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BoardEffectwww.boardeffect.com. 2. Goals for this Session. Review non-profit board roles in contextDescribe board roles and responsibilities the art of steering" the organizationProvide examples, details of board roles, group discussionExplore areas for further development for you and your board (self-assessment).
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1. Board Roles & Responsibilities
2. BoardEffect®
www.boardeffect.com 2 Goals for this Session Review non-profit board roles in context
Describe board roles and responsibilities – the “art of steering” the organization
Provide examples, details of board roles, group discussion
Explore areas for further development for you and your board (self-assessment)
3. BoardEffect®
www.boardeffect.com 3 What Is a Non-profit? Organizations dedicated to promoting charitable causes
Governed by voluntary boards of directors
Do not have the generation of profit or disbursement of revenue to shareholders as the primary purpose
Regulated by Canada Customs & Revenue Agency’s Charitable Division
Tax exempt Charities can issue receipts donors can use to claim deductions on their taxes
Charities must use 80% of receipted gifts must be used for charitable purposes
Charities have to register with CCRA
Both have to file annual tax forms within 6 months of FY closeCharities can issue receipts donors can use to claim deductions on their taxes
Charities must use 80% of receipted gifts must be used for charitable purposes
Charities have to register with CCRA
Both have to file annual tax forms within 6 months of FY close
4. BoardEffect®
www.boardeffect.com 4 Canadian Non-profit Sector ~200,000 non-profits in Canada
Employs 2 million+
Represents 8.5% of GDP
Adds $75.9 billion to the economy
40% of volunteers serve on boards
“The Canadian Nonprofit and Voluntary Sector in Comparative Perspective,” Imagine Canada and Johns Hopkins University, 2005 ionion
5. BoardEffect®
www.boardeffect.com 5 Board of Directors Board serves as the leadership of the organization
Board stewards the mission and serves as the “eyes and ears” of the organization
Board members deliberate issues independently, in committee, and collectively as a body, but speak with one voice
6. BoardEffect®
www.boardeffect.com 6 Non-profit Management Accountability
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www.boardeffect.com 7 Organizational Basics
8. BoardEffect®
www.boardeffect.com 8 Board Member’s Legal Duties Duty of diligence
Act reasonably, prudently, in good faith and with a view to the best interests of the organization and its members
Duty of loyalty
Place the interests of the organization first, and to not use one’s position as a director to further private interests
Duty of obedience
Act within the scope of the governing policies of the organization and within the scope of other laws, rules and regulations that apply to the organization
“Directors’ Liability: A Discussion Paper on Legal Liability, Risk Management and the Role Of Directors in Non-Profit Organizations,” Volunteer Canada, 2002.
9. BoardEffect®
www.boardeffect.com 9 Duty of Diligence Acting in the best interests of the organization
Adhering to professional standards – even when you’re off duty (e.g., accountant)
Taking time to research & deliberate
Staying well-informed of activities and finances
Anticipating consequences of decisions
10. BoardEffect®
www.boardeffect.com 10 Duty of Loyalty Interests of organization come first
Disclosing/avoiding conflicts of interest
Maintaining confidentiality
Board acts as one entity – decisions of the board are spoken with one voice
11. BoardEffect®
www.boardeffect.com 11 Duty of Obedience Understanding and adhering to the organization’s bylaws, policies, rules & regulations
Ensure others adhere to the rules
Ensure documents are current & accurate
Make sure organization abides by all appropriate laws (for employers, etc.)
12. BoardEffect®
www.boardeffect.com 12 5 Main Areas of Governance Vision, Planning & Evaluation (VPE)
Financial Management & Fundraising (FM/FR)
Human Resources (HR)
Advocacy & Community Relations (A/CR)
Organizational Operations, including Board Self-Governance (OO)
13. BoardEffect®
www.boardeffect.com 13 Board Responsibilities The Board’s Primary Responsibilities:
Determine mission and purposes (VPE)
Select the chief executive (HR)
Support & evaluate the chief executive (HR)
Ensure effective planning (VPE)
Monitor & strengthen programs & services (OO, VPE)
“Ten Basic Responsibilities of Nonprofit Boards,” Richard Ingram, BoardSource, 2009.
14. BoardEffect®
www.boardeffect.com 14 Board Responsibilities Continued Ensure adequate financial resources (FR/FM)
Protect assets and provide financial oversight (FM)
Build a competent board (OO)
Ensure legal and ethical integrity (OO)
Enhance the organization’s public standing (A/CR)
“Ten Basic Responsibilities of Nonprofit Boards,” Richard Ingram, BoardSource, 2009.
15. BoardEffect®
www.boardeffect.com 15 #1: Steward the Mission Making sure the mission is clearly and accurately stated
What the organization is and does
Defining the vision
Where the organization is heading
Provides the roadmap and drives the organization
Used as the compass for all programs and services
16. BoardEffect®
www.boardeffect.com 16 Personal Connection to the Mission In groups, discuss your own connection to your organization’s mission or vision
What brought you to the organization? What keeps you coming back?
What skills do you bring to the board?
How engaged are you in board activities?
What impact are you having on achieving the mission?
17. BoardEffect®
www.boardeffect.com 17 #2: Hire the Executive Director If the organization has paid staff, the board has one employee, the Executive Director
If there are no paid staff, the board takes a more hands-on role in management, as well as governance
Ensure the chief executive role is clear, with a written job description, and tied to strategic goals
Personnel committee
Clear expectations on both sides
Experience, expertise required for the job
Determine compensation
Conduct search – due diligence
18. BoardEffect®
www.boardeffect.com 18 #3: Support & Appraise the Executive Director Two-way communication – ongoing feedback, input
Process for performance reviews that the ED knows about and is comfortable with
Acknowledging performance appropriately (e.g., compensation increase, public recognition, constructive feedback, etc.)
Chair and ED work together to ensure the board is functioning well
19. BoardEffect®
www.boardeffect.com 19 #3: Support & Appraise the Executive Director Introduce the ED to important contacts
Invite ED to important social functions
Receives recognition for good work
Encouraged to take time off
“Daring to Lead”
2/3 nonprofit ED’s are in role for the first time
Fewer than half plan to take another ED role
Longest tenured ED’s feel supported by board
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www.boardeffect.com 20 #4: Vision & Planning Ensure planning takes place regularly
Strategic planning committee
Participate actively in the planning process
Evaluate the process, not just its results
Formally approve agreed-upon priorities
Use the priorities to structure board meeting agendas, budgeting, other discussions
21. BoardEffect®
www.boardeffect.com 21 #4: Vision & Planning Role in planning encompasses:
From the “MFRC Board Orientation & Training Manual”
Strategic planning
Ensuring adequate community needs assessment
Identifying service priorities
Developing annual organizational goals, objectives and performance indicators
Ensuring organizational evaluation & service evaluation
Sample Strategic Plan available here: http://ctb.ku.edu/en/dothework/tools_tk_content_page_193.htm
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www.boardeffect.com 22 #5: Monitor & Strengthen Programs Ensuring the activities of the organization align with the stated mission and purposes
Program committee
Focus on the organization’s impact
What information will help us assess effectiveness?
What difference are we trying to make?
How do we know whether we are making a difference and meeting the mission?
23. BoardEffect®
www.boardeffect.com 23 #5: Monitor & Strengthen Programs Periodically review the effectiveness of programs and services
Make it part of the planning process
Reviewing all existing programs through the lens of priorities, mission
Cost-benefit ratio; user satisfaction; competition
Due diligence for proposed new programs
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www.boardeffect.com 24 #6: Ensure Financial Resources Identifying sources of revenue & balance
Government funding
Funding from foundations
Donations from individuals, corporations
Earned revenue
25. BoardEffect®
www.boardeffect.com 25 Board vs. Staff Roles in Fundraising Board Roles:
Create overall fundraising policies
Organize & participate on fundraising committees
Identify and cultivate donor prospects
Make introductions for staff to follow-up
Ask peers for donations
Make a donation yourself
Express thanks to donors Staff Roles:
Create specific fundraising plans
Support the work of the fundraising committees
Research new and existing donors
Write case materials
Accompany board on solicitation visits
Write proposals
Take care of logistics
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www.boardeffect.com 26 #7: Financial Oversight Review/approve budgets
Stay informed of how/where the organization spends money, without micro-managing
Establish monetary policies
Finance committee
Reviewing revenue/expenses against budget
Policies on expenditures, check-writing, etc.
Investment Policy, Gift Acceptance Policy
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www.boardeffect.com 27 #7: Financial Oversight Ensure financial systems and practices conform to accepted standards
Monitor money management
Able to read/understand monthly financial statements & cash-flow position
Review quarterly Statement of Financial Position
Review the Annual Audit
Audit committee, separate from finance committee
Independent auditor (change every 5 years)
28. BoardEffect®
www.boardeffect.com 28 #8: Board Development Recruit & retain talented board members
Ensure all members are consistently held to account to do their jobs well
High-functioning boards depend on the work of the governance committee
Nominations, search for talented members
Board orientation and training
Assessing board performance
29. BoardEffect®
www.boardeffect.com 29 Self-Assessment Complete the MFRC Board Member Training Self-Assessment
Complete the MFRC Governance Performance Assessment
Identify areas for improvement for you individually and collectively for your board
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www.boardeffect.com 30 #9: Board Self-Governance Ensuring compliance
Three duties of non-profit boards
Legal requirements – local, provincial, national
MOU
MFRC recommendations for best practice
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www.boardeffect.com 31 #9: Board Self-Governance Ensuring transparency
Clear policies
Accessible documentation – board manual, meeting minutes, committee notes (board portals)
Regular communication with stakeholders
Respond to requests from media (as appropriate, in keeping with policies)
32. BoardEffect®
www.boardeffect.com 32 #9: Board Self-Governance Ensuring accountability
Code of ethics
Conflict of interest policy, rigorously enforced
Review disclosures and act on them appropriately
Whistleblower protection policy
Consistent application of personnel policies
Annual audit
Regular reporting to stakeholders
33. BoardEffect®
www.boardeffect.com 33 #10: Enhance Public Standing Board serves as the organization’s link to the community
Representatives of the community being served
“Eyes” and “ears”
Representative of the organization; advocate & educate the public about the organization
Able to give an “elevator speech”
Able to answer media inquiries
34. BoardEffect®
www.boardeffect.com 34 Your Elevator Speech You are in an elevator with Mr. Bigbucks, an important potential donor. You are traveling from the 30th floor to the 1st floor. You have 30 seconds to introduce him to your organization and entice him to learn more. What do you say?
35. BoardEffect®
www.boardeffect.com 35 Recap & Next Steps What did you learn today?
What do you want to learn more about?
What will you do to follow-up?
36. BoardEffect®
www.boardeffect.com 36 Thank You! Dottie Schindlinger, Executive Vice President
BoardEffect®161 Leverington Avenue, Suite 1001Philadelphia, PA 19127, USA
Phone: 215-508-4920 ex. 14Fax: 215-508-4590
Email: dschindlinger@boardeffect.com
Web: www.boardeffect.com