• MAP Assessment
• UWEX Assessment
• GLA CB Assessment excerpt
• McKinsey -- Short, Mid, Long Forms
• CPST Visionary Board
• 12 Principles of Exceptional Boards
• 10 Questions
• 20 Questions

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Why Boards Fail
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Why Boards Fail

• Ineffective recruiting process.
• Members lack understanding of the organization
  and their roles.
• Micro-managing.
• No well-planned rotation of members.
• No way to eliminate non-productive members.

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Why Boards Fail

• Too small.
• No well-planned orientation for new and old
  members.
• No strategic plan.
• No process for assessment.
• No functioning committee structure.

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Board Development Proven Practices
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Proven Practices

• Clearly define roles and responsibilities.
• Align key board processes with strategic plan.
• Just-in-time board orientation.
• Effective meetings Consent agenda and other
  tools.
• Committee effectiveness.

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Proven Practices

• Organizational dashboard.
• Board leadership succession plans.
• Board assessment.
• Board governance committee.
• Incorporate strategic deliberation into every
  board meeting

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1 Clearly Define Roles and Responsibilities

• Clarity re management and governance.
• Written individual board and committee
  descriptions that are current.
• Maintain clarity re board policy and oversight
  functions.
• Ensure that current job description is in place
  for the executive director.

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Board Job Description

• Attend all regular board meetings.
• Serve as an active committee member.
• Support fundraising activities.
• Prepare in advance for board policy and
  decision-making.
• Attend the annual board planning retreat.

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2 Align Key Board Processes With Strategic Plan
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Link Board Recruitment with Strategic Plan

• Review the strategic plan.
• Identify the skills, knowledge and relationships
  needed by the board to advance the strategic
  plan.
• Set clear recruiting priorities.

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Align Committee Structure with Strategic Plan

• Review committee structure as part of strategic
  planning.
• Align committees with plan.
• Leaner is better.
• Use task forces and workgroups in place of
  standing committees.

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3 Just-in-time Board Orientation

• An advance program of orientation and training to
  prepare new board members to hit the ground
  running.
• Focus on the strategic plan.
• Speed up the learning curve.
• Increase confidence and productivity of new board
  members.

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4 Consent Agenda

• Expedites routine business at a board meeting.
• Eliminates the need to vote separately on many of
  the routine items.
• Frees up time to address critical matters.

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5 Committee Effectiveness

• Fewer is better.
• Written committee descriptions.
• Aligned with strategic plan.
• An effective chair.
• Members thoughtfully appointed.
• Mix of board and non-board members.
• Accountable to the board.
• Well-run meetings.

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Annual Committee Board Meeting Calendar

• Fosters attendance and participation.
• Improves decision-making.
• Promotes coordination and increases productivity.

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6 Organizational Dashboard

• Increases effectiveness of board decision-making.
  
• Displays up-to-date information about key
  performance indicators.
• Corrective action can be taken before - not
  during or after - a crisis erupts.

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7 Board Leadership Succession Plans

• Identify critical leadership positions.
• Scout board leadership talent for the future.
• Written plan for fostering and developing future
  board leadership.

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8 Board Member Assessment

• Periodic assessment of board member and committee
  performance.
• Board meeting feedback form.
• Board follow-through.
• Relate findings to board nominations process.

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9 Governance Committee

• Continuous focus on identifying, preparing and
  recruiting future board leaders.
• Plan board education including new member
  orientation, ongoing training and board retreats.
• Assess board, chair, individual directors, and
  board meetings.
• Annually review governance practices and
  recommend changes.

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10 Incorporate Strategic Deliberation Into
Board Meetings
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Strategic Deliberation

• Use values and vision as the basis for dialogue
  on emerging issues.
• Use vision as frame-work for decision-making.
• Read, listen and look for future trends.
• Provide opportunities to share information at
  board meetings.

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Development of Board, Committee and Member
Action Plans
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Preparing for Action Planning

• Assure board understanding and commitment.
• Board Development Committee in place.
• Retreat event to analyze assessment results and
  develop action plan.

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Board and Committee Action Plans
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Personal Action Plans

• Actions I will commit to in order to
  increase/sustain my individual level of board
  performance.
• What I would need from the organization.

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Resources
Board Effectiveness Resource List
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Evaluation
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