1. Basic Responsibilities of Nonprofit Boards Thomas P. Holland, Ph.D., Professor Institute for Nonprofit Organizations University of Georgia Athens, Ga. 30602 706-542-5463

2. Board’s f ocus shifts as organization matures Organizations and their boards go through developmental stages, moving from volunteers doing everything to governing -- setting policies and planning for future. Culture lag complicates this for board and staff Importance of clear division of roles Board members may also be volunteers, but keep the hats distinguished Reinforce division of responsibilities with staff and operational volunteers

3. 1. Determine and Follow the Organization’s Mission and Purpose The board is responsible for defining the organization’s mission and what it intends to accomplish. Then it must adhere to these commitments in all its work. Mission may shift in response to new conditions –For example, another organization now provides health services. Questions to ask: –1. How clear are we about our mission and purpose? –2. How well have we communicated that to all the organization’s stakeholders? –3. How well have we followed that in all our work?

4. What is a Mission Statement? A brief summary of the purpose for which the organization exists, its reason for being. It specifies the ends sought, not the means for getting there. It identifies what the organization aspires to be and to attain. It provides distinctions for this organization and boundaries for it. It allows people to understand quickly what the organization stands for, why it is important.

5. A good mission statement is Brief, succinct (no more than a couple of lines) Focused on the main purpose for which the organization exists Inspiring, motivating, calling us to a visionary purpose Memorable, easy to explain and remember Serves as the foundation for setting goals and priorities

6. 2. Select and Oversee the Chief Executive The board must select a competent CEO, set clear expectations and limits for performance, and provide regular feedback to that person. Questions to ask: –1. What are our specific expectations of our CEO? What are that person’s expectations of the board? –2. How well do those expectations address our mission? –3. How do responsibilities of the CEO and those of the board differ? How do they support each other? –4. How well are we providing guidance and feedback on performance to that person?

7. Board-Executive Interactions The board has only one employee: the executive. Everybody else works for that person, not for the board. The board should set clear goals and expectations for the executive each year, and then use those goals for evaluations, feedback, and new goals at conclusion of year. The board must communicate its concerns with only one voice. Everything should be channeled through the board chair to the executive.

8. 3. Provide Proper Financial Oversight The board develops and approves annual budgets. Board reviews clear and accurate financial reports regularly. It obtains and reviews independent, external audits annually. Questions to ask: –1. How well do we monitor our financial activity compared with what was budgeted? –2. What internal controls are in place and how well are they working? –3. What is our plan to ensure the long-term financial health of the organization?

9. 4. Ensure Adequate Resources An organization can only be effective if it has enough resources to meet its purposes. Providing those resources is a basic responsibility of the board. Every member sets example by own giving and engagement with other fundraising activities. Questions to ask: –1. How can each board member best help the organization in fundraising? –2. How well are we presenting the organization to current and potential supporters? –3. What could we do to improve our own giving and the organization’s fundraising efforts?

10. 5. Maintain Accountability The board must ensure the legal and ethical integrity of the organization. Conducts its work in orderly fashion Avoids conflicts of interest How well are we –1. Adhering to the organization’s by-laws in all our work? –2. Conforming to state, federal (I.R.S.) laws? –3. Establishing and following policies on ethical behavior, conflicts of interest, confidentiality, nepotism, expenditures? –4. Ensuring fair personnel policies and rules? –5. Publishing accurate annual reports on programs and services, financial performance?

11. 6. Set Strategic Goals and Follow Them in All its Work The board thinks strategically, translates mission into specific strategic goals that can be accomplished and measured. It organizes itself to pursue these goals, in collaboration with the CEO, with clear charges for –Officers –Committees –Advisory groups It monitors results and adjusts efforts accordingly. Question: how well is this board doing those things?

12. 7. Enhance the Organization’s Public Standing The board serves as the link between the organization and its constituencies, including consumers or members, community and government leaders, the media, and the public. It formulates and follows a clear communications strategy for the organization. It speaks with one voice on goals, commitments, accomplishments, uses of funds, and contributions to the public good. No member speaks for the board other than designated ones or gives any messages apart from decisions of the group. Question: How well are we doing these things?

13. 8. Recruit and Orient New Members and Assess Board Performance The board identifies its needs in terms of skills, experience, influence, demographic representation, and other characteristics. It provides newcomers with adequate orientation to ensure effective participation. It evaluates the group’s performance periodically. It reflects on feedback to guide subsequent efforts to improve board performance. Uses term limits to bring in new perspectives. Provides regular board education sessions. Question: How well are we doing these things?

14. Recruiting new Board Members Identify the skills you will need to accomplish the organization’s goals Inventory the skills present on the board Identify the gaps, the needed skills Target recruitment efforts on finding people with those skills Explain why you are seeking their input and see what person is interested in doing Match newcomer with appropriate tasks

15. Bringing Newcomers onto Board Prepare job description for board member. Orient newcomers to the organization and board. Assign a mentor for each one. Match newcomer with tasks that interest him/her. Monitor performance and give constructive feedback. Conduct periodic assessments of individual and group performance. Fill gaps in skills through board education and further recruitment.

16. Items for a Board Member Job Description Attend meetings regularly and contribute actively to the board’s work, including coming prepared to meetings and participating in committees as needed. Attend the board’s annual retreat and contribute actively to evaluating the board’s work over the past year, setting goals for the coming year, and election of board officers. Approve the organization’s mission and review its own performance and that of the Executive in achieving it. Monitor the changing environment and develop strategic plans with the Executive to be responsive to changes. Review and approve the organization’s funding goals, plans, and annual budget

17. More items for Job Description Contribute to the development of policies to guide the organization’s work. Monitor and evaluate the Executive’s performance in managing the organization and provide feedback to improve it. Set and approve appropriate compensation and benefit policies and practices. Set goals and priorities for the organization for the coming year. Ensure they guide all work. Ensure that the organization has the skills among its employees to work effectively toward the goals.

18. Still more items Monitor income and expenses and keep informed about the organization’s financial condition. Ensure that a conflict of interest policy is established and followed diligently by the board and staff. Ensure that the board and organization complies with all relevant laws. Contribute financially to the organization annually and in proportion to one’s means; assist in solicitations. Annually review the board’s performance and take steps to improve it. Bring in new board members who contribute knowledge, skills, and contacts that contribute to accomplishing the organization’s goals.

19. Orienting Newcomers Describe the organization’s mission, purposes, goals for the coming year. Give some highlights of the organization’s history, key milestones. Describe the organization’s programs and services Tell about its consumers and staff. Review its budget, sources of income, amounts in each category, major funders

20. More on Orientation Explain the organization’s fundraising goals, activities, expectations of board involvement Describe the organization’s strategic plan and specific goals. Show the organization’s staff structure Explain its partnerships, collaborators Review the board member job description and basic responsibilities

21. More on Orientation Identify the board’s by-laws, structure, officers, committees, members, terms of service, calendar of meetings, conflict of interest policy Review the board’s key roles and responsibilities –Set organizational goals and directions –Ensure necessary resources, fundraising –Provide oversight –Ensure compliance with laws –Monitor and evaluate performance of organization and board

22. More on Orientation Act in accordance with legal standards –Duty of care: stay informed, ask questions –Duty of loyalty: show undivided allegiance to organization’s well-being –Duty of obedience: ensure all activities contribute to organization’s mission Active participation in board’s work Participate in fundraising activities –Make personal contributions annually –Open doors to potential donors –Participate in fundraising events

23. Board Assessments Conduct short assessments at end of each meeting and use feedback to improve next ones. Conduct longer assessments yearly, and use findings to plan for –Group’s goals for the coming year –Organization’s goals for coming year –Board education sessions –New member recruitment

24. Group Assessments Board should set goals for improving its own group performance at beginning of each year. Pay attention to those goals in all board work. At end of year, print out the goals the board set for itself at beginning of year. Ask members to rate how well the board as a group performed in each area. Ask for suggestions on ways to improve group performance in coming year. Use findings to improve meetings.

25. Individual Assessments Start with list of statements in job description. Ask members to do self-ratings on each one: –How well did I perform in this area over past year? –What steps will I take to improve my own performance in the coming year? Committee on Board Development uses findings to –Provide coaching for individuals –Plan goals for the board for coming year –Prepare board education sessions –Target new member recruitment

26. Exercise Mentally review the basic roles and responsibilities of a board, assessing how well your board performs in each area. Identify an area in which your board could improve its performance. Describe what your board would look like if someone observed it performing well in that area. Specify some action steps you can take to engage your board in working on that area.