How to Build a Better Nonprofit Board
Clarke Murphy
Board and CEO Leadership Advisor, Russell Reynolds Associates | CEO Emeritus | Board Director | Best-selling author of Sustainable Leadership
Nonprofits play an essential and growing role in the world’s social, political and financial landscape. There is little research, however, around how these institutions are governed at the non-executive level and how board structure and composition vary among different types of nonprofit organizations. To fill this information void and provide transparency around best practices, we analyzed the boards of dozens of leading U.S.-based nonprofit organizations, including private and community foundations, domestic and international NGOs, museums and performing arts institutions.
We found that the first task is to get the fundamentals right. There is a wide range in board composition and practices across the nonprofit sector, and it is important to consider the specific context and environment in which each organization operates. So what should boards look at to ensure the basics are correct? Despite context-specific differences among nonprofits, nonprofit boards face many common themes, including room for improvement in terms of diversity, effective processes and board engagement:
(1) Board Member Composition and Diversity: From a composition perspective, nonprofit boards—which exceed Fortune 500 companies in terms of gender diversity but not ethnic diversity—need to contextualize their diversity efforts and hold themselves accountable to seeing these goals achieved. Whether by developing a potential pipeline of diverse board members or reviewing board selection criteria and processes, nonprofit boards need to address a new imperative: that of reflecting the constituencies they serve. Our data—according to which the majority of board members do not have digital experience and spread their time across multiple additional boards—also suggest a need to align recruitment criteria with organizational needs.
(2) Effective Processes: From a governance perspective, boards need to set in place processes that ensure individual board member participation (e.g., through performance evaluations), as well as general board effectiveness (e.g., through the establishment of an effective and productive meeting agenda). For such processes to make a meaningful difference, though, the right people need to sit at the boardroom table.
(3) Engaged Members: Members’ motivations for joining a nonprofit board are predominantly altruistic; that is, to serve the organization and contribute to its success. Yet, a Stanford Business School survey found that half of committee chairs are unsatisfied with member engagement. One reason for this disconnect may be that nearly three-fourths of nonprofit board members serve on an average of four other boards. Nonprofit boards should be clear and candid about time and resource commitments that board membership requires and recruit accordingly.
To improve governance, boards need to go beyond the traditional emphasis on raising funds and focus more on providing professional expertise, representing the needs of the communities they serve, and establishing more stringent performance and management evaluations. Rising to this level of governance oversight takes time, especially when many nonprofit boards struggle with basics such as determining the ideal board size and recruiting the right members with the requisite diversity of skills and experience, as well as the willingness and ability to actively execute board member responsibilities.
The unique challenge faced by nonprofit boards is the dual need for their members to maintain good governance and material support, which often includes both financial and technical expertise. Carefully delineating a board’s governance role around strategy, talent and fiduciary responsibilities from its members’ contributions such as fundraising, marketing expertise and digital knowledge is often a critical place to begin in forging an effective and highly engaged nonprofit board. Getting governance basics right will allow nonprofits to fulfill their mission more effectively.
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7 年érica Rodrigues
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7 年Morad Samara
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7 年For our Foundation, EternalFeminine.org, we do not allow board members to have any involvement in fund raising. This lowers conflicted interests, gets more day to day help from board members, and makes fund raising so very much easier. Those giving the money then provide much better oversight of board member quality and involvement. We raised more than five hundred million in less than six months by excluding board members. Of course this is outside the US.
OD & Exec Leadership effectiveness Coach |Speech Coach |Board Coach |Professional Certified Coach-ICF |Founder & 1st President, ICF-Kenya Chapter |International Mediator |Facilitator & Trainer |Distinguished Toastmaster
7 年Clarke, Very well thought out and thanks for sharing. Board constitution is where all is made or lost for any organization. It starts with finding passionate people. Most Government institutions fail because of the culture of political reward where most Boards end up with busy bodies. Altruistic and passionate boards for NGOs make a huge difference and finding these people may be a challenge. To deal with this, it starts with clarity of Business Plan Objectives that then determines working teams and who head those teams.