Board Cafe: Why Boards Don't Govern Part 2

Board Cafe

Why Boards Don't Govern Part 2

By Jan Masaoka and Mike Allison

In the last issue of the Board Café, we looked at the material reasons-such as lack of time, unfamiliarity with the field, lack of independent information, and aversion to conflict-that act against effective board governance. In this second part of Why Boards Don't Govern, we go beyond the idea that "boards need to be trained" and instead propose some practical ways to strengthen governance.

Make sure that, as a board member, you have information about the financial and program performance of the organization that comes from independent sources. Too often boards get all their information from the executive director, and may not realize that the organization is having financial difficulties until too late, or that the organization's programs are keeping up with changes in the world. To obtain independent financial information, make sure that the board (or its Audit/Finance Committee) selects the external auditor, hears the auditor's report, and has at least one meeting per year with the auditor and without staff present. Periodically the board should similarly work with independent program evaluators and outside experts who make their reports directly to the board and the staff.
Use independent management evaluators. In addition to auditors and program evaluators, boards need unbiased sources of information about management as well. One of the most difficult tasks for boards is the evaluation of the CEO. On one hand a board can't interview staff about their opinions, but on the other hand, problems are created when a board obtains all its information from the person being evaluated. An independent evaluator might interview staff, and, for example, if there were several allegations of sexual harassment, would report to the board that such charges exist.
Make governance an explicit part of meetings. Boards should affirm their responsibilities in both support and governance. Board agendas should be clearly marked "Governance Items," and "Supporting Items." Among the qualities we should seek and reward in board members are critical thought, discernment, questioning attitude. When someone raises an objection or concern, or votes against the majority, the board president should make a point of going up to that person and expressing appreciation for the seriousness and courage to make the point.
Encourage dissent, debate, and questions. As board chair, make sure that you say at each meeting, "Marc, thank you for bringing up the risks involved with this idea," or "Well, we may all be in agreement . . . but Crystal, could you serve as our devil's advocate and give a strong argument for the other side?"
Recruit governors. When recruiting, boards should seek members who are good governors as well as those who are good supporters: people who know clients as well as people who know philanthropists; people familiar with nonprofit management as well as those familiar with business; operational volunteers as well as fundraising volunteers; people who ask critical questions as well as people who cheer. A diverse board such as this will keep the agency rooted in the world it serves as well as in the world in which it raises funds. In many cases, governors and supporters may turn out to be the same people once governing responsibilities are recognized and valued as much as supporting responsibilities.

Original publication date: 11/19/2004