The Board and The Executive

1. The Board and The Executive The Non-Profit Organization (or Not-For-Profit)

2. The Perspectives Learning Point

3. Purpose or Mission • What is the purpose of an NFP organization? • How is it defined? • Why is clarity important? Learning Point

4. The Board of Directors • Who is the constituency to which the Board is accountable? • Founders • Sponsors • Members • Clients • Donors • Community • How is the board elected? • Self perpetuating • By some part of the constituency • Owners/Sponsors/members • Terms • Size Learning Point

5. The Board Of Directors • The board has all responsibility and authority as a whole until it delegates to a committee or a manager. • Delegation flows from how the board decides to fulfill its responsibilities. • When it delegates responsibility it must also delegate authority. • It must retain effective oversight and accountability – this requires independence from management • How it does this depends on the nature of the organization. Learning Point

6. The Nature of the Organization • The Nature of the Organization determines governance style and operating practices • Small with founders doing all the work • Small with a working board and small staff • Larger with a staff but still a working board – a management board • Larger with a governing board and strong staff leadership – strategy and policy • Two-tiered board Learning Point

7. A Continuum of Board Functions • Operations The majority of the board’s work is doing functional frontline work as the organization’s volunteers. • Management and operations Most board work is managing the operations of the organization but also engages in work in administration or programs. • Management The majority of the board’s work is managing the operations of the organization. • Governing and management Most board work is focused on strategy and policy, but also includes some high level management functions. • Governing All board work is focused on the strategic, long-term direction of the organization, including external scanning, goal and strategy development, policy development and overall performance evaluation and accountability. Learning Point

8. Legal Obligations • Fiduciary duty • Duty of Loyalty • Duty of Care • Duty of Supervision • Duty of Dissent Learning Point

9. Duty of Dissent • Things must pass the smell test or be pursued • Too much harmony can be lethal • Culture of politeness • Group think • The fallacy of consensus • Culture of results • Confront the facts • See truth, be open minded • Dialogue and debate, not argument • Civility, respect and trust • Disagree, don’t be disagreeable Learning Point

10. Legal Documents • Articles of Incorporation • By-Laws • 501 (c) (3) Qualification • Accreditation Learning Point

11. Board Responsibilities • Determine the purpose of the organization • Provide the resources • Get the right people – particularly the CSO • Establish responsibilities and authority • Set goals mutually • Advise and consent on strategies to achieve goals • Align interests to achieve the goals • Know what is going on • Intervene when necessary Learning Point

12. The Players and Their Roles • The Chair: Leads the board, prime contact with the CEO • The Board: Governs. Time-Talent-Treasure • Committees: Executive, Nominating/Governance, Program, Finance/Audit, Development • The CSO: Management Responsibility • The Staff: Works for the CEO; Performs functions • The Development Officer – Manages fund raising • Volunteers: Works for the CEO, Performs functions Learning Point

13. The Partnership of the Board Chair and the Chief Staff Officer • Trust • Role definitions • Avoiding unexpressed expectations • Clarity about goals, policies, standards of performance • Defining norms for • Communications • Planning • Problem solving • Resolving conflict • Working styles Learning Point

14. The Partnership of the Board Chair and the Chief Staff Officer They need to be working together to: • Oversee the performance of the organization • Obtain resources • Examine high level long patterns of clients needs and organizational effectiveness, validate what they mean and determine how to react. • Manage the effectiveness of the Board Learning Point

15. Board Committees • A Board does much of its work through its committee structure • How do committees work? • They have a charge or assigned responsibility • They have specialized expertise consistent with their responsibilities • They can take action, or make recommendations to the board as determined by their charge Governance Committees versus Working Committees Learning Point

16. Typical Governance Committees • Executive Committee • Finance or Budgeting Committee • Development Committee • Nominating or Governance Committee • Program Committee • Planning Committee Learning Point

17. Board Meetings • Frequency and length of meetings • Agendas • Consent agenda • Review of the situation (Reports) • Briefings • Issues and Actions • Planning Focus: More on substance and the future Less on minutia and the past Learning Point

18. The Chief Staff Officer What does the CSO do? • Manages the organization consistent with the delegated responsibilities. • The CEO model versus the Executive Director Model • Is accountable to the board so must keep the board appropriately informed. • How is compensation determined? Learning Point

19. Board’s Role In Strategy Provide effective leadership that keeps the parts together: • In determining purpose • In hiring the right CSO • In determining the vision • In assessing the current situation and the need for change • In setting goals Learning Point

20. Board’s Role in StrategyRef: Boards That Deliver by Ram Charan • Many directors are frustrated that a basic question about the organization’s strategy is not answered to their satisfaction. • At the same time many CSO’s are frustrated that their boards keep revisiting the question, even after management has gone to great lengths to answer it. • This leads to lost opportunities for a board to add value. • The source of this angst is how and when strategy gets discussed. Learning Point

21. Board’s Role in StrategyRef: Boards That Deliver by Ram Charan • Discussion of strategy, too often, takes place • piecemeal over a series of meetings, often at the tail end. • In longer meetings devoted to one-way presentations of the strategy as a finished product • When discussion does occur with what little time is left, there’s no clear train of thought, and seldom any closure. Learning Point

22. Boards Role in StrategyRef: Boards That Deliver by Ram Charan • A process to help shape and get full understanding and agreement • Strategy is born from management’s analysis and creativity and presented to the board • The Board then probe it, question it, and offers opinions on it. • As the strategy is reshaped and improved, management and the Board reach a common understanding of it. Learning Point

23. Board’s Role in StrategyRef: Boards That Deliver by Ram Charan • Getting alignment on strategy includes: • A common understanding of what strategy is – and isn’t • A strategy immersion that gets directors thinking more deeply about the business and its context and creates agreement around a particular strategy • A strategy blueprint as a vehicle to get consensus on the company’s strategic direction • A strategy monitoring process to assess day-to-day performance toward the long term strategic goals Learning Point

24. Determining When Change is Required • A Shared Vision • Where are we now? • A Common Understanding of the current situation • Identifying emerging new trends • An understanding of and a commitment to the need for change – in terms of degree and urgency The Challenge: What needs to change? Learning Point

25. Building the Board • What do you want? • How do you find candidates? • How do you recruit them? • Who elects them? • How do you energize them? “You get the board you deserve” Charles Bryan Learning Point

26. The Variables • Leadership • Competence • Need a diversity of talent • Program • Business – legal, accounting, administrative • Fund raising • Demographics • Commitment • Relationships • Agendas: What are the politics? Learning Point

27. What Can Go Wrong?Syndromes Learning Point

28. What can go wrong?People Problems • Incompetence • Ineffective board leadership • Ineffective CEO • Ineffective Board Structure and processes • Attitudes and relationships • Entrenchment – a ruling clique • Politics/personalities • Indifference/lack of commitment • Lack of independence • Management Style and decisions • Micro-managing versus Governing • Failure to address issues • No clarity of purpose • Poor Planning and controls Learning Point

29. Secrets to Success • Clarity of Purpose • Strong, committed constituency • A competent and committed board that works well together • A strong CEO • An effective staff • A Hedgehog Concept Learning Point

30. Collin’s Hedgehog Concept From “Good to Great” Passion READ BHAG Excellence Economic Engine Learning Point