Board Management Best Practices Part II - The PeopleSeptember 2022
Every two years BoardSource, the leading expert on nonprofit board management, publishes the Leading With Intent report, which documents their recommended best practices for managing boards. The report dissects survey results from a national group of hundreds of board members and chief executives to provide a rounded picture of the way boards function and whether they live up to these recommended practices. In this blog post, I explore the 2021 Leading With Intent report for its recommendations related to "The People" aspect of boards: their recruitment, personnel policies and engagement with the CEO. Here are four things your organization's board of directors can do to improve their composition and relationships:
1. Recruit members who excel at both the internal and external functions of the board.
BoardSource recommends recruiting board members who add value to both the internal and external activities of the board, which is easier said than done given the board's vast number of responsibilities. CEOs overwhelmingly report having members who perform well on internal functions like strategic planning and financial oversight, while the executives are far less confident in their board members on external matters like fundraising and lobbying. This concurs with the lower ratings that CEOs gave to the board than board chairs did on several external functions such as "Monitoring Legislative and Regulatory Issues" and "Leveraging Board Connections and Networks To Influence Public Policy Decisions." However, many external activities received lower rankings than internal tasks from both sets of respondents, so the problem clearly cannot be reduced to perceptual differences between CEOs and board chairs.
2. Target your recruitment for diversity, skills and community connections.
Despite some racial progress among nonprofits over the past few years, diversity among board members remains fairly paltry. While 78% of board members are white, that figure increases among the more senior positions: 83% of board chairs and 87% of chief executives. Clearly, boards must dramatically improve when it comes to recruiting for diversity. Additionally, the report found that boards that plan out the diversity, skills and community connections they want on the board find overall recruitment to be easier for them than those that do not. While recruiting for diversity is a necessary goal on its own terms, it is also key to improving the ease of overall recruitment.
3. Enforce term lengths and term limits for committee members.
BoardSource recommends enforcing term limits and term lengths for all committee members, however, boards have a significant amount of ground to gain in this area. Only 54% of boards follow both of these practices, while 24% have no term limits. Almost all boards have term lengths between 2-3 years, while most boards limit committee membership to 2 or 3 terms. Nonprofits need to enforce these limits to refresh the talent and engagement of board members, as well as ensure that a diverse group of individuals can participate on these committees.
4. Conduct an executive session at each meeting, with or without the CEO present.
BoardSource also recommends that boards evaluate their CEOs at each meeting, regardless of whether the executive is present. This regular scrutiny is vital to holding the CEO accountable to performance goals, as well as maintaining a constructive dialogue with them. However, only 26% of respondents reported holding these sessions every meeting, while a frustrating 9% reported never holding these sessions. It is perhaps unsurprising that CEOs only gave a C+ rating to their board's performance of "Evaluating The Chief Executive Performance Against Goals." Encouragingly, however, among those boards that do hold executive sessions, 64% of them hold the sessions whether the CEO is present or not. Boards must maintain this two-way communication with the CEO to ensure that organizational goals are being met and critical attention is paid to the CEO's work.
Nonprofit boards certainly have room for improvement when it comes to their diversity and accountability for themselves and their CEOs. With these best practices, however, boards can evolve past outdated and ineffectual habits and create a more productive environment for the entire organization.
Stay tuned for Part 3 of this series where I explore BoardSource's findings on "The Culture" and "The Impact" that boards seek to create in their work.
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