The Role of the Nonprofit Board: Four Essential Factors for Effective Governance
Sophisticated and experienced NGO/nonprofit board members and CEOs routinely ask me to explain the role of the board. It's not surprising and I'm glad they do. So let me share my four essentials for effective governance.
1. Achievement: The role of the board is to achieve the organization's greater potential as well as its mission.
The role of the board must be crafted specifically for each and every organization. The role is determined based on what you seek to achieve in terms of the mission - the organization's compelling purpose, and the vision - what you imagine to be your organization's greater potential in the next few years. And while the mission is usually set, many boards don't discuss the vision. Taking the time out to create the vision is fundamental to establishing the role of the board.
If you wonder why not simply maintain the organization's status quo, I'd point to the Nonprofit Finance Fund State of the Sector 2012, which shows the extreme financial distress under which so many nonprofits operate. In today's environment, the nonprofits that survive and thrive are the ones whose boards and CEOs are highly strategic and effective in identifying opportunities to pursue their missions in improving communities and the world.
Additionally, if you are passionate about the mission, as one should be when you join a board, then the status quo is not sufficient when you know that the organization's work can be further enhanced or expanded to improve more lives, or do some greater good.
Once the board and the CEO decide on the vision - their three to five year aspirations for the organization - then they can also create the revenue model to achieve success. That is, the most viable mix of funds from foundations, individuals, government sources, fees for services, etc.; the mix varies greatly depending on the type of nonprofit and its programs and services.
With the mission, vision and revenue model set, the board can organize itself for success as follows:
- Board size: the fewest number of board members that will be required
- Board composition: the particular expertise, experience, diversity, and networks that will be needed among board members to maximize success
- Expectations: a clear statement of expectations - that addresses meeting attendance, giving, fundraising, etc. - that is agreed upon among current board members and also shared among new board recruits
- Board structure: committees that are needed to logically organize the work
- Meeting agendas: to focus attention and discussions
- Leadership: the qualifications required to lead for success
- Board development: the board assesses and improves itself on a regular basis
- A transition plan: for the board to transition its composition, leadership, and structure in order to maximize the organization's greatest potential in service to the community