Nonprofit Boards Are Broken for Good – New Film

Nonprofit Boards Are Broken for Good – New Film Reel is a sneak peek at CineVantage’s newest footage of BROKEN FOR GOOD: The Way Charity Works in The United States of America. Honnie Korngold premiered the above clip at NANOE’s Board of Governors’ Convention & Expo. It was received by the audience with applause and rave reviews!

Humorist Mark Twain famously said,

“God first made idiots (that was for practice) then He made…Boards!” 

After spending twenty-five years in nonprofit management (having worked with over 500 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.

VOLUNTEER BOARDS DON’T WORK AND NEVER WILL

Nonprofit Boards Are Broken for Good – New Film Reel

Here’s what your contemporaries have to say:

“There is one thing all boards have in common…they do not function.” ~Peter Drucker

“Effective oversight 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

“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 last 100 years.” ~James Gillies

NANOE President Louis Fawcett Pays NANOE Board Members During 2021 Board of Governors’ Convention & Expo

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.

Let’s start with five functions that boards will never be good at (regardless of how many consultants you pay to “train” them.)  Here’s what boardsmanship IS NOT:

1. Boardsmanship is not Governance
2. Boardsmanship is not Visioning
3. Boardsmanship is not Policy-Making
4. Boardsmanship is not Volunteerism
5. Boardsmanship is not Management

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.) Re-assemble these groups as volunteers (non-board members) who serve you directly. For example, a group of social workers is assembled to serve the program director, or a campaign cabinet comprised of community volunteers is built to advance fundraising. You now have individuals in their sweet spots, who are no longer saddled with arcane tasks.

Boardsmanship is not Management: Board members have no authority over the day-to-day operations of a nonprofit UNLESS there’s a written directive recorded in board meeting minutes with a motion, second and full vote. Members cannot unilaterally exercise power. Nor can committees. Conversely, board members actually need to receive permission from the CEO if they intend to act on behalf of the nonprofit in a manner that could affect daily operations.

I’ll spare you from having to review the expanded fifty-page board member’s manual containing, amongst other things, board retreats, strategic planning responsibilities and multiple committee assignments. The few times boards are able to fool themselves into thinking that they’ve fulfilled the responsibilities outlined above only occur when a strong CEO and multiple staff members spend countless hours doing the work for them. Which is why, in a recent conversation, a CEO shared, “We work hard to support our trustees…I don’t mind doing it…I simply have no idea what
it gets me.”

OK, OK…what is GREAT BOARDSMANSHIP?

Great boards provide two things…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
7. Plus (as needed) (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

Now there’s a board that works. These tasks can be achieved with diligence and excellence. Let’s abandon the failed systems. Let’s give our communities the gift of a Strong CEO. Let’s give our Strong CEO the gift of Board that actually works. Let’s stop burdening our volunteers with an endless series of onerous tasks and then persecute them for not accomplishing them. Let’s end the crazy-making.

Let’s end the insanity. No, really…this is insane, and traditional board models must end now. It hasn’t ever worked, and never will.

Here’s where we’re at…this guy walks up to a Coke machine and puts in four quarters. The machine takes his money but nothing comes out. He bangs on the side of the machine, and then carefully drops more coins into the receptacle. Again…nada, nothing comes out, so he bangs and then kicks the machine, but nothing drops. Third time’s a charm; he picks through a handful of change and, once again, gets NOTHING…so he bangs, he kicks, he rocks it back and forth and finally notices…

…THE BLASTED MACHINE ISN’T EVEN PLUGGED IN.

Please stop putting money in a machine that ain’t got no Coke in it?

Please end boards as we know them and reconfigure them in a way that works.

Nonprofit Boards Are Broken for Good – New Film Reel was first posted at INSIDE CHARITY

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