Friday, September 7, 2012

If I Could Assemble the Perfect Board of Directors

Because I deal with numerous small and newer nonprofits, I see many ineffective boards. Not bad boards, in the sense that they are disinterested, or self-serving (those tend to crop up more in long-established organizations), just good people with good intentions and a lack of organization and little to no understanding of what a nonprofit board is supposed to accomplish.
The first board of directors for new NPO’s is typically comprised of people united in their vision for the organization. They took the steps to “make it happen”. They are emotionally and often financially invested in providing goods or services to needy populations of one sort or another. They are the “founders”. That’s a great place to start, but the very closeness they first enjoyed, eventually leads to a sort of organizational paralysis. 
The Board, by definition, is not supposed to perform the daily duties of running the organization. They are supposed to formulate policy, generate the first budgets, write and approve the first strategic plan, and provide ongoing ethical, financial and legal oversight (governance) for the organization. At the outset, the lines between employee and board member are going to be blurred.  Most initial boards do not observe a firm policy for term limits and recruitment of new board members.  They may have such a policy in the bylaws, but in reality, their investment in the organization makes it very difficult to add new blood.
If I could design the perfect first board, I would envision it as having enough members to form committees or at least to have “specialists” in one area or another.
My ideal board would have:
A.  One member with a financial background, to evaluate investment strategies and assess the financial statements with a professional eye. This could be a CPA, a banker, an investment broker or anyone that deals with numbers and finance on a daily basis.
B.  A marketing/public relations/fundraising professional to evaluate fundraising and campaign strategies.  
C.  An attorney, to ensure that the NPO doesn’t run afoul of the myriad regulations governing nonprofits.
D.  One or more business owners or managers, to provide common sense perspectives on the organization.   
E.  The founding members, to keep the passion alive.
If the founders themselves encompass these attributes, fantastic!  If not, I would advise them to recruit members that do, at the outset.   One caveat here…although I recommend having professionals on the board, remember that they can’t benefit monetarily from those skills as contractors to the organization while they are serving on the board. Your financial person can’t be the CPA who performs your audit, for instance.
And, as hard as it may be, plan on adding new people to the board on a regular basis.  That might be every two years, it might be every four years, but recruit, evaluate and add them regularly. Of course, that means that at some point, someone is going to have to “retire”, or you are going to have a 500-member board.  Plan for that in your initial bylaws, and accept that if new members are properly vetted, they will be an asset to the organization.

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