Responsibilities of Non-Profit Board Members

“Few things help an individual more than to place responsibility upon him, and to let him know that you trust him.”  Booker T. Washington

Consider the following recent news headlines:

• 1 in 7 Americans are living at or below poverty level (44 million), the worst level since the 1960s
• Close to 50M Americans have no health insurance coverage
• 48 out of 50 States have budget deficits resulting in service reductions
• The Federal budget deficit for 2010 may exceed $1.3 Trillion

Each of these headlines may have a significant impact on your non-profit organization’s programs and services.  And as the challenges continue to increase, the need for effective Board leadership is an absolute necessity.  However, the self perpetuating Board model used by most non-profits creates unique and interesting challenges.

The metaphor of a three-legged stool is appropriate to describe the need for successful board recruitment and leadership.  The first leg of the stool is finding board candidates.  The demand-driven expansion of the non-profit sector has collided with the dwindling supply-side pool of eligible candidates who have the time necessary to commit to a volunteer board.  Frequently, CEOs of non-profits are increasing their recruitment efforts to a year-round activity.

You must find these candidates.  Your organizational success depends upon it.
The second leg of the effective board stool is to provide board members with an appropriate level of continuous education and training regarding the organization, its purpose and activities.  In this area, board orientation is a must, both in written and oral form.  Take the time to educate and train your board members.  You will reap many rewards for your organization.

The third leg includes commitment, constructive involvement and retention.  In our light-speed society, time is a precious commodity for everyone, but especially for the people you want on your board.  Energize them with management enthusiasm for your organizational purpose and mission, and challenge them to provide their technical and financial assistance on a regular basis.  More importantly, provide them with a clear understanding of their responsibilities.

The BoardSource.org organization, formerly the National Center for Non-profit Boards, is an excellent resource dedicated to improving the effectiveness of non-profits.  There are approximately 1.5 million active non-profit organizations in this country.  With an average board complement of 15, this means there are more than 20 million people serving on non-profit boards – a staggering number that illustrates the magnitude of the need and potential candidate-supply problem.

The BoardSource.org organization has developed the following list of basic responsibilities for non-profit board members.  (Fortunately, the organization shares my appreciation for David Letterman and his “Top 10” lists.)

Please copy this article and distribute it at your next board meeting.  At a minimum, it will serve as a reminder to each board member as to his or her primary focus and responsibilities.  And who knows, perhaps it will stimulate action for improvement in one or more of these areas.

1.   Develop mission and vision statements
For an organization to be effectively managed and guided, it must have a clear mission that defines its purpose and objectives.  Vision statements are an essential part of non-profit board governance.  A vision statement looks to the future and provides the framework for where the organization is headed.

While we are on the subject of looking to the future, many observers of non-profits maintain that the typical board spends 80 percent of its time focusing on the past and 20 percent of its time looking to the future.  The most successful non-profit boards do the opposite.

2. Select a CEO
Effective leadership is a common element of success in any organization, regardless of its purpose.

3. Evaluate the CEO’s performance annually
Though board members might clearly understand their responsibility for selecting the CEO, performance evaluations can be the most difficult of all board responsibilities. 

The key to an effective performance evaluation is a clearly defined process that assigns responsibility to either the board chair, executive committee or a compensation committee.  Appraisals and contributions from all board members and key management-team members are essential to make the process successful and productive.

4. Pursue fundraising and development
In a way, one could say that we have come full circle since Ben Franklin’s first honorary non-profit board in 1752.  After 50 years of expansion in government funding of non-profits, we realize that the basic foundation of their success is volunteer time and financial support.  If your organization lacks strong constituent support, watch out.

5. Ensure effective organizational planning
Strategic or long-range planning presents a significant challenge for most non-profit boards.  As volunteers with limited terms of service, board members often find that effective involvement in organizational planning can be difficult.

But the days of three to five-year updates of strategic plans should be behind us.  In today’s rapidly changing business environment, it is imperative for boards to establish an effective process that integrates the annual budget plan into a continuous evaluation of overall strategy.

6. Manage financial resources
All board members have a fiduciary responsibility.  In today’s environment, an annual conflict-of-interest declaration policy with appropriate review and action is one of the most effective means of reinforcing this responsibility to each board member and preventing problems.

7. Enhance the organization’s public image
The board serves as a vital link between the organization’s staff and volunteers, as well as its members, constituents and clients.  An effective public relations program is essential to a successful fund-raising and development program.

A positive image is the cornerstone of an organization’s success.  Think about it – if you needed brain surgery, would you prefer the Mayo Clinic or a V.A. hospital?

8. Determine and monitor the organization’s programs and services
In my view, monitoring programs is primarily a management function.  But the board must take a leadership role in determining when it is appropriate to expand, eliminate or modify services.  Many boards are ineffective in this assessment; consequently, it is a key factor in the failure of many non-profit organizations to achieve their mission and vision

9. Serve as a court of appeals
From time to time, there may be situations where the board will be called upon to help the CEO resolve disputes, including personnel-related issues.  Again, this is primarily a management function, and the board should make every effort to avoid regular or direct involvement in internal disputes.  It should, however, be supportive of the CEO in these situations.

10. Assess your own performance
Last, but certainly not least, is the need for self-evaluation and assessment.  The most common means of satisfying this responsibility is to make each board member aware of it when carrying out all other board requirements.

Many boards have periodic retreats to evaluate their performance.  One of the best approaches I have seen in this area is a candid and anonymous written survey of board-member perceptions prior to a retreat session.  Our firm has recently developed an assessment tool for this purpose.

The challenges facing non-profits are many, but the opportunities are greater.  Use these guidelines as a foundation to capitalize on your opportunities in a most challenging economic environment.

If you have any questions about thwarting these challenges, give us a call at 1-800-487-7624.