Board Development Workshop

An overview of recognized “Best Practices” for developing an effective

board governance model

The GoalTo present a broad sweep of sound, fundamental

principles on effective board governance -- so that your board can take this information and build its own unique model.

A quick background on me…• 1989 was named Director of Development for one of the Rockefeller

Foundations – focused on marine conservation.

• Three years later was promoted to Executive Director.

• We had offices in 20 countries and did more than 50 major fundraising events per-year.

• Since 1995 have served as a consultant and executive educator to more than 300 companies worldwide including: IBM, Microsoft, GE, AT&T, Abbott Labs, State Farm, Genentech…

• I have served on the board of directors of numerous national and local non-profits.

Just a few brief slides to address what I believe are some key points that every board member needs to

keep in mind…

The 5 keys to ruining or running

a great organization

1-10

1. Lack of 1. Lack of FOCUSFOCUS

Leadership questions…1-10• Do you have a clear, vivid and compelling

vision for your organization?

• Do you continuously and consistently help everybody to understand the direction of the organization and the specific role they play in it’s success?

2. Plan – but no…

ACTION

Leadership questions… 1-10• Have you created a… Culture of

URGENCY married to Disciplined Execution?

• Do you encourage and reward fast action taking and a bias throughout the organization for making the most important things happen…NOW?

3. Lack of clear Communication

Leadership question… 1-10• Do you have a Board and organization

that values open, honest and clear communication as a critical component of business success?

• Do you have the tough conversations and deal with difficult issues in a timely manner?

4. Hiring and retaining

sub-par employees / or allowing

non-performing board members to remain in the

organization.

Leadership questions… 1-10• Do you allow only the very best people to be on

your team? • Do you give them the training and support

necessary to allow them to succeed?• Do you set high performance standards and

then hold people accountable for reaching them?

Staff and Board

5. Turning the focus inward.

Leadership Questions… 1-10• Do you have multiple ways to communicate with

your stakeholders?• Do you deeply understand their needs, wants,

concerns, issues, preference?• Do you own the VOC?

Effective Boards

• Clear about their Roles & Responsibilities• Have a bias for ACTION• Are knowledgeable and prepared• Take their commitment seriously• Hold each other accountable• Support the organization strongly• Develop the organization and BOD

Common MistakesTime on the Trivial

Short-term Bias

Reactive Stance

Reviewing/Redoing

Leaky Accountability

Diffuse Authority

A governance model should...• Cradle the vision• Address fundamental values• Force an external focus• Enable an outcome-driven system• Separate large from small issues• Force forward thinking• Enable productivity…

• Facilitate diversity - and unity• Describe the relationship to customer• Define BOD discipline• Define BOD role• Determine what information is needed• Balance over control / under control• Use BOD time efficiently

A governance model should

Leadership Through Policies

Leverage & Efficiency

ExpertiseCore Fundamentals:

Vision / Mission / ValuesStrategic DirectionFiduciary Oversight

Three Key Roles & Responsibilities

1. Evaluating Ends

2. Setting Limits

3. Active Participation

Critical Key Point • The typical BOD member measures his or her involvement with the organization in “tens” of hours per year.

• The staff measures their total involvement in “thousands” of hours per year.

Staff Issues• Personnel• Compensation• Coordination• Accounting

• Risk management• Record Keeping• Reporting• Tactical Execution

These are NOT board issues,They are Executive level issues.

The board need only involve itself in oversight

of executive means to determine that

acceptable standards of prudence and ethics are

being met.

Control Through Proactive Constraint

• Attendance• Discipline• Governance• Development

• Agendas• Vision• Fundraising• Results

The board is responsiblefor its own:..

.

Not listening to reports that should have been delivered and studied well in advance.

Meetings are for making decisions…

Meetings10 % of meeting focused on

review of staff reports.

50% on committee reports.

40% future focused decisions and action assignments.

Committees• Committees are a critical aspect of an effective non-profit organization.

• Every board member should serve on at least one committee.

• Committee work MUST be taken seriously.

• Committees can work with/through staff – but do not direct the staff, or simply put the burden back on the staff. The committee members are responsible for delivering results.

• Typical committees include:

• Finance

• BOD development

• Events / fundraisers / special projects

• Compensation

The Board Executive relationship

The only Staff member the board directs is the executive director.

The director is basically the CEO of the organization.

Setting Limits• The Board must have control over the

complexity and details of staff operation.• It is also important that the board be free

from the complexity and details of staff operation.

• Key: set clear limits…

Typical Limitations Contracts Indebtedness Budgeting Growth

Asset Protection Funding allocations Fund Depreciation Compensation

Fiduciary Responsibility

A word about micro-management…

• Understand that telling the Director how to manage would be a never-ending process.

• Understand that if the board tells the Director how to operate, it can no longer hold the Director accountable.

• Constraining language is actually empowering.

No Staff ???• When there is no staff the

board is the workforce as well as the governor.

• BOD – sets policy and measurements.

• Committees become board-assigned workers.

Basic BOD Job Description

Linkage to Ownership (Ends)

Explicit Governing Policies (Means)

Assurance of Executive Performance (Measurements)

Serious Commitment / Accountability

Positive Representation / 3 T’s / 3G’s…

Time for a 15 minute break

Let’s talk about fundraising…

•Nobody (or very few people) love to ask for money.•Unless you are on a pure “strategy” board or have been exempted – every

director MUST participate in fundraising.•There should be a set amount that every director is responsible for getting

or giving.•The Director of Development can assist – but they are also responsible for

meeting their own fundraising goals.•The goal is to make it as simple and painless as possible for board

members to solicit funds.

Personal Donations• People give for both logical and emotional

reasons.• #1 issue: How will my money be spent?• Let them invest in a project or projects.• Ask them to help you find other donors or new

Board members.• Get them involved if they want to be.• Above all else: Thank them and show them that

their money made a real difference.

Making the personal ask• Make it easy to say YES or NO - pressure rarely works.

• Know your stuff = logic and emotion.

• Bring proof.

• Find out what is important to them.

• Give them a range of projects to choose from.

• Ask them about recognition.

• Ask them about other friends/colleagues that they feel might want to get

involved.

• Bring along the DOD or ED for support.

Companies don’t give “big” money because…

• You are nice

• You have great potential

• You do “good” things

• You are their friend

• You have known them a long time

• Because you need the money

They give because…• It is a business investment.

• It will have a high ROI.

• It will get results…for them.

• It will get positive results for others…who are important to them or their business.

• It will get them positive publicity, recognition, brand equity – that will result in improved business performance.

Board development is critical• It is the responsibility of current board members to

recruit new board members.

The “on-boarding” process• Make the expectations VERY clear.• They should meet with the ED and COB.• Let them meet with several members.• Assign a mentor.• Give them a detailed “Board Book.”• Have them sign a “contract.”

• Attendance• Preparation• Financial commitment• Committee obligations• BOD development• Participation in events

Once you get them on the board…

Summary of Key Points

Key BOD Process Points• The board stands in for those who morally own the

organization.• The board speaks with one voice – or not at all. The

board will allow no officer, committee, or individual to come between the board and the Director.

• The board instructs no staff but the Director.• The board controls Ends positively – by

prescribing certain ones.• The board controls Means negatively – by

prohibiting certain ones.

Effective Boards 1-10• Absolutely clear about their Roles & Responsibilities

• Have a bias for ACTION

• Are knowledgeable and prepared

• Take their commitment very seriously

• Hold each other 100% accountable

• Strongly support the organization

• Develop the organization and BOD

Effective Boards 1-10• Are actively involved in the organization.

• Are actively involved in fundraising for the organization

• Are actively involved in representing the organization in the community.

• Are committed to taking a proactive role in shaping the future of their organization.

Workshop• Go back and look over the slides.

• Look at your scores to the audit we just took and the one we took at the very beginning of the session. Where are your lowest scores?

• Based on everything you have learned this morning, what are FIVE specific and measurable actions steps that your board can take right away to be more effective and successful?

Q&A

Thank You!!!!!If you have ANY questions at all, please do not

hesitate to contact me:

John@johnspence.comwww.johnspence.com

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