Insights That Will Drive Your Year-End GivingNovember 5, 2020
Today’s Talk with Jared FentonNovember 10, 2020
Nonprofit Volunteer Boards Have to Go is industry renowned author Jimmy LaRose’s take on what every charitable executive secretly knows…NONPROFIT BOARDS DON’T WORK AND NEVER WILL.
“God first made idiots (that was for practice) then He made boards.” ~Mark Twain
After spending twenty-five years in nonprofit management (having worked with over 700 boards) I’ve determined, broadly speaking, there are three types of boards…
…mediocre ones, useless ones, and really bad ones.
It’s not the fault of the individual volunteer (most of the time), it’s simply a flawed business model that never had a chance to succeed. Here’s what your contemporaries have to say:
“Effective governance by a board of trustees is a relatively rare and unnatural act. Trustees are often little more than high-powered, well-intentioned people engaged in low-level activities.” ~Thomas Holland
“There is one thing all boards have in common…they do not function.” ~Peter Drucker
“Ninety-five percent (of boards) are not doing what they are legally, morally, and ethically supposed to do.” ~Harold Geneen
“Board members are usually intelligent and experienced persons as individuals. Yet boards, as groups, are mediocre. Boards tend to be, in fact, incompetent groups of competent individuals.” ~John Carver
“Boards have been largely irrelevant throughout most of the twentieth century.” ~James Gillies
Nonprofit Volunteer Boards Have to Go
By and large, the vast majority of volunteer board members do not have the time, experience, or skills necessary to manage a good CEO. So inevitably, instead of the members managing the CEO, the CEO is tasked with the annoying responsibility of managing the board. It’s a complete waste of time and effort.
By the way, great leaders are not “managed” in the first place! Furthermore, it doesn’t matter how big or small the organization may be (e.g. major universities vs. the local animal rescue) boards don’t work and never will because…THEY’RE MADE UP OF VOLUNTEERS WHO HAVE A LIMITED KNOWLEDGE OF NONPROFIT ENTERPRISE.
So here’s what civil society has decided is the best way to grow a nonprofit enterprise. Let’s saddle a CEO with a group of disengaged volunteers, who may or may not regularly gather to share their opinions. Each board member is equal to the others and gets a full hearing, regardless of their competencies. This group is all-powerful and is accountable TO NO ONE.
It’s unnatural. It’s never worked. It never will.
Simply put, THE EMPEROR HAS NO CLOTHES and no one is discussing effective alternatives. How is it that the oversight of our sector (upon which society relies for safety, health, and provision) could be left to the mediocrity of disengaged volunteers?
But Jimmy, what about those successful nonprofits? Don’t they have great boards?
Don’t kid yourself! Successful nonprofits are not run by boards; they’re run by strong CEOs, in spite of the board. Another way to look at it goes something like this…what would GE, Apple, or Amazon look like today if they had been managed by a disengaged volunteer board of directors?
Here’s What Boardsmanship IS NOT!
I’ve figured this mess out. First, let me tell you what good boardsmanship IS NOT:
Boardsmanship IS NOT Governance.
Don’t kid yourselves. UNPAID BOARD MEMBERS DON’T GOVERN. Actual governance occurs when a person (with a full-time salary) supported by various paid staff (the formation of a government) is empowered to perform the daily tasks of
decision-making and oversight. Strong CEOs GOVERN!
Boardsmanship IS NOT Visioning.
VISION is the way MISSION is achieved and is never the responsibility of the board because the board isn’t being paid to accomplish it. STRONG CEOs ARE TRUSTED TO CREATE VISION. (I agree that board members hold their compensated
leader accountable to achieve MISSION.) Here’s what you do. Hire a strong CEO who has a history of designing VISION that accomplishes MISSION in ways you never dreamed possible. Believe me, strong CEOs are already doing it their way even if they feel the need to label their activities as “BOARD VISION.”
Boardsmanship IS NOT Policy-Making.
Hire a CEO whose depth of experience and formal education has already equipped them as a management expert. The right CEO has been properly trained to oversee the creation of policies that work. Board Members never write policy
anyway. Someone else does the heavy-lifting and they rubber stamp it.
Boardsmanship IS NOT Volunteerism.
Eliminate the special events committee. Eliminate the fundraising committee. Eliminate the public relations committee. Eliminate the strategic planning committee. (Here’s a good rule of thumb – remove everything from your by-laws that’s not
related to IRS compliance.)
OK, OK…What is Great Boardsmanship?
Great boards do two things. They provide ADVICE & ACCOUNTABILITY!
The STRONG CEO is named chair of the nominations committee and fills these SIX POSITIONS (yes, you only need six [plus]):
1. Business Expert (Chair) Entrepreneur
2. Program Expert (Secretary) Specific
3. Finance Expert (Treasurer) Accountant
4. Legal Expert (Member) Lawyer
5. Communications Expert (Member) PR/Marketer
6. Nonprofit Expert (Member) Consultant
THAT’S IT! (add other experts as needed eg. personnel, etc.) However, don’t forget, working group theory states that any “working group” with more than seven people is no longer a group that works!
Here are their ten ADVICE & ACCOUNTABILITY functions:
1. Comply with IRS Regulations
2. Hire strong Chief Executive Officer
3. Approve Meeting Agenda
4. Approve and Amend By-Laws
5. Choose and Review Independent Financial Audit (annual)
6. Choose and Review Independent Program Audit (annual)
7. Evaluate strong Chief Executive Officer
8. Attend Three Meetings Per Year with Recorded Minutes
9. Support the CEOs Vision (not the boards vision)
10. Provide CEO their expert advice
Strong CEOs Are The Key To Building Capacity (NOT STRONG BOARDS)
After years of applying countless board theories to real world nonprofits, one could suppose that John Carver came close with his model, but ultimately failed nonprofit enterprise. Even Carver saddled the strong CEO with responsibilities to volunteers who never should have been in authority in the first place. Unfortunately, the data indicates that boards who embraced the Carver Model are as useless today as they were thirty years ago.
Allow me to cite, yet again, our collaboration with Clemson University. NDI, in partnership with Clemson, performed a study using a clinical sample of 470 executive directors who participated in a 90 question survey regarding capacity building. The focus of the study was to investigate the relationship between the efficacy of capacity building and the intentions of the organization’s leadership to embark upon capacity building. This was a necessary behavioral study, in that previous works failed to show any empirical data regarding the relationship between a nonprofit’s ABILITY TO BUILD CAPACITY and the actual return on the investment made in time, human resource, and monies spent on capacity
Here’s what we discovered:
Organizations that were successful at demonstrating a measurable return-on-investment in capacity building were led by extraordinary executives (CEOs/Presidents/Executive Directors). These executives possessed specific attitudes, beliefs, and skills sets. They also took personal responsibility for project implementation and outcomes.
Here’s what successful CEOs accomplished:
a. They built more capacity over a five year period than those nonprofits who indicated they stagnated or declined during the same time period.
b. They grew budget, programs & donors, despite the recession.
c. They grew their nonprofits regardless of the size or involvement of their board.
d. They externalized the mission of their organization for the purpose of fundraising.
e. They developed board members who evaluated the chief executive and promoted the goals and values of the CEO.
The greatest contribution we can make to the nonprofit sector is to do whatever it takes to attract, pay and empower great CEOs.
In closing, please re-read this article. Let’s end the insanity.
Your Champion In All This,
Nonprofit Volunteer Boards Have to Go was first posted at INSIDE CHARITY
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