Is your non-profit board built for effective governance?

By Diana Brockway, VP, Commercial & Institutional Banking

Answer these questions to determine if your board is built for effectiveness.

Serving on a not-for-profit board can be both rewarding and demanding. The return on the investment you make in time, resources and expertise is closely tied to the effectiveness of the board on which you serve. Before joining a board or signing on for another term, it is wise to ask yourself some questions about the board, its structure and its culture.

To help frame those questions, MB Financial Bank recently partnered with the Association Management Center to present a forum on board effectiveness that brought together academic experts as well as current leaders of not-for-profit boards. Their scholarly research and real-world experience combined to help pose some of the pivotal questions board members should ask themselves.

Board and Governance

1. Where is the organization on the life-cycle continuum? This is an important question to begin with. Organizations need different things from their boards at different life stages. From startup to maturity, decline to renewal, effective boards must have a clear understanding of the life stage of the organization and adapt their membership, focus and work to suit those needs.

2. Does the board engage in “environmental scanning” on a regular basis?
Many organizations are dealing with disruptive external change – social, technological, economic or political. Organizations and their boards need to work with an accurate assessment of emerging needs, whether they serve members of a profession, trade group or at-risk population. Fellow board members can offer insights and intelligence, but organizations also need to dig deeply and objectively to understand the environment and ensure they are effectively delivering on their mission.

3. Is the board structured to manage both life-cycle and external environment issues? Many boards are moving away from rigid committee structures and toward the use of task forces. This allows them to manage emerging issues or new challenges uncovered in environmental scans. The task forces do their work, report and make recommendations to the board or the organization membership, then dissolve. Make sure your board structure is well-matched to the organization’s challenges.

4. What is the board culture? The culture of an effective board is usually a reflection of the organization it serves. Cultures range from rigidly structured and hierarchical to inclusive and collaborative. Depending on the life stage of the organization and the challenges presented by its current environment, any of those cultures may be appropriate. However, when you are considering a new board membership, make sure that its culture is one in which you are comfortable working and where you are confident you can add value.

5. Will or does the board use your skills and talents effectively? You bring knowledge and expertise from your profession and perhaps from experience on other boards. The more a prospective board knows about your background, the more valuable you can be. If your skills and talents are not being used in making your current board more effective, raise your hand. And as your professional experience and skills shift and grow, keep the boards on which you serve aware of what you can contribute.

6. What do you want to achieve through board membership? Most board members or board candidates have more than one reason for serving, particularly in the not-for-profit sector. For some, it is your management’s expectation that you serve on the board of a trade or professional association or a charity. For others, it is a learning opportunity. But for many, there are three compelling reasons to contribute. One or more may apply to you:

  • Translating valuable skills from the for-profit world
  • Transfer of learning from other board experience
  • Civic dedication and personal commitment to give back

No matter what motivates you, it is wise to communicate your personal goals during the board recruitment process or as you consider an additional term. But before deciding to serve, be sure you weigh the time and resource commitment required in terms of personal reward and fulfillment.

Every board’s goals and measures of effectiveness, as well as your answers to these questions, will evolve over time. Keep an open dialogue with your board chair and executive committee. Remember – your shared goal is an effective board.