Are you aware of the main weaknesses, omissions, mistakes, flaws, bad judgments, and even sins that a board or individual board member can commit? From an excellent article published by the Boardsource Knowledge Center (on www.nonprofitalliance.org), here are some common ways that a governing board can lose its way. We’ve certainly addressed many of these issues in depth across our archive of Rich TIPS, although this is a great checklist for board self-evaluation that summarizes the challenges succinctly. Our observations are included as well.
1. Veering off the mission. Example: A youth education organization accepts a generous grant to build a sports facility for young people. The most important decision-making guideline for a board is the mission statement. If the mission is not a central theme at every board meeting, it can be easy for a board to lose focus of the organization’s true purpose. Mission drift is regrettably one of those problems that is most obvious in hindsight—and all too often involves “following the money.”
2. Complacency. Example: A board member does not know how to analyze financial statements, so instead of asking questions, he votes with the majority. A core obligation of every board is active participation. Some symptoms of complacency might include board members who put off their assignments, disregard the core responsibilities that come with being a board member, fail to ask questions, or miss meetings.
3. Misguided motivations. Example: A board member recruits an out-of-work relative to run the organization. Board members must always think of the organization first. Allowing personal preferences to affect decision-making places the organization in a secondary role. Misguided or uneven unethical motivations, undeclared conflicts of interest, and the pursuit of personal benefit are serious breaches that could you’re your reputation, make you vulnerable to negative publicity, and even threaten your nonprofit’s tax-exempt status.
4. Multiple voices. Example: A board member is interviewed by media and advocates for her own solution to a crisis situation—not the one adopted by the board. A board only has authority as a group. Boards must speak with one voice, which is formulated through deliberation. Individual members are bound by the collective decision. Differing opinions need to be resolved in the boardroom, not declared outside to constituents, the media, or the people you serve.
5. Micromanaging. Example: The board insists on being involved in choosing a new computer system for the organization. One of the key duties of a board is to hire a competent executive to run daily operations. Job descriptions for board members and for the executive, along with a formal evaluation process for both, will do much to define and honor these boundaries. This situation is particularly tricky for new organizations that are evolving enough to have their first paid staff—now performing roles that were formerly held by volunteers.
6. Limitless terms. Example: Fearful of losing control, the founding board has been in place for 15 years. Every board must accept and even thrive on change. New perspectives and different ideas keep an organization moving forward. Term limits help board avoid being stagnated. Form an advisory board for your long-time champions who want to stay involved.
7. Lawless governance. Example: To get through a temporary financial crunch, the executive director decides not to pay payroll taxes for several months. The board is unaware. Nonprofits must of course heed federal, state, and local regulations as well as their own bylaws. It is the board’s role to ensure that all laws are respected. It is the board’s responsibility to see that the IRS Form 990 is filed correctly and on time, that employment taxes are withheld regularly, and that official documents are saved appropriately. If a board fails to adopt appropriate policies or effectively oversee financial matters, it may become liable for wrongdoing.
8. No self-assessment. Example: Board member morale is low, attendance and participation is sporadic, and the chair doesn’t know how to energize the board. By studying its own behavior, sharing impressions, and analyzing the results, a board is able to lay the groundwork for its own improvement. A board must be willing to define its own strengths and weaknesses; as a by-product, it can also enhance its team spirit, its accountability, and its credibility with funders and other stakeholders.
9. Lack of continuous improvement. Example: Board members have not seen a job description for their role(s) and are unfamiliar with their legal obligations. Self-improvement by the board is critical to the ultimate success of any nonprofit. Boards that do not provide learning opportunities for its members are ultimately failing to draw upon each person’s talents and commitment, and the connection between individual and organization will ultimately fail.
10. Knotted purse strings. Example: A board does not explore, or cannot reach consensus on, its personal contribution policy. The group will become divided due to feelings of unfairness and lack of commitment. Asking for and giving money are natural aspects of being a board member. Boards that are responsible for fundraising yet do not have a 100% contribution rate have failed the ultimate commitment test. If a board is not supporting the organization whole-heartedly, why should others do so?