Board Members’ Transparency and Tenacity

Recently I have seen several organizations that are struggling with quality board member communication. Even when all the board members are passionate about the organization and have the common good at heart they are not experiencing the joys of being part of a high performing board team that leads the organization to great results.

One of the challenges is the lack of transparency between board members. In the interests of time efficiency board members aren’t spending the time needed to get to know each other well. On the surface the board members may trust each other, they believe that their colleagues are honest and well intentioned. However, their trust doesn’t go deep enough for them to risk sharing their thoughts, feelings, and gut reactions openly with each other. This too often leads to decisions that are only accepted at the head level. Board members leave the meeting not bought-in with their heart and therefore do not promote or enthusiastically support the board’s newly stated philosophy. The rest of the organization, in turn, does not get the message, and thus does not have the benefit of effective leadership. Even if the board’s decision was a quality one, there are no followers because the rest of the organization does not get the message. This lack of effective leadership significantly impedes results. Increased board member transparency leads to decisions that are accepted, more clearly communicated, and impact positive organizational results.

Planning for Results

Stephen Covey’s first habit of highly successful people, “begin with the end in mind”, also applies to organizations. The purpose of strategic planning is to articulate goals for the organization for the next one to five years. These goals define what the organization is expected to achieve by the specified dates.

Setting such specific goals is a key aspect of the board’s responsibility to direct the organization. Effective directors are proactive about generating ideas for organizational progress. They develop specific and time-bound goals that state very clearly “what” the organization is expected to accomplish. Then the board asks the staff to develop an operational plan indicating “how” the desired results will be achieved. The operational plan outlines the action steps or tactics that will be completed to get the desired results.

Too often board members are happy to let the staff who work for the organization many more hours per week develop the strategic plan, and then the board members simply rubber stamp the staff proposal. Such board members are abdicating their leadership responsibility.

Boards are Only as Strong as Their Weakest Link

“A key person on our board died several months ago and it is taking us a while to recover.” Three people have shared this challenge with me in the past week.

All of these organizations had been proactive in succession planning for officer and committee chair positions. One had a quality experienced board member in place to become board chair at its annual meeting in January. The other two had top notch people chairing committees that were gathering momentum to lead major organizational initiatives.

Due to sudden deaths, all three boards are backpedaling. One has called a former board chair back into service. The others are redoing work that an enthusiastic individual had done himself and sorting through notes to determine the current state of developing programs.

As is the case for most boards, some members are highly skilled while others have little board experience or understanding. The boards have not being requiring certain skills in their board member nominees nor providing governance training to equip less experienced board members for board excellence. Succession planning on these boards has not been as deep or broad as desirable. A few capable people have carried the minimal contributors. Now that key capable people have passed away the other capable people are burning out picking up the slack because the minimal contributors’ are not equipped to fill the holes. The organizations’ effectiveness is at risk.

What is your greatest frustration as a board member?

Answer this question here!

Who Champions a Change in Organizational Structure?

Changing organizational structure has come up in so many of my conversations in the last week that I thought I should touch on it for all of you who are in the midst of such changes. One of the biggest issues in mergers coming out of these conversations was, “Who should champion the change?”. There was common agreement that the owners or members of the organization need to be served by any change in structure.

Two different types of structure change were being considered by various organizations. Some were dramatically changing how board members are selected and/or how many board members they would have. Others were in various stages of the merger process. In both types of situations there needs to be a buy-in by the owners. Most constitutions or by-laws will indicate that such changes require a 50 to 75% vote of the owners or members. Since board members are selected to be trustees on behalf of the owners, the board members have the responsibility to carefully consider structure change specifics and to communicate with the owners so they can make an informed decision about whether to support the proposed structure change.

Hiring a School Superintendent

This week I attended the public interviews of candidates for school superintendent in a nearby school district. That night the school board members clearly demonstrated two disciplines from the Governance Excellence Model.

The board demonstrated “respect for the owners”, the residents of the school district, by choosing to have public interviews. The board members realize that they are accountable to the residents. The meeting room had capacity for many observers so the public could understand the process and the range of people considered for this high profile position. The board provided an opportunity for community members to submit questions for board members to ask the candidates. It also provided refreshments and scheduled time for the candidates to meet and dialogue with those in attendance. The board members also talked with the attendees, giving the opportunity for feedback. Showing such respect for the owners builds the community members’ trust in the board to serve their interests.

The board’s focus that evening was to “select prominent leadership”; to ensure that the operational leader is equipped to serve the organization’s purpose well. Each superintendent candidate was asked to make a 30-minute presentation sharing information that he thought would help the board members better understand his capacity to be an excellent superintendent. Board members then asked questions to learn how the candidate would address various challenges within a school superintendent’s role. The board, in advance, had considered some important criteria for selecting the successful candidate and followed a process that uncovered relevant information.

The school board took thoughtful action to fulfill what is often considered a board’s most important job, the selection of a new senior staff person; and the board is keeping the owners informed along the way. When the new superintendent is announced in a few weeks I expect the community will have confidence in the board’s choice. The next phase of this school district’s work will be positioned for success.

Removing Underperforming Board Members

An organization that is highly effective long-term has a smart and healthy board. This requires that appropriate people are sitting on the board. One bad apple can spoil the whole bushel. If you are serving your organization well, you won’t let one bad board member cripple your progress.

Too many organizations rely on term limits to oust an under-contributor. At a recent hospital governance conference, Jamie Orlikoff mentioned that he had heard some board members say of a peer, “we only have to put up with him for another six years”. Ouch! How painful for the board members, the CEO, and the organization! There are other avenues.

Board member evaluations are a major part of the solution. When organizations have written board member expectations or job descriptions it is possible to provide feedback to each board member on what she is doing well or where he could improve. The board chair or board governance committee is often assigned the task of ensuring board member evaluations happen. The intent is that board members will be appreciated and encouraged in their areas of contribution and will receive training and coaching in the areas of concern so that they can become great contributors. However, if an underperforming board member has no interest in or no potential for performing well in the board role, it is time to encourage – and eventually insist – that she not continue as a board member. As Jim Brown, one of my Strive! colleagues says, “terming out is copping out”. Leaders need to take tough actions.

Board Term Limits

I recently heard David Barton, an expert on cooperatives from Kansas State University, speak on board term limits. Since I see the downside as well as some benefits of organizations having term limits for their board members, I was particularly interested in his comments. David Barton shared that recent research on governance practices among cooperatives in Kansas has shown a move away from term limits. Many organizations have found that the benefits of term limits are not worth the disadvantages.

Almost everybody is in favor of clear terms. When someone becomes a board member it is important that the end of this board appointment is understood – the individual will be a board member until a certain date, say March 31, 2012. If those who select board members wish, the individual can be given another term that might expire on March 31, 2015. There are actually some organizations that have asked people to join their boards, and serving became an ongoing responsibility until the person pleaded years later to be excused from this apparent unending obligation. Let’s be clear and state the date on which the current commitment ends. Three year terms are common. I have also seen one, two, and four year terms.

Has Your Incorporation Expired?

Last year a board on which I was sitting discovered that our incorporation had expired. The board members had just signed the documents to sell real estate and learned that our organization wasn’t even a valid legal entity so the real estate transaction was invalid. Recently I discovered that several non-profits in my community have found themselves in a similar position. How could such a thing happen?

Most jurisdictions require renewal of incorporation every few years, in some places it is every 5 years. The government mails renewal documents a few months before the due date, and as long as these simple forms are returned indicating that the organization is still active, the incorporation is automatically renewed. But when the address of the organization or the statutory agent changes and the government is not advised, the renewal notice doesn’t get delivered. The government office that handles incorporation in each jurisdiction asks for the name, position, and address of the statutory agent, the person who is to be the contact for official matters on behalf of the organization. And they require notification when the name, position, or contact information of the statutory agent changes. Many board members and senior staff have never completed statutory agent nor incorporation renewal documentation and don’t even know such government forms exist.

Listen to “Building Healthy Ministry Teams Part 1″ FREE

This was the Teleseminar held on November 6th with myself and T.J. Addington.

Listen for FREE, click the link below.

http://www.instantteleseminar.com/?preview=3&previewbar=1&eventid=4196334

This will be available to listen to till December 7th, 2008.  Enjoy!