Board Member WorkshopFebruary 8, 2013

Haas School of BusinessUC Berkeley

Welcome

Nora Silver .

Paul Jansen

Bob Miller

Jay Espovich

Colin Boyle

Jamie Allison-Hope

David Riemer

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Agenda

• 4:00 – 4:45 Welcome

• Dynamic Board Lessons

• Board Member Postings

• 4:45 – 5:30 Topic-Specific Group Coaching

• Governance, Leadership, Marketing,

Fundraising

• 5:30 – 5:45 Posting Shared Lessons

• 5:45 – 6:00 Individual Coaching as Desired

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Boards and Directors have Legal Duties of Care, Loyalty and Obedience

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Duty of care

Duty of loyalty

• An obligation to act in good faith – with best interests of nonprofit in mind – with such care of a reasonably prudent person

• Be informed e.g.– Attend meetings regularly – Seek and review necessary information

• Exercise independent judgment– Ask questions – avoid simply going along

with other directors– Rely only on judgment of dependable

sources• An obligation to keep confidences of nonprofit and avoid actions that benefit self at expense of nonprofit

• Avoid self-dealing transactions• Where directors’ firm provides services

or products to nonprofit, make conflict known to board, recuse self from discussions/votes

Duty of obedience

• Required directors to comply with applicable laws, adhere to bylaws and remain guardians of the mission

• Understand mission and bylaws• Ensure regulatory filings completed• Require operation audit and policy review

Hold public benefit corporation “in trust” for the community

Types of Boards

Organizing Board– small, homogeneous, informal – committed to purpose– Very hands on to support start up

Governing Board– larger and more diverse board– committees become important– shared authority between board and staff: board chair and

executive director are principal leaders– transition to governing board takes at least 3 years and a lot of

staff time

Institutional Board– very large (35-60 or more)– prestigious -- includes large donors or those with access to

funders– accepts significant responsibility for fundraising– often delegates some governance to executive committee

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Creating a Dynamic Board

• Monitor external and internal environment to prioritize areas for Board attention

• Ensure quality performance across 3 primary Board roles

• Develop a set of enabling practices around Board composition, size structure, processes, and staff relationships

Sha

pe m

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nd

stra

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Monitor and improve performance

Environment

Ensure leadership and resources

Enablers

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9 Responsibilities of Nonprofit Boards

Sha

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Monitor and improve performance

Ensure leadership and resources

• Select, evaluate and develop CEO

• Ensure adequate financial resources

• Lend expertise; provide access to people

• Enhance reputation of organization• Oversee financial management, ensure

appropriate risk management• Monitor performance, ensure

accountability• Improve board performance

• Shape, clarify mission and vision

• Engage actively in strategic decision making and policy decisions

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Responsibilities of a Non-Profit Board: Importance RatingsQ: Over the next one to two years, how important is it for your Board to focus on:

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3

1 2 3Low HighMedium

Rated Importance

Group Average Group Response Range

1. Clarifying the organization’s mission or vision

2. Resolving key strategic or policy issues

3. Developing CEO capabilities

4. Developing financial resources to support strategy

5. Providing expertise or access to support organizational priorities

6. Building the reputation of the organization with key stakeholders

8. Assessing performance against mission and key program priorities

7. Overseeing financies and ensuring adequate risk management

9. Improving Board performance

Ensure Leadership

and Resources

Monitor and Improve

Performance

Shape Mission and

Strategic Direction

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The Governance Gap

• 97% said that a high-performing board was important to a high-performing nonprofit...— However, only 19% said they were tapping their boards’ full potential

• 94% felt that their boards provide the appropriate level of strategic guidance…— However, only 46% thought that their directors would be able to summarize both

the mission and the vision of their organizations

• 77% of respondents indicated a desire to improve board fundraising, but…— Just 21% set individual board member fundraising goals— Just 38% provided fundraising training— Moreover, a mere 16% reported having individual board members receive formal

feedback on their performance at a regular interval

• Source: McKinsey survey of social services organizations9

Board Performance GPA

Fundraising

Increasing diversity

Community relations

Strategic planning

Monitoring performance

Knowledge of programs

Supporting CEO

Legal/ethical oversight

Financial oversight

Understanding mission

0 0.5 1 1.5 2 2.5 3 3.5 4

Director viewCEO view

Source: Boardsource Nonprofit Governance Index 2010

Survey response to “give your board a letter grade” on each dimension

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5 Enablers are Key to Closing Execution Gap

• Size and structure are a balancing act but must ensure coverage of 9 responsibilities

• Effective leadership must drive for a true partnership at board and committee level

• Composition requires needs-based management and a graceful transition mindset

• Sweating the details on process is critical to board function and engagement

• A trust-based relationship with CEO is the underlying foundation

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• Roles Matter: There are 9 clearly defined responsibilities of a nonprofit board, with a gold standard of performance for each. Increasing emphasis on:

• Multi-year planning

• Performance measurement and accountability

• Risk management

• Sweat the Enablers: Good governance is execution

• Pay attention to the enablers of execution, including the small stuff

• Board Chair as CGO

• Understand and address the “human” aspects of director interests and styles

• Pick Your Battles: There are lots of ways boards, as entities and directors as individuals, can help. Pick your spots carefully to allot valuable time where needed most

• Look in the Mirror: Invest significant time in board evaluation and continuous improvement

Summary Take-Aways

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AA Good Board is a Victory, Not a Gift Cyril Houle

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Learning from our Shared Experiences (10 min)

• Use Post-its to capture your answers to 4 questions and post them for all to see1. What does your board do well? (add org name)2. What can your board improve?3. What works that you can share with others?4. Advice for the Board Fellows program?

• Put initials on your answers and post them (one answer per post-it) to each of the 4 areas in the room

• We will share greatest hits and themes a bit later

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Breakout Group Coaching

• Board Officers and Leadership – Jay & Bob• Marketing: New techniques and

technologies to get your message out – David

• Governance and Board Development – Colin & Paul

• Fundraising –Jamie & Nora

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Board Experience Shared Learnings

• Themes

• Greatest Hits

• Take a few minutes to walk around and look at the postings of your peers

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Individual Coaching

• Coaches are available to speak with you 1 on 1.

• Your opportunity to:– get individual questions answered– meet one of the coaches you haven’t

already– follow-up on a discussion

• If not, you’re done and we appreciate your participation 17