Non-Profit Board of Directors

1. Non-Profit Board of Directors Development of Exceptional Boards Ginny Wood Nelson M.Ed, LPC Organization Development and Training

2. Introductions Please write one to three learning objectives you have for the training today.

3. What are the basic responsibilities of nonprofit boards? • Determine mission and purpose. It is the board's responsibility to create and review a statement of mission and purpose that articulates the organization's goals, means, and primary constituents served. • Select the chief executive. Boards must reach consensus on the chief executive's responsibilities and undertake a careful search to find the most qualified individual for the position. • Support and evaluate the chief executive. The board should ensure that the chief executive has the moral and professional support he or she needs to further the goals of the organization. • Ensure effective planning. Boards must actively participate in an overall planning process and assist in implementing and monitoring the plan's goals.

4. Board of Directors Responsibilities • Monitor, and strengthen programs and services. The board's responsibility is to determine which programs are consistent with the organization's mission and monitor their effectiveness. • Ensure adequate financial resources. One of the board's foremost responsibilities is to secure adequate resources for the organization to fulfill its mission. • Protect assets and provide proper financial oversight. The board must assist in developing the annual budget and ensuring that proper financial controls are in place. • Build a competent board. All boards have a responsibility to articulate prerequisites for candidates, orient new members, and periodically and comprehensively evaluate their own performance.

5. Board of Directors Responsibilities • Ensure legal and ethical integrity. The board is ultimately responsible for adherence to legal standards and ethical norms. • Enhance the organization's public standing. The board should clearly articulate the organization's mission, accomplishments, and goals to the public and garner support from the community. • References • Richard T. Ingram, Ten Basic Responsibilities of Nonprofit Boards, Second Edition (BoardSource 2009).

6. Board and Staff Responsibilities • To help convey who does what regarding board and staff, the following activity is suggested to be done by board, staff or jointly. • Ultimately, the responsibility for the various activities depends very much on the life-cycle of the organization -- young organizations often have working Boards that are involved in day-to-day activities, while older organizations have Boards that attend exclusively to top-level policies and plans.

7. Activity: Who is responsible for what? • Please refer to the handout, “Board and Staff Responsibilities” • The activities source is “Free Management Library” • The original author of this document is unknown. • Please take the handout and cover the last column with another piece of blank white paper. • In each horizontal column that ends with your blank paper, put the following answers you believe to be correct as to who is responsible for each task described. Use answers as follows: • Board • Staff • Joint

8. Board Tips Develop clear roles and responsibilities for board members.

9. Activity: Evaluating your Board of Directors • Please refer to “Checklist to evaluate a non-profit board of directors.” • The Following is an activity is to help each of you to evaluate the functioning of your board. • Before you begin please read the “Ratings” and “Checklist Responses” explanation. • Please individually fill in the checklist box that you believe best fits your organization currently. • After you have filled in all the boxes you may meet with others in your organization to compare answers.

10. Board of Directors: Job Descriptions Let’s take a look at the hand out “ Job Descriptions for Board of Director Roles.”

11. Board of Directors: Job Descriptions • Do you have job descriptions for your Board of Directors? • Do you have specific job descriptions for the roles of: • Board Chair • Vice Chair • Committee Chair • Board Member • Board Secretary • Board Treasurer

12. Orientation of Board Members • Let’s start at the beginning…… • Please refer to the Handout “Sample Agenda for Board Training Session” • Optimally this training should occur before the board member attends their first board meeting.

13. Creating a Board Orientation Manual: What should be in it? • the organization’s mission statement; • the history of the organization; • a description of the board’s structure and operations, including meeting dates and job descriptions; • a copy of the bylaws; • a manual containing all framework, self-governance, operational, and advocacy policies; the organization’s strategic plan; • financial information, including the organization’s budget, audit, investments, insurance and funding information; • a description of the board’s committees and their terms of reference; and the names and contact information of each director.

14. Board Meetings: • One of the most effective ways to accomplish productive meetings and strong governance is to carefully design an agenda and then closely facilitate to that agenda. • Agendas should include • 1) strategic topics to address in that meeting, 2) specifically how each topic is to be addressed in that meeting (for example, to make a decision, assign further research, etc.), • 3) specific times to address each topic. 

15. Board Tips Recruit new members strategically to find the right people to meet your organization’s needs. Remember, recruitment is an ongoing process, and not just something to think about when vacancies arise.

16. Board Meetings and Minutes • Please refer to your handout “Conducting Effective Board Meetings” • Included is a sample of Board minutes. • How do these compare to what you are currently doing? • How could you meetings and minutes be improved?

17. Board Tips Host an annual retreat for board members. You may consider involving staff as well.

18. Minutes are the legal record of what happened at the meeting • Minutes should include: •  List, by name, of whom attended the meeting. Note if anyone left or arrived during the meeting; • A copy of the agenda and any other material that the board members received either before or during the meeting; • A summary of the members’ discussions. The summary should document all of the various points considered by the board including references to any opposition; • The proper wording of any motions, resolutions, etc.; • A record of the vote on each item by the number of “ayes” and “nays.” List by name the members that voted in the minority; and • The time the meeting began and adjourned.

19. Board Committees Please refer to the handout: “Advantages and Potential Disadvantages of Nonprofit Board Committees.”

20. When to create Committees • Create committees when it's apparent that issues are too complex and/or numerous to be handled by the entire board. • For ongoing, major activities establish standing committees; for short-term activities, establish ad hoc committees that cease when the activities are completed. Standing committees should be included in the by-laws.

21. What are typical Board Committees? • Executive • Finance • Personnel • Fundraising • Board Development/Nominating

22. When establishing a Committee • The committee must has a specific charter or set of tasks to address, and ensure board members understand the committee's charge. • Board members should not be on more than two committees. • In each board meeting, have each committee chair report the committee's work since the past board meeting.

23. Board Tips Determine the types of skills you need on your board. Consider members who have skills in accounting, legal matters, property management or policy areas.

24. Board and Staff Relations How would you describe the relationship between your board or directors and staff?

25. Common Challenges For Board and Staff • Unclear boundaries between Staff roles and Board Roles. • Over involvement of CEO or Executive Director in Board decisions. • Under involvement of Board in fundraising and evaluation of overall strategic direction of the organization. • Board members becoming involved in personnel issues other than the CEO or Executive Director.

26. Board Governance What does the research say about current practices of non-profit organizations?

27. Concerns over Board Effectiveness • The staff of the U.S. Senate Finance Committee suggested a variety of legislative and regulatory measures to correct perceived problems in the governance and performance of U.S. charitable institutions. • Underlying the Finance Committee’s concerns was a conviction that many nonprofit organizations lack effective financial and programmatic accountability procedures and that nonprofit boards are not adequately performing their oversight responsibilities.

28. John Hopkins Research on Nonprofit Governance and Accountability Responding to concerns about nonprofit governance and accountability surfaced in a discussion draft issued by the Senate Finance Committee, the Johns Hopkins Nonprofit Listening Post Project conducted a survey, or Sounding, of its nationwide sample of nonprofit organizations in five key fields (children and family services, elderly housing and services, community and economic development, theaters, and museums) to examine the governance and accountability practices of the nation’s nonprofit organizations

29. Key findings from this survey included the following: • Board roles. The boards of overwhelming majorities • (85-90 percent) of the nonprofit organizations surveyed • are highly or significantly involved in the key • strategic oversight functions that nonprofit boards are • expected to perform. These include: • Setting organizational missions (93 percent); • Setting the chief executive’s compensation (88 percent); • Establishing and reviewing organizational budgets • and finances (87 percent); • Setting organizational objectives (87 percent); Reviewing auditing and accounting policies and practices(83 percent); and • Approving significant financial transactions (81 percent).

30. 2) Financial disclosure. The overwhelming majority • (97 percent) of sampled organizations have undergone an independent audit within the past two years and comparable proportions (95 percent) regularly distribute their financial reports to their boards.

31. 3) Ethics protections. The overwhelming majority of responding organizations • already have other policies and procedures in place to promote accountability and ethical behavior. This includes: • Internal controls on finances and financial accounting • (98 percent); • Records rétention policies (84 percent); • Conflict of interest policies (83 percent); • Travel expense policies (81 percent); • Compliance programs for regulation (81 percent); and • Codes of ethics for board and staff (73 percent). • Even among smaller organizations, a majority have • such policies in place.

32. 4) Best-practice standards • Nearly two-thirds of the organizations surveyed already take part in best-practice accreditation programs, and nearly 60 percent of these participate in more than one such program. • Of those organizations that do not participate in formal best-practice accreditation programs, most report following an internally developed set of standards.

33. 5) Organizational changes • Nearly one in three organizations (29 percent) reported making some material change in their structure, programs, funding, or mission over the previous two years. • However, most of these (54 percent) reported notifying the Internal Revenue Service of this change. And those that did not report typically experienced less significant changes (e.g., changes in funding sources).

34. 6) Nonprofit awareness • Most nonprofit boards (80 percent) are at least “somewhat knowledgeable” about nonprofit laws at both federal and state levels, and two-thirds reported having discussed the federal Sarbanes-Oxley law. • Only 36 percent of the organizations reported having held at least brief board discussions of the Senate Finance Committee staff proposals for increased regulation of nonprofit governance. • The full Communiqué on Nonprofit Governance and Accountability is available for downloading at:www.jhu.edu/listeningpost

35. Online Resources for Board Development • Board Caféwww.boardcafe.orgBoard Sourcewww.boardsource.orgBoardnet USAwww.boardnetusa.orgCenter for Nonprofit Management – Southern Californiawww.cnmsocal.orgThe Effective Board Member's Orientation Manualwww.ginsler.com/documents/bdman.pdfFree Management Librarywww.mapnp.org/library/index.htmlNonprofit Geniewww.genie.org • Nonprofit Nuts & Boltswww.nutsbolts.comNonprofit Virtual Librarywww.lib.msu.edu/harris23/grants/znonprof.htm#bp • Serving on the Board of a Not-for-Profit Organization: A Guide for New Directorswww.grantthornton.com/downloads/14655_14655.pdfMinnesota Council of Non-Profits • http://www.mncn.org/ • Free Management Library • http://managementhelp.org

36. Let’s take one more look at ourselves! • Activity: • Please refer to: A Quick Assessment of the Five Dysfunctions of Your Board

37. Learning Objectives Were your learning objectives met? If so, how? If not, what was missing?

38. For further questions or comments please contact: Ginny Wood Nelson ginnynelson5@msn.com 605-381-0659