How to Strengthen the Performance of your Board

1. How to Strengthen the Performance of your Board Thomas P. Holland, Ph.D. Professor and Director, Institute for Nonprofit Organizations The University of Georgia Athens, GA

2. 1.Management defines problems and solutions; board listens and approves 2. Board structure parallels administrative functions 3. Meetings driven by standard procedures, emphasizing reports 4. Board is collection of stars, talented experts 1. Board and management identify key issues together 2. Board structure is based on strategic priorities 3. Meetings are goal-driven, emphasizing strategy and learning 4. Board is strong constellationwith growing teamwork Old vs. New Approaches

3. Effective Boards • Keep their attention focused on strategic priorities, not operations • Identify and work together on what matters most to the long-term future of organization • Understand trends and changes in the environment and what they mean for the organization and its future • Think together out loud about issues before they become problems, preventing fire-fighting • Develop means for monitoring organizational performance in key areas

4. Practices of Effective Boards • 1. Mission and Values • develop and sustain strong, shared understanding of the organization’s ends, purposes, mission and values • make active use of them in the board’s work • 2. Planning and Priority Setting • identify strategic directions • set clear priorities and criteria • stick to them in the board’s work

5. More Effective Practices • 3. Teamwork • grow from collection of individual stars into a strong constellation • develop group inclusiveness and cohesion • use feedback to strengthen teamwork skills • 4. Board Education • continue to learn about the organization, its environment, and strategic issues • evaluate the board’s own work periodically • strengthen the group’s skills in problem-analysis and in leadership

6. Strategy vs. Operations • Most board members (like most people) come from positions of responsibility for operational decisions. That’s familiar territory for us. • Most board members (like most people) have little understanding of or experience with governance, strategic thinking, or planning for the future. • As a result, board meetings slide into familiar territory-- operations. • Senior staff unwittingly foster such slides.

7. Governance • Governance isn’t just “big management” • The board is responsible for • identifying the mission, purposes, ends of the organization who it serves and why • translating them into strategies that lead to successful accomplishment of those ends • monitoring managers’ implementation management involves means to the ends • ensuring that the organization has resources to carry out its purposes • adding value to the organization

8. Group Culture of the Board • Culture: that set of unspoken habits, norms, and practices that guide how a group goes about doing its work • Group culture develops over time, emerging from the work habits of founders • It typically focuses on operational issues • Newcomers are socialized into cultural assumptions about how this group does its work • These assumptions and habits are resistant to change, continuing to guide work even when outside conditions change • Staff continue supplying operational data

9. Learning new ways to do the board’s work • Move from old habits to new, more effective practices. Old assumptions become choices among alternatives. • Identify options, new possibilities for doing the work of the group. • Board must stay focused on goals and ends, not operations and means. • Experiment with new practices, substituting better approaches for old ones. • Learn by reflecting on experiences together. • Demonstrate accountability: the board should model the behaviors it desires in others.

10. How do we get started? • Take advantage of common situations to reflect on roles of the board in them and learn from its experiences, such as • departure of the CEO, board chair, or any senior person • completion of a campaign • success or failure in achieving a goal • attendance shortfalls or complaints about board or staff meetings • change in relationship with a donor, funding source, partner organization, consumers • any event that has major impact on organization

11. Questions for group reflection • What were the major factors that led up to this situation? • What were our goals, assumptions, and actions going into it? • In what ways did we influence the sequence of events? • What could we have done differently to make the outcome more positive? • Lessons we should take into the future?

12. CEO is often the introducer of change • Many boards comfortable with status quo • Someone must raise ambitions and stir discontent: “We can do better than this.” • Allies among board leaders are vital. • Change always involves anxiety. Don’t avoid it or let others sidetrack efforts. • Offer examples of how other boards do their work and add greater value to organization. • Keep at it. Change takes time.

13. Make Learning an Expectation • Initiate regular evaluative discussions as the last 15 minutes of every meeting: • Did we work on the most important issues? • What went well? What didn’t? • What should we do differently next time to be more productive in our future meetings? • Carry out more extensive assessments of the group’s performance annually. • Discuss findings in a retreat, drawing lessons and group goals for the coming year. • Demonstrate how accountability works.

14. Restructure Board’s Committees so form follows function • Traditional committee structure follows management divisions, inviting micro-managing operations & undermining CEO • Instead, focus on strategic goals • Identify what board will add to staff work • Create ad hoc work groups focusing on each goal • Groups bring options & best ideas to board • Group ends when goal accomplished

15. Screen the Meeting AgendaYou’re not ready for air time until you have clearly answered each question: • What is the purpose of this meeting? of this agenda item? • What specific things do we want to accomplish? • How will that move us toward a major goal that will strengthen the organization in the future? • Are the questions sharply defined and understood? • Have we provided members appropriate information needed to address questions? • How will we assess our success?

16. Use Alternative Meeting Formatsaccording to goals for each meeting (again, form follows function) • Moderated discussions or educational sessions • Small group brainstorming and discussions • Thematic meetings focused on a single topic of overarching importance (Robert’s Rules useful in very young or disorderly groups, but less so later)

17. Strengthen TEAMWORK • Most boards are composed of individual stars • Go beyond to focus on the constellation • Strengthen group performance by • screening nominees for teamwork skills • orientation and mentoring • setting goals for the group itself • speaking with one voice • ongoing board education • regular evaluations and feedback • taking time to reflect and learn from experience and feedback

18. Information is essential to learning, but most board members experience • Data overload • Inappropriate levels of detail • Administrative vs. governance perspective • Lack of strategic relevance • Unresponsive to members’ time constraints • Lack of interpretive context

19. Information must be infused with Meaning • Governance information, not management • Strategic, not operational • Selective, not exhaustive • Normative, comparisons over time and with peers • Senior staff should guide and support such distinctions by the information provided to the board.

20. Sample DashBoard Dialsabout Organizational Performance • Percent of revenue by sources, over time • Expenses by major categories or priorities • Percent of consumers completing service • Discounts as percent of price charged • Percent of professional staff with highest degree • Deferred maintenance/ replacement value

21. One Organization’s Dashboard

22. Another board’s Dashboard focuses on • Program Mix: Are the organization’s activities focused on our priorities? • Program Quality: Are they being done well? • Resource Acquisition: Are we bringing in sufficient resources to meet the budget? • Resource Management: Are we keeping our budget balanced and in line with priorities?

23. That Board’s Dials, Part 1 • Program Mix: Are the organization’s activities focused on our priorities? • Staff time allocation, % by program, quarterly • Expenditures by program, %, quarterly • Program Quality: Are they being done well? • Feedback from those receiving program efforts • donors, sponsors, granting foundations • community organizations, volunteers, chapters, • consumers and staff

24. That Board’s Dials, Part 2 • Resource Acquisition: Are we bringing in sufficient resources to meet the budget? • Income by source • amount and % of board members giving annually • income by other sources, over time (quarterly, annually) • compared with peer organizations • Are we diversifying our sources of income? • amounts by sources over time • new sources, amounts • comparisons with peer organizations

25. That Board’s Dials, Part 3 • Resource Management: Are we keeping our budget balanced and in line with priorities? • Set tolerance limits (plus or minus 10%) for each line or category • Report total expenditures by program and priority • Comparisons over time (quarterly, annually, over past 5 years) • Justifications for exceeding limits

26. Additional Qualitative Information • Views of key constituencies and stakeholders • Informal views and concerns of Executive and staff • Information from experts inside and outside

27. Task: Invite your Board to Design its own Dashboard • What are our top priorities for this organization? • What key, selective aspects of the organization do we want to monitor? • What are the best ways to display each? • What comparisons would be most informative? (over time, with peers) • When do we want to receive reports? • What will we do when exceptions occur?

28. Assess how well the board itself is performing regarding • Clarity of mission and purpose • Staying focused on important strategic issues • Evaluation and support of the Executive • Raising funds and managing financial resources • Involvement in planning for the future • Orientations for new members • Board-staff relationships • Communications with constituencies • Risk management • Board operations, use of members’ time and talents

29. Task: Board creates own self-assessment tool • Begin with clarifying expectations of the team, both as a group and individual members • Identify goals for group for the coming year • List all expectations and goals in a series of statements • Add a response format to each statement: How well did we do in this area in this meeting? over the past year? • Provide space for comments & suggestions

30. Sustaining Attention to Board Performance • Expand duties of Nominating Committee to include ongoing board development • This group oversees regular evaluations and uses findings to • plan educational events for whole board • identify learning opportunities for individuals • help chairperson improve meeting procedures • refine nomination criteria • guide continuous improvement of board work

31. Continuous Improvement is a major part of the board’s ongoing responsibility • Identify and announce annual goals publicly • Keep them posted in conspicuous places • Remind group about them at every meeting • Link every agenda item to a goal • Solicit feedback periodically from team members and constituencies on progress • Review performance at end of each year • Set goals for improvement in coming year

32. Summary • Focus the group’s attention on those few, key issues that really matter most to the mission and goals of the organization as it goes into the future • Set priorities for the group’s attention and then keep meetings focused on them • Specify criteria for monitoring progress • Use feedback to strengthen teamwork • Work on priorities through better committee structures and meeting formats

33. About the UGA Institute for Nonprofit Organizations web site: http://www.uga.edu/nonprofit telephone 706-542-5463 e-mail tholland@uga.edu About Holland, Blackmon & Associates web site: http://www.hollandblackmon.org telephone: 706-548-4115 For further information