1. 1 Building an Exceptional Board: What Makes Great Boards Great? PNAIS Institutional Leadership Conference October 26, 2008 Nancy R. Axelrod Governance Consultant Founding President, BoardSource

2. 2 Objectives To learn from recent research & actual case studies regarding the key characteristics of exceptional boards. To identify some practical tools to build an exceptional board.

3. 3 Guiding Assumptions Boards can be similar in their excellence and different in their approaches to achieving it. Good boards can always be better. Boards are often reluctant to change. The relationship among the Head, the Board Chair, and the trustees will have an impact on the education, performance, and culture of the board.

4. 4 What behaviors or practices would provide the best evidence of an exceptional board?

5. 5 6 Key Characteristics of Exceptional Boards Stewardship Constructive Partnership Strategic Thinking Continuous Learning & Improvement Intentional Board Practices Culture of Inquiry Sources: Twelve Principles of Governance That Power Exceptional Boards. Washington, DC: BoardSource 2005; “What Makes Great Boards Great” by Jeffrey Sonnenfeld, Harvard Business Review Sept. 2002; The Effective Board of Trustees, by Chait, Holland, and Taylor.

6. 6 Individual Board Member Legal Responsibilities Duty of care. Duty of loyalty. Duty of obedience.

7. 7 Individual Board Member Responsibilities: 3 Board Member Hats Governance Designee Volunteer Other?

8. 8 Variables That Influence Board/Head Relations Consensus on vision, mission, and value of the board. Agreement on mutual roles and expectations Consensus on strategic priorities Trust, candor, and respect Communication in and between meetings Constructive and regular performance assessment process for the Head and Board A climate for the Head to lead and depart successfully Tone at the top

9. 9 3. Boards Make Policy & Staff Implement The Staff The Boards

10. 10 Strategic Thinking Boards Help shape the school’s priorities through the strategic planning process. Allocate time to what matters most to the organization’s future viability and performance. Identify metrics for oversight, monitoring, and adaptation. Knowledge, nimbleness, & trust. Focus their meetings on governing rather than managing.

11. 11 Board Structure Board size Enlisting committees effectively Making meetings matter

12. 12 Pre-Meeting Checklist 1. Key objectives? 2. Desired outcomes? 3. Success metrics? 4. Potential issues? 5. Implications for meeting format?

13. 13 What feedback mechanisms have your board used to periodically reflect on its performance?

14. 14 Board Self-Assessment Approaches Meeting Evaluations Discussion of Critical Incidents Periodic Discussions at Board Meetings Board Member Interviews Mini Board Assessment Formal Board Self-Assessment Others?

15. 15 3 Instructive Case Studies Eckerd American Enron

16. 16 Findings from Recent Governance Research Chait, Taylor, and Holland Jeff Sonnenfeld Lawrence Prybil The Source Principles

17. 17 Sonnenfeld’s Markers of Great Boards Climate of trust and candor Willingness to share information Culture that invites multiple perspectives Commitment to assessment of collective board as well as individual board members Source: “What Makes Great Boards Great”, by Jeffrey Sonnenfeld, Harvard Business Review, Sept. 2002.

18. 18 Chait, Taylor, and Holland Strong boards nurture the development of board members as a group, attending to the board’s collective welfare and sense of cohesiveness. Source: The Effective Board of Trustees

19. 19 Culture of Inquiry Foster a climate of mutual respect and trust. Willingness to respectfully listen to, acknowledge, and solicit different points of view. Encourage dialogue and constructive debate. Gather information from multiple sources of information to make decisions.

20. 20 If a good board is a victory -- not a gift– what do/can we do to strengthen our board?