How do you make a better nonprofit board?

Embarking on the journey to create a better nonprofit board starts with a crystal-clear vision. This vision should outline not only how the board should function but also the guiding principles and qualities it should embody.

To start the conversation, here is my suggestion:

The vision of a well-functioning board: an engaged board of directors committed to your mission, aligned with management and fully prepared to fulfill its separate and distinct role in the agency’s leadership hierarchy.

Engaged, Aligned, Committed and Prepared

Engaged.  Engagement is a strange word; it can mean anything from an agreement to marriage to a battle between two opposing forces.  In our sense, it is more than just a willingness to join a board. It means the intention to be active, energized, and “all in.” 

Board Education 101 tells us that directors are fiduciaries, and as we learn from the TV commercials, fiduciaries must act solely in the best interest of their clients. So good attendance is not sufficient. Directors must take an active role in supporting the organization through their preparation, advocacy, loyalty and willingness to learn.  Engagement also means the obligation to follow another fiduciary virtue -obedience -following the rules and assuring that the corporation does also.

Aligned.  Any auto mechanic would tell you that vehicles work best when all their wheels point in the same direction.  Golfers use alignment sticks in practice to ensure that all their body parts point the same way. Otherwise, the ball will fly off towards some unintended target. That’s true also for boards.  However, it doesn’t suggest that boards will never have differences of opinion or even the desire to take the organization in different directions. What’s important is that when all the debate is done, all those wheels ultimately point in the agreed direction.  There should be consensus among the board and agreement with the management staff (in the person of the chief executive). Frequent open conversations between the board and the CEO will support alignment. Still, reliance on the core strategic planning documents and processes is the most effective way to ensure all parties work under a common set of operating assumptions.  Annual budgets and annual operating plans align with the three/five-year strategic plan, which aligns with the Mission, Vision and Values. Everyone is moving in the same direction with a shared sense of purpose.

Committed.  Mission Statements do more than provide a focal point for developing strategic plans; they can offer unifying and motivating principles. For-profit corporations have a clear and straightforward founding principle—to return value to their shareholders in dividends or stock value appreciation. Judging the performance of publicly traded corporations, their directors and executives is relatively simple—how much wealthier have they made their owners?

Evaluating the performance of nonprofits can be a bit more challenging because it can be difficult to define “success” for those agencies.  Nonprofits can enjoy financial success, but rather than a testament to strong leadership, large profits can suggest the agency is not doing enough to address the community need it was created to meet.

A clear mission statement, therefore, can be the North Star against which performance can be judged.

Mission statements are also meant to inspire. When faced with board burnout or internal conflict, a good tactic is to return to the fundamental principles upon which the agency was founded. 

To be useful, mission statements must be carefully drafted to be both clear and inspirational. Simply to be “the best” or the “premier provider” probably will not cut it in terms of clarity or inspiration.  It also won’t be useful unless that is the direction you genuinely intend to take and you are prepared to accept the challenges and sacrifices it will take to get there.  Hollow mission statements are not motivational – that may account for the fact that many agencies hide theirs away.  Missions must be visible, revisited, and considered the driving force empowering leadership.  A board filled with directors not committed to the mission is like having your leadership populated by walking dead – smart people, but soul-less.  When times get tough, they will lose interest, drop out or seek to pass off their leadership role.

Prepared.  It is a scene that happens so frequently it is almost a cliche. Firefighters save an elderly woman from a burning building. A policeman delivers a baby in the middle of a busy highway.  A serviceman puts himself at risk to save a comrade.  When the world stops to honor these heroic actions, the hero’s response is the same: “I did what I was trained to do.”

If we can train people to be heroes, then we can train people to be great board members. But like the fireman, the police officer and the combat veteran, training needs to be practical, continuous and mandatory.  Unfortunately, for many boards, it is ignored.

An untrained board cannot realistically make a significant contribution to a professional management team with both experience and training. In healthcare, management teams are led most frequently by executives with advanced degrees, 10+ years of experience and a license that requires them to document continuing professional education.  

New directors start with a knowledge deficit and need a rigorous onboarding and mentoring program that prepares them to be knowledgeable and ready to participate as soon as their first board meeting.  The board and every director must also be committed to continuous education that assures that training occurs during and between every board meeting and has a higher expectation for those who aspire to lead the board.

Who are the leaders?  When we developed the Value Statement for Metropolitan Jewish Health System, we included “Leadership at All Levels” among our ten core values.  To use a Civil War analogy, a leader is anyone who picks up the flag and moves forward in furtherance of the mission.  In a more current example, a core principle of Disney training is that all “cast members” (employees) are leaders who can make guests’ visits unforgettable.  In complex organizations (including the U.S. Army and Disney), every individual has a specific role, which is no different for directors of nonprofit organizations.

The Leadership Hierarchy and the Role of the Board

In most states, corporate statutes governing nonprofits provide something like this: “The Corporation shall be managed by its board of directors.”  MANAGED. Directors are not boosters, supporters, or advisors. Their job is to manage; they are the ‘governing body,’ and the buck stops with them.  Yes, they hire a “chief executive officer” who is their conduit to the staff, but the CEO only exercises the powers given to her by the board.  Boards are meant to do the hard work of strategic planning, approving operating plans and budgets and overseeing the wide range of controls that ensure the corporation is operating lawfully.  That is a big job.  Importantly, it is a vastly different job than the one they delegate to the CEO.

So there it is: engaged, aligned, committed and prepared. It’s a big task but well worth it—just look at your mission statement.