Boards Behaving Badly
In September’s newsletter, we began our first short format article with a review of the ISER study on the economic impact of Alaska’s nonprofit sector. These short articles will have less emphasis on theory from national nonprofit leaders and rely instead on our own observations from eight years of experience working with nonprofits in Alaska. The new format should provide useful information that can be easily read in less than five minutes. We will offer short articles hoping to inspire readers to raise the level of discussion on key challenges our sector faces in Alaska.
This month the subject is clearly stated in the title. I do not have the actual number of individuals we have trained to serve on boards, but by now it has to be over 6,000. In our training we have presented insights from research on best practices. Foraker has eight Board Forum courses related to governance. We spend most of our time contemplating how to help you help your boards.
While most of our training receives high marks for the trainers’ skill, content, and group interaction, most of these classes must not be as effective as we would like. We continue to see the same bad decisions being made by normally smart, capable people serving on boards, many of who have attended one of our sessions. So if I can be so bold, I would like to re-state some of the many continuing issues we address about bad behavior on boards. I would assume that those of you reading this article are too engaged in the right behavior to be guilty of these infractions, but you will likely know someone who has displayed some of these bad behaviors. If so, please pass along the appropriate encouragement to help them find a new way.
So one may ask, why do we need good boards? The answer is simple – all research on effective nonprofits states that the success of organizations is best indicated by a competent board. While the right staff, unrestricted cash, a strong mission focus, and collaborations are critical for sustainability, an effective board is the most reliable indicator of sustainability. A competent board guarantees these other outcomes. The characteristics of a good board are:
- Balance of the right people, with varied backgrounds and skills and a true commitment to the success of the organization;
- Donors of time and money;
- Individuals who work together, as a group, to make the best decision for the organization, not themselves or other interests;
- A group who pays attention, asks questions, shows up and participates;
- A group with a process to manage and support themselves;
- A group committed to the success of their staff leader; and
- A group that understands its role is to monitor, not manage, so it allows its staff to manage the day-to-day while it serves as a think-tank, or a brain trust for the staff – and ultimately understands enough of the issues to make good governance decisions (policy) to guide the staff.
When boards behave badly, they exhibit various other behaviors. Here are a few board types we have witnessed and labeled (for fun and for clarity):
- Control Freak Board – A board with a member (or a few members) who control through their personal financial investment, sharing of information, or selecting and recruiting people they can control to serve with them on the board. These board members are not necessarily intentionally misbehaving, they just have a need to feel they are in control of something in their lives and, unfortunately, they choose their nonprofit work as that place. This type of board is identified when members stay on the board too long and other competent members stay long enough to understand that those few control everything. Then the competent members leave, with only the control freak and the members who are “controllable” to serve. Another sign of an organization with such board leadership could be frequent turnover of executive directors. No competent nonprofit professional tolerates the behavior of board members for very long.
- Want-To-Be CEO Board – When a board hires staff, its role changes forever from one where it governs and manages, to one where it only governs. The problem is that some board members never give up the control over operations. In the nonprofit world we call it “micro-management” and it is a very real problem because it almost always ends in frustrating competent staff to the point of resignation. This condition is often identified by frequent turnover in the CEO position. Failure to deal with the micro-managing members often results in the eventual meltdown of the organization. It also occurs when the organization experiences a CEO transition and the first people who want the job are board members.
- The Staff Friend Board – Some members of the board have a personal relationship with members of the staff. There is nothing wrong with such relationships as long as appropriate boundaries between personal friendships and professional board-staff roles are maintained. The only relationship a board member should have when it comes to the operation of the nonprofit is with the CEO. All business should be conducted through that channel. The only staff any board member should communicate with about an organization’s business policies is the exec – can I say this in any other way to drive home the point? When a board wants feedback from its staff about the CEO’s performance, it should only occur with independent, outside consultants who can filter staff comments for confidentiality and for bias. Boards should never contact staff for their perceptions about the organization’s performance, unless that query has been approved in cooperation with the CEO. When the board determines they have a problem they should seek professional assistance. If they have a CEO problem, they must deal with it as quickly as possible and always follow their policy concerning staff grievances if it concerns their CEO.
- The “Bobble-Head” Board – When the board listens to the CEO (or their control freak members), rarely asks questions, and takes the advice of either as gospel, conditions are ripe for a board to become incompetent. We have seen too many nonprofit organizations in Alaska hire a CEO with expertise in the mission, then go to sleep and let that individual run the organization with little to no board participation. While we encourage a positive trusting relationship between the CEO and board, we encourage the board to ask questions. Competent CEO’s want a board that is engaged enough to know what questions to ask. If you serve on a board where the CEO does not welcome reasonable inquiry, you may have a problem.
All boards need annual orientation concerning their roles and responsibilities. We can provide that information through our classes or by reading previous articles. These tasks are not intuitive and our best advice is to take time to focus on the board’s role every year to ensure that your board behaves well. The use of a governance or board development committee is a necessity. Written job descriptions, strategic identification of the right mix of skills and community representation, annual orientation to board roles and responsibilities, and an annual evaluation of board performance are the right tools to use to develop an effective board.