As any nonprofit leader knows, a strong board of directors is critical to an organization’s success and long-term resilience.
But a strong, effective board doesn’t just create and manage itself.
In fact, too many nonprofit boards are struggling to perform their duties, let alone realize their greatest potential.
A 2015 report from Stanford Universityfound that half of nonprofit directors believe their fellow board members are not engaged in their work with the organization, while a third are not satisfied with the board’s ability to evaluate the performance of the organization.
Meanwhile, a full 70 per cent of nonprofit boards don’t have a succession plan in place in the event that the current CEO or executive director leaves, and 40 per cent don’t have formal targets in place for measuring CEO performance.
Considering that 70 per cent of nonprofits have faced one or more serious governance-related challenges in the past decade, these stats don’t bode well for the ability of nonprofit boards to quickly respond to issues as they arise.
So how can you build – and maintain – an effective nonprofit board?
Look no further! In this complete guide to building an effective nonprofit board, we’ve pulled together all the best resources to help you get started.
Whether you’re leading an established nonprofit or starting one from scratch, or whether you’re a CEO, volunteer board chair or staff lead for the board, this guide is for you.
Some of your top considerations should include:
How many board members are you legally required to have?Check the guidelines provided by the state or province in which you’re incorporating. Three is the most common minimum number.
What is the minimum and maximum term length for your board members?Again, your state or province should have guidance on term lengths. For example, in Ontario, the Not-for-Profit Corporations Act(ONCA) states that a nonprofit board member should have a minimum term of one year and a maximum term of four years (and may be re-elected or re-appointed at the end of that term).
Should you stagger board terms?Staggering board terms – with some board members committing to one year, some to two or three years and some to four years, for example – can be a good idea to prevent the full board from turning over all at once.
- What skills do your board members need to have?Depending on the mission of your organization, you may benefit from recruiting board members with expertise in specific fields, such as law, accounting, marketing or social services. But remember: All of your board members, regardless of their specific skills, should be passionate about your mission and committed to fulfilling their duties.
Creating Your Nonprofit Board Structure
You know how to go about forming your board, but you still have questions about the most effective governance structure.
Most nonprofit boards have a board executive and a number of directors, who may or may not serve on one or more committees.
Here are the four most common executive officer roles and some of the key skills you may want to look for:
Chair or president:This person oversees the work of the board and the organization’s CEO and/or senior management team. They should possess strong leadership skills and be invested in the success of your organization.
Vice chair or vice president:This person supports the work of the board chair and board executive, including filling in for the board chair when needed, and fulfills special assignments as required. They should be ready to lead and committed to learn about the ins and outs of your board.
Secretary:This person is responsible for maintaining meeting minutes and monitoring compliance with your nonprofit’s bylaws. They’re usually required to attend all meetings. Your secretary should be highly organized and detail oriented.
- Treasurer:This person tracks your nonprofit’s financial standing, reviews the annual audit and usually serves as chair of the finance committee. They should have a strong background in financial accounting.
Creating Board Committees
Creating committees – smaller groups of board members responsible for overseeing certain areas of work – can be an effective way of engaging your board, putting directors’ skills to good use and accomplishing better results.
The beauty of committees is that they can be struck at any time. Some committees may be standing, meaning they operate permanently on an ongoing basis, or they may be ad hoc, meaning they’ve been established to address a specific challenge or task that’s arisen.
Committees are typically struck by the board chair, who also appoints directors to serve on each committee. Board members who identify a need for a new committee can put forward a motion to create one.
Some of the most common board committees include:
Governance committee: Responsible for recruiting and orienting new board members and providing education opportunities for the board.
Finance or audit and risk committee: Responsible for reviewing the organization’s accounting policies and audit reports and helps identify and manage potential financial risks to the organization.
Executive committee: Responsible for dealing with significant issues that may arise in between board meetings. It’s typically comprised of the organization’s lead and board directors (staff and non-board volunteers typically don’t serve on the executive committee).
Fundraising committee: Responsible for developing fundraising strategies in support of the organization’s mission, including by supporting fundraising event targets.
Marketing committee: Depending on the size of your organization, the marketing committee can be responsible for either developing and executing a marketing strategy or providing advice to support staff-driven marketing strategies.
Here are a few key tips to keep in mind when developing a board committee:
Ensure the committee has a specific set of tasks and a specific goal or goals.
Don’t overburden members by expecting them to participate in too many committees.
Be mindful of the time commitment required by members participating in committees.
Be open to having non-board volunteers serve as members of the committee to provide additional skills, insights and support.
Board Roles and Responsibilities: Setting Clear Expectations
You can set your board members up for success – whether they’re brand new or they’ve been with you for a while – by helping them understand their responsibilities and establishing clear expectations for their role in your organization’s governance, work and mission.
But how do you know what those responsibilities and expectations should be?
Start by reviewing your state or province’s guidelines for nonprofit boards. The ONCA, for example, states that nonprofit directors must:
Act honestly and in good faith to serve the best interests of the organization.
Exercise the care, diligence and skill that a reasonably careful person would exercise in similar circumstances.
These are the most basic values and principles that every board member should adhere to.
Most nonprofits also expect their board members to fulfill specific duties and actions, such as:
Attending a minimum number of board meetings throughout the year.
Contributing meaningfully to board meetings while exercising good judgement and care.
Declaring any conflicts of interest and recusing themselves from discussion or votes which may present a conflict.
Keeping all information and organizational matters confidential.
Fulfilling duties as stated in the organization’s bylaws.
Avoiding participation in political campaigns in the name of the organization.
Each nonprofit will have their own unique expectations and guidelines for board members.
Board Training and Orientation
Let’s face it: Recruiting the best directors for your nonprofit just isn’t enough to develop and maintain a strong, engaged board.
A solid board orientation and training program, combined with a regular process for collecting and acting on feedback, can go a long way toward helping your board members contribute to the very best of their ability.
Remember: It’s never too late to get started!
Board orientation processes are important for new board members, but you can also offer orientation and training to even your longest-serving members if you’re looking for ways to strengthen board engagement effectiveness.
Hosting Effective Board Meetings
Have your board meetings become disorganized, too long, ineffective or – worst of all – just plain boring?
It might be time to consider a revamp of your board meeting processes.
Running efficient and effective board meetings can work wonders for improving board engagement and re-igniting that initial passion that first motivated your directors to get involved.
Send out the agenda early to make sure your meeting runs smoothly and on time.
Start and end on time. This shows respect for your board members’ time and helps make their participation on your board more manageable with their schedules.
Make sure someone is responsible for taking detailed minutes
Give everyone a chance to speak.
Evaluating Board Effectiveness
You’ve done all the right things to set up your board for success.
But how do you know what’s working – and what’s not?
Implementing a process for evaluating your board’s effectiveness is an important way to keep track of your board’s strengths and identify weaknesses that may require action.
A board self-assessment is an exercise in which the board evaluates itself. Each board member evaluates their own performance using a set of criteria as well as the performance of the board as a whole.
During a peer-to-peer assessment, board members evaluate themselves as well as their fellow board members. This exercise can be done anonymously to avoid potential conflict.
Assessment by the executive director
The board may be responsible for evaluating your nonprofit’s executive director, but your ED’s work is directly impacted by the effectiveness of the board!
Having your ED perform their own evaluation of the board as a whole – not of each individual director – can be an important tool for measuring how well the board is supporting and guiding the work of your nonprofit.
Are the board members performing their roles and duties?
Is the board and its members performing as expected?
How successful is the current chair of the board in running the board and the organization?
Procedure and resources
Are meetings organized and frequent?
Do committees have appropriate resources? Are they effective?
Are directors and board members being educated on rules and procedures?
Do board members get along? Do their attributes and skills complement each other?
Are meetings and discussions progressive and constructive?
What are the dynamics at informal gatherings (dinners, parties, retreats, etc.)?
How does the staff view the board?
What is the relationship between the board and members?
Do the members and the staff trust the board to make the right decisions?
If your organization is a chapter with regional or national boards, how is your board’s interaction with these?