Presented by: BoardSource Building Effective Nonprofit Boards.

Effective Board Leadership

Presented by:

BoardSourceBuilding Effective Nonprofit Boards

Vernetta L. Walker, J.D.

Relevant Experience:Senior Governance Consultant and

Director of Consulting, BoardSourceAssociate General Counsel, State

Nonprofit AssociationFoundation Program OfficerPracticing AttorneyBoard Member

BoardSource

Enables organizations to fulfill their missions by helping them build effective boards

Resource for practical information, tools, and best practices, as well as training and leadership development for board members of nonprofit organizations

Formerly National Center for Nonprofit Boards

What We’ll Cover Today

What the board is responsible for and how to accomplish it

The three “duties” of board membersPractices to become strategically

focused and engaged as a board

Agenda

I. Board Governance RolesA. Setting Organizational DirectionB. Ensuring Necessary ResourcesC. Providing Oversight

II. Individual DutiesIII. Leading Trends & Exceptional

Practices

What is Governance?

1. Bright people using common sense and doing what comes naturally

2. Steering, controlling, and influencing from a position of authority

3. Playing a leading role in continuously answering: (1) Where are we headed? (2) What should we be now and in the near future? (3) How well is our organization performing?

4. All of the above5. 2 & 3 above

I. Board Governance RolesA. Setting Organizational Direction

B. Ensuring Necessary Resources

C. Providing Oversight

A. Setting Organizational DirectionDeveloping and maintaining a focus on:

Mission Vision Values

Strategic Thinking and Planning

Planning Questions

1. What goals must we achieve, and what strategies should we choose in order to meet these needs?

2. How are the next five years likely to be different?

3. What changes do we need to make now to adjust?

B. Ensuring Necessary Resources

Identify resources needed: 1. Capable staff

leadership 2. Adequate financial

resources3. Positive public

image

Determine how board members will participate in resource development.

Board Development Trends1. From seeking comrades to finding

colleagues

2. From constituting boards in large numbers to right-sizing to ensure effectiveness

3. From recruiting based on personal relationships to recruiting selectively based on skills and influence as they relate to strategic focus and direction

4. Informal orientation to formal orientation

5. From no term limits to term limits

Board Development

Identify

Cultivate

Recruit

Orient

Involve

Educate

Rotate

EvaluateCelebrate

The Board’s Role in FundraisingDefine the mission and plan for

the futureSee that there is a development

plan and monitor its progressCreate development policies Participate

C. Providing Oversight

Financial -- establish budget guidelines and oversee financial management; risk management

Program -- plan, monitor and evaluateFiduciary oversight -- compliance,

values, conflicts of interest, transparency and accountability

Financial Policies and Practices

Establish budget guidelinesOversee financial management

Ensure that the necessary financial policies are in place

On a regular basis, review financial statements, understand what they say, and ask questions to ensure accurate understanding

Review audit report and take action as needed Page 11

Using Dashboards

Income Expenses Net Income$0

$100,000

$200,000

$300,000

$400,000

$500,000

Operating Revenue & Expense Budget vs Actual

Year to Date February 28, 2007

BudgetActual

Oversight - What the Board Should Expect from the Head of School:

Strategic information that will assist the board in its governance roles

Proposals for policy changes Identification of issues that need board

attention No surprises

What the Head of School Should Expect from the Board:

Timely and clear decisions Board members who are informed and

prepared Mutual accountability No micro-managing A board that speaks with one voice No surprises

II. Individual Board Member Duties

Duty of Care - use the same care that an ordinarily prudent volunteer would exercise in a like position

Duty of Loyalty – undivided allegiance when making decisions

Duty of Obedience – follow the law and your mission

III. Exceptional Practices

The Source: Twelve Principles of GovernanceThat Power Exceptional Boards

1. Constructive Partnership

2. Mission Driven3. Strategic Thinking4. Culture of Inquiry5. Independent-

Mindedness

5. Ethos of Transparency

7. Compliance with Integrity

8. Sustaining Resources

9. Results-Oriented10. Intentional Board

Practices11. Continuous

Learning12. Revitalization

INTENTIONAL BOARD PRACTICESExceptional boards intentionally structure themselves to fulfill essential governance duties and to support organizational priorities.

STRUCTURE + MEETINGS Board structure and Size Committees and task forces Agendas

Board Meeting Trends

Receiving and reviewing vast amounts of information to receiving targeted and strategic information related to key issues

Preparing agendas which reflect past activities to preparing highly structured agendas to address key organizational strategies

Meeting on a monthly basis to focus on key strategic issues to meeting less often and on a more ad-hoc basis

Effective Board Meetings Agendas focus on strategic issues

rather than on administrative detail or listening to reports Consent agendas covering routine issues Background information distributed in

advance Regular use of board meeting evaluations

Clearly stated objectives for each meeting

Regular use of executive sessions (unless prohibited by state “sunshine” laws)

Effective Board Meetings

Board members are prepared Information is presented clearlyBoard members have

opportunities for asking questions and discussing issues on the agenda

The chair keeps the board on task

Decisions are made and understood

Board Meeting MaterialsWhat, how much, why, when Minutes

Content and formatReports

From committees, CEOBackground materials for

discussionEducational materials

Between Board MeetingsUse of technology for information

dissemination, discussion, and routine decisions

Written guidelines for how and when to use e-mail for board business

Seek clarification or additional information as needed before the board meeting

Governance Structures Trends

Making decisions as a committee of the whole to organizing effective committee structures to recommend policy to the board

Focus on standing committees to increasing use of task forces and ad hoc committees

Prerequisites for Effective Committees and Task Forces

Need a clear charter: What is each group responsible for achieving? By what time?

Understand basic role: Advisory to the board or carrying out an organizational task? Accountable to whom?

Report appropriately to the board: in writing, stating purpose of the report.

Other Ideas to ConsiderExecutive Committee: Severely

limit its use or eliminateEstablish a Governance Committee

Year-round attention to board developmentTry a zero-based committee

structure Periodically consider the organization’s

strategic needs and adjust committee and task force structure accordingly

What Will You Do Differently?

Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.”

Margaret Mead

BoardSource

1828 L Street, NWSuite 900

Washington, DC 20036-5104Phone (202) 452-6262

Web site: www.boardsource.org