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Board Management Best Practices Part I - The Work 

September 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 Work" of boards: their practices, policies and habits. Here are four things your organization's board of directors can do to improve their practices: 

 

1. Regularly achieve 90% or higher attendance 

BoardSource recommends that boards regularly achieve 90% or higher attendance at meetings to excel at their varied and daunting functions, particularly the key tasks involved in oversight. To stay abreast of the organization's programming, scrutinize its finances and provide accountability to the chief executive, nearly every board member must attend each meeting to obtain the relevant information. Unfortunately, the report found that only 28.4% of boards meet this threshold, while another 56% reported average attendance of 75-89%. While these results are not dismal, they show that boards have a long way to go to fulfill their duties and increase their efficacy. Hopefully, by shoring up attendance, boards can improve their lowest-rated performance areas, particularly "Monitoring Legislative and Regulatory Issues" and "Building a Diverse and Inclusive Board With a Commitment To Equity."

 

2. Distribute meeting materials at least one week in advance of the meeting

In a similar vein, board members must be given adequate time to digest and analyze meeting materials so they can be prepared and properly scrutinize the organization's work. BoardSource recommends distributing meeting materials at least one week ahead of board meetings to give sufficient time for members to accomplish this. More encouragingly, 41% of boards meet this goal, while another 51% send out materials at least three days before meetings. Still, there is room for improvement in this area and increasing preparation time could also bolster performance in other areas such as "Monitoring Impact In The Context of The Strategic Goals Or Objectives" and "Evaluating The Chief Executive's Performance Against Goals."

 

3. Maintain a written employment contract for the chief executive

Promoting a healthy and productive relationship with the chief executive is a key component of a board's oversight role, however, boards often fail to perform their due diligence in this area. In the crucial area of employment security, BoardSource recommends that chief executives be given a written employment contract to decrease their feelings of vulnerability and permit them to engage in long-term planning for the organization. Regrettably, a staggering 73% of boards reported not having such a contract for their chief executive, which risks dampening the performance of leaders who otherwise might feel more able to invest in the organization's future. Furthermore, the report highlights the importance of a secure contract as a tool to promote equity for employees and candidates experiencing financial hardships.

 

4. Mandate full board approval of compensation changes for the chief executive

In a similar vein, the report highlights the importance of having a formal process for determining chief executive compensation. Unfortunately, only 55% of boards currently maintain such a process, leaving a vast number of organizations with piecemeal and improvised decision-making habits. More specifically, BoardSource recommends that the full board be involved in considering compensation changes for the chief executive, as opposed to only one committee (e.g., executive) or just the board chair. However, only 52.6% of organizations report following this practice, which severely risks neglecting the issue and the necessary scrutiny around compensation. 

 

Clearly, nonprofit boards have a long way to go to improve their functioning and maximize their efficacy. With these best practices, however, nonprofits can begin to take significant steps towards more resilient practices and increase satisfaction for board members and chief executives alike. 

Stay tuned for Part 2 of this series where I explore BoardSource's findings on "The People" who bring the board's work to life. 





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