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Nonprofit Governance Change

Nonprofit Board Governance: Time for Change?

November 13, 2013

Imagine attending your next public or private board meeting and the following occurs:

• 60 percent attendance • Of those in attendance, 35 percent are prepared and engaged • Discussions involve daily business operations • Key financial initiatives are approved without clear information • Risks are not clearly identified or discussed

At this point, a number of you who serve on a public or private board are thinking one of two things: “I would never serve on a board with this low quality of governance” or “Patricia must have made an error and meant to begin with, ‘Imagine attending your next nonprofit board meeting.’”

It is time that the preconceptions of nonprofit board governance have changed and I suggest we begin by changing the words used in the nonprofit arena.

Poor concepts lead to poor performance

Members of public and private boards would not accept the above behavior from a CEO and the management team. Why would it be acceptable, then, when it is associated with nonprofit board behavior? Many will answer that because of the large number of members on nonprofit boards, it is difficult to insist on full attendance, preparation, and engagement. However, this reasoning is not sound.

For starters, language and vocabulary that one would use in reference to for-profit board should be used when discussing their nonprofit board. The variances in linguistics tend to permit a divide in standards of performance of the boards. Instead of donors, those who give money to a nonprofit organization should be called investors. They may not receive a financial profit, but they do profit expressly from the success they helped create for organizations they are passionate about.

Inside the nonprofit board room, members must be relentless in creating a culture that values performance assessment.

It is imperative that they evaluate a strategy that has failed them and learn from errors. Presidents and Executive Directors need to be challenged by board members to ensure that the group is achieving its mission. Time is valuable and cannot be wasted on logistics and operations, but rather must be devoted to focus on mission. Although public and private profit board metrics differ from those of nonprofit boards, the emphasis that for-profit boards place on quantitative analysis is something to be mirrored. It is nearly impossible to measure whether a museum of art is inspiring more people today than it did five years ago. Through honest analysis of what did not work, however, a board is on its way to finding what will work in the future.

Revised attention to successful management will alter the perception of nonprofit boards. When we place more importance and responsibility on the members of these boards’ attendance, preparation, and engagement will increase to the levels one sees in for profit board meetings.

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