Board
governance
September 22, 2022
PMAP 3210: Introduction to Nonprofits
Andrew Young School of Policy Studies
Plan for today
Plan for today
What do boards do?
Plan for today
What do boards do?
What makes a good board?
What do
boards do?
Typical nonprofit structure
What is a board?
What is a board?
A group of volunteers
who help direct the nonprofit
What is a board?
A group of volunteers
who help direct the nonprofit
The board sets the strategic
vision for the nonprofit
Requirements
Legal requirements for being
a nonprofit board member:
Requirements
Legal requirements for being
a nonprofit board member:
Be 18+ years old
Requirements
Legal requirements for being
a nonprofit board member:
Be 18+ years old
That's it.
Board member legal duties
Board member legal duties
Duty of Care
Due diligence Monitor finances Supervise management
Board member legal duties
Duty of Care
Due diligence Monitor finances Supervise management
Duty of Loyalty
Put nonprofit's interests above own Avoid conflicts of interest
Board member legal duties
Duty of Care
Due diligence Monitor finances Supervise management
Duty of Loyalty
Put nonprofit's interests above own Avoid conflicts of interest
Duty of Obedience
Keep nonprofit in line with law and mission Avoid mission drift
Board responsibilities
Board responsibilities
Personnel
Select new board members
Appoint, advise, evaluate, dismiss the CEO/executive director
Board responsibilities
Personnel
Select new board members
Appoint, advise, evaluate, dismiss the CEO/executive director
Planning
Approve policies and programs Maintain clear mission and purpose
Establish standards for performance and hold the organization accountable
Board responsibilities
Board responsibilities
Finance
Ensure sound financial management and transparency Approve budget
Board responsibilities
Finance
Ensure sound financial management and transparency Approve budget
Fundraising
Approve plans for fundraising events Contribute and participate
Board responsibilities
Finance
Ensure sound financial management and transparency Approve budget
Fundraising
Approve plans for fundraising events Contribute and participate
Public Relations
Encourage outside participation in the organization.
Where does management fit?
Where does management fit?
Management = executive team
Executive director/CEO and staff
Where does management fit?
Management = executive team
Executive director/CEO and staff
Usually paid; direct day-to-day activities of the nonprofit
Where do boards come from?
Elected
Self-perpetuating
Hybrid
Elected boards
Elected boards
Membership elects the board
Elected boards
Membership elects the board
Pros
Nonprofit more responsive to
members' needs and priorities
Elected boards
Membership elects the board
Pros
Nonprofit more responsive to
members' needs and priorities
Cons
Membership divisions
reflected in board
High turnover makes it hard to
sustain long-term strategies
Board skills may be uneven
because of popularity contest
Self-perpetuating boards
Self-perpetuating boards
New board members selected by existing board
Self-perpetuating boards
New board members selected by existing board
Pros
Continuity of culture,
goals, and priorities
Can target members
with specific skills
Self-perpetuating boards
New board members selected by existing board
Pros
Continuity of culture,
goals, and priorities
Can target members
with specific skills
Cons
May become unrepresentative
of the community
Too stable to respond to changes
Often give too much
authority to the CEO/ED
Hybrid boards
Hybrid boards
Some positions are elected;
some are appointed or ex officio
Hybrid boards
Some positions are elected;
some are appointed or ex officio
Pros
Combines the
advantages of elected and
self-perpetuating boards
Hybrid boards
Some positions are elected;
some are appointed or ex officio
Pros
Combines the
advantages of elected and
self-perpetuating boards
Cons
Different interests and
loyalties may lead to a stalemate
Executive committee
Executive committee
Boards often have internal committees
Most common (and important) is the
executive committee of board officers
Chair Vice chair Secretary Treasurer
Executive committee
Boards often have internal committees
Most common (and important) is the
executive committee of board officers
Chair Vice chair Secretary Treasurer
Executive board can have the power of the full board for lots of decisions
Executive committee
Boards often have internal committees
Most common (and important) is the
executive committee of board officers
Chair Vice chair Secretary Treasurer
Executive board can have the power of the full board for lots of decisions
Other committees are useful too, depending on size and needs
Finance committee Marketing committee Strategy committee
Can have the power of the full board to make decisions with the exceptions that it cannot:
- Fill vacancies on the board
- Adopt, amend, or repeal bylaws
- Have powers inconsistent with those established when it was created by the board.
Special kinds of boards
Special kinds of boards
Advisory boards
Famous, rich, well-connected, or expert people
who want to be affiliated with the nonprofit
but don't have time for actual governance
Special kinds of boards
Advisory boards
Famous, rich, well-connected, or expert people
who want to be affiliated with the nonprofit
but don't have time for actual governance
Client boards
Members of the community the nonprofit serves
who consult with the governing board and executive team
Decisions to be made
Decisions to be made
Board elected, self-perpetuating, or hybrid?
Decisions to be made
Board elected, self-perpetuating, or hybrid?
Board size?
Decisions to be made
Board elected, self-perpetuating, or hybrid?
Board size?
Quorum size?
Decisions to be made
Board elected, self-perpetuating, or hybrid?
Board size?
Quorum size?
Should ex officio members (like the CEO/ED)
have a vote on the board?
Decisions to be made
Board elected, self-perpetuating, or hybrid?
Board size?
Quorum size?
Should ex officio members (like the CEO/ED)
have a vote on the board?
How should the executive committee be formed?
Nominated or open?
Find the board for a nonprofit
you're interested in. Who's on it?
What expertise do they bring?
Find a nonprofit with an advisory board.
Who's on it? Why do you think
the nonprofit sought them out?
What makes
a good board?
"Effective governance by the board of a nonprofit organization is a rare and unnatural act."
"Nonprofit boards are often little more than a collection of high-powered people engaged in low-level activities."
What should board members bring?
What should board members bring?
Wealth, wisdom, work?
This can omit critical voices though
Board recruitment and diversity
Board recruitment and diversity
Why care about board diversity?
Board recruitment and diversity
Why care about board diversity?
Recruit board members with different:
Board recruitment and diversity
Why care about board diversity?
Recruit board members with different:
Expertise (legal, fundraising, fiscal, personnel management)
Board recruitment and diversity
Why care about board diversity?
Recruit board members with different:
Expertise (legal, fundraising, fiscal, personnel management)
Ages Races and Religions
Board recruitment and diversity
Why care about board diversity?
Recruit board members with different:
Expertise (legal, fundraising, fiscal, personnel management)
Ages Races and Religions
Backgrounds (government, business, nonprofit)
Board recruitment and diversity
Why care about board diversity?
Recruit board members with different:
Expertise (legal, fundraising, fiscal, personnel management)
Ages Races and Religions
Backgrounds (government, business, nonprofit)
Experiences (clients of the nonprofit, advocacy work, volunteering)
Best practices
Best practices
Top 10 organizations
used 86% of the
correct procedures
Bottom 10 organizations
used 70% of the
correct procedures
The top 10 organizations reported using 86% of the correct procedures, whereas the bottom 10 use 70% (a difference significant at the .001 level, with a t value of 3.7). The correlation between reported use of prescribed board practices and correct procedures is r = .32 in the restricted sample; the same correlation in the full sample is r = .24. The relation is stronger in the sample of the most and least effective organizations, although the increase is not as great as expected. (p. 157)
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