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Building an Exceptional Board of Directors

Building an Exceptional Board of Directors

Continuing Studies at University of Continuing Studies at University of Wisconsin - MadisonWisconsin - Madison

Presented by Frank MartinelliPresented by Frank Martinelli

The Center for Public Skills TrainingThe Center for Public Skills Training

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Board Development: CORE ACTIVITIESBoard Development: CORE ACTIVITIES

Board Assessment (or Reassessment) & Benchmarking

Board Development

Action Planning

Board Development Plan Implementation

CONTINUOUS:

•Team Involvement

•Education and Learning

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Board Governance: Fundamental AssumptionsBoard Governance: Fundamental Assumptions

• Distinction between governance and Distinction between governance and management.management.

• ““Ends” and “means” distinction.Ends” and “means” distinction.• Clarity and agreement about who does Clarity and agreement about who does

what.what.

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Leadership for Board DevelopmentLeadership for Board Development

• Critical role of . . .Critical role of . . .• Full Board. Full Board. • Board Development Committee.Board Development Committee.• Board President and Executive Board President and Executive

Director.Director.

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Board Development As A Leadership Development Process

Board Development As A Leadership Development Process

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A Leadership Development ProcessA Leadership Development Process

• Nominations and recruitment -- the process of the process of identifying the right individuals to meet the needs of identifying the right individuals to meet the needs of the board helping them understand their roles and the board helping them understand their roles and responsibilities, and convincing them to become part responsibilities, and convincing them to become part of the board.of the board.

• Orientation -- the steps taken to give new board the steps taken to give new board directors the information they need to carry out their directors the information they need to carry out their roles and responsibilities effectively.roles and responsibilities effectively.

• Training -- the regular, ongoing efforts to build new the regular, ongoing efforts to build new skills and knowledge among the existing board skills and knowledge among the existing board directors to enhance performance.directors to enhance performance.

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A Leadership Development ProcessA Leadership Development Process

• Evaluation -- the annual task of evaluating individual board director performance as well as the effectiveness of the board as a whole.

• Recognition -- the ongoing process of recognizing the work and accomplishments of board directors to the work of the board and to the organization.

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Profile of An Effective BoardProfile of An Effective Board

• Effectiveness in terms of individual Effectiveness in terms of individual board leader development (previous board leader development (previous slides).slides).

• Effectiveness in terms of qualities or Effectiveness in terms of qualities or characteristics.characteristics.

• Effectiveness in terms of collective Effectiveness in terms of collective board performance.board performance.

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Profile of Effective Nonprofit Board LeadershipProfile of Effective Nonprofit Board Leadership

• Visionary and future-focused.Visionary and future-focused.• Entrepreneurial spirit.Entrepreneurial spirit.• Risk-takers.Risk-takers.• Effective communicators.Effective communicators.• Systems thinkers.Systems thinkers.• Community connected.Community connected.• Diverse.Diverse.

Source: The Center for Public Skills Training

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Board Responsibilities

• Set the mission and strategic vision.Set the mission and strategic vision.• Select the executive.Select the executive.• Support the executive and review Support the executive and review

performance.performance.• Ensure effective organizational Ensure effective organizational

planning.planning.• Ensure adequate resources.Ensure adequate resources.

Source: BoardSource

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Board Responsibilities

• Ensure stewardship of resources.Ensure stewardship of resources.• Monitor impact of organization’s Monitor impact of organization’s

programs and services.programs and services.• Enhance the organization’s image.Enhance the organization’s image.• Assess its own performance.Assess its own performance.• Support public policy and advocacy Support public policy and advocacy

efforts.efforts.

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The Dynamic BoardThe Dynamic Board

McKinsey & Company

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The Board’s Core Responsibilities The Board’s Core Responsibilities

• Shape mission and strategic direction. Shape mission and strategic direction. • Ensure leadership and resources. Ensure leadership and resources. • Monitor and improve performance.Monitor and improve performance.

Source: McKinsey & Company

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Shape Mission And Strategic Direction Shape Mission And Strategic Direction

• Clarify mission and vision. Clarify mission and vision. • Participate in and approve strategic and Participate in and approve strategic and

policy decisions. policy decisions.

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Ensure Leadership and Resources Ensure Leadership and Resources

• Select, evaluate, and develop CEO. Select, evaluate, and develop CEO. • Ensure adequate financial resources. Ensure adequate financial resources. • Provide expertise and access for Provide expertise and access for

organizational needs. organizational needs. • Build reputation of the nonprofit.Build reputation of the nonprofit.

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Monitor and Improve Performance Monitor and Improve Performance

• Oversee financial and risk Oversee financial and risk management. management.

• Monitor organizational performance and Monitor organizational performance and ensure accountability. ensure accountability.

• Improve board performance. Improve board performance.

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Key Environmental Factors Impacting Focus of the BoardKey Environmental Factors Impacting Focus of the Board

• Life stage of an organization.Life stage of an organization.• Skills of CEO and staff.Skills of CEO and staff.• Stability and adequacy of income.Stability and adequacy of income.• Changes in underlying social issue.Changes in underlying social issue.• Changes in competitive or philanthropic Changes in competitive or philanthropic

landscape.landscape.

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Board Effectiveness EnablersBoard Effectiveness Enablers

• Careful decisions on board size and Careful decisions on board size and structurestructure

• Actively managedActively managed board composition board composition• Inspired board and committee Inspired board and committee

leadershipleadership• Simple administrative practices and Simple administrative practices and

processes made routineprocesses made routine

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Twelve Principles of Governance that Power Exceptional Boards

Twelve Principles of Governance that Power Exceptional Boards

BoardSourceBoardSource

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The Difference Between “Responsible” Boards And

“Exceptional” Boards

The Difference Between “Responsible” Boards And

“Exceptional” Boards

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“Responsible” Boards“Responsible” Boards

• Capable and dutiful in carrying out its Capable and dutiful in carrying out its responsibilities. responsibilities.

• Understands its fiduciary obligations.Understands its fiduciary obligations.• Approves strategic plans and budgets.Approves strategic plans and budgets.• Regularly reviews financial statements.Regularly reviews financial statements.• Evaluates the chief executive annually.Evaluates the chief executive annually.• Participates in fundraising.Participates in fundraising.

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“Exceptional” Boards“Exceptional” Boards

• Operates on a higher level -- “more” and Operates on a higher level -- “more” and “different.”“different.”

• Members give more and differently:Members give more and differently:• Time spent more wisely, skills and social Time spent more wisely, skills and social

networks better leveraged, and treasure networks better leveraged, and treasure more strategically deployed.more strategically deployed.

• Measure organizational impact and Measure organizational impact and evaluate their own performance, discuss evaluate their own performance, discuss and debate issues, and open doors and and debate issues, and open doors and make connections. make connections.

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Governance as LeadershipGovernance as Leadership

Richard Chait, William Ryan Richard Chait, William Ryan

& Barbara Taylor& Barbara Taylor

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Three Modes of GovernanceThree Modes of Governance

• Fiduciary mode: key question -- "How Fiduciary mode: key question -- "How are we doing?" are we doing?"

• Strategic mode: key questions -- "What Strategic mode: key questions -- "What are we doing?" "Where are we going?" are we doing?" "Where are we going?" andand

• Generative mode: key questions -- Generative mode: key questions -- "Why are we doing this?" "What are the "Why are we doing this?" "What are the possibilities?"possibilities?"

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Board Assessment ProcessBoard Assessment Process

• Guidelines for assessment.Guidelines for assessment.• Effective assessment tools. Effective assessment tools. • Review samples.Review samples.

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An Effective Assessment ProcessAn Effective Assessment Process

• Enthusiastic support board leadership.Enthusiastic support board leadership.• Based on a set of standards or best practices Based on a set of standards or best practices

that characterize effective board performance.that characterize effective board performance.• Formal process conducted on a regular, Formal process conducted on a regular,

agreed-upon basis.agreed-upon basis.• Written assessment tool that all board Written assessment tool that all board

directors complete is the centerpiece.directors complete is the centerpiece.• Plan to use the results to set goals, implement Plan to use the results to set goals, implement

and measure improvement.and measure improvement.

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Board Assessment SamplesBoard Assessment Samples

• MAP AssessmentMAP Assessment• UWEX AssessmentUWEX Assessment• GLA CB Assessment excerptGLA CB Assessment excerpt• McKinsey -- Short, Mid, Long FormsMcKinsey -- Short, Mid, Long Forms• CPST Visionary BoardCPST Visionary Board• 12 Principles of Exceptional Boards12 Principles of Exceptional Boards• 10 Questions10 Questions• 20 Questions20 Questions

Why Boards FailWhy Boards Fail

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Why Boards Fail

• Ineffective recruiting process.Ineffective recruiting process.• Members lack understanding of the Members lack understanding of the

organization and their roles.organization and their roles.• Micro-managing.Micro-managing.• No well-planned rotation of No well-planned rotation of

members.members.• No way to eliminate non-productive No way to eliminate non-productive

members.members.

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Why Boards Fail

• Too small. Too small. • No well-planned orientation for new and No well-planned orientation for new and

old members.old members.• No strategic plan.No strategic plan.• No process for assessment.No process for assessment.• No functioning committee structure.No functioning committee structure.

Board Development: Proven PracticesBoard Development: Proven Practices

Proven PracticesProven Practices

1.1. Clearly define roles and Clearly define roles and responsibilities.responsibilities.

2.2. Align key board processes with Align key board processes with strategic plan.strategic plan.

3.3. Just-in-time board orientation.Just-in-time board orientation.4.4. Effective meetings: Consent agenda Effective meetings: Consent agenda

and other tools.and other tools.5.5. Committee effectiveness.Committee effectiveness.

1.1. Clearly define roles and Clearly define roles and responsibilities.responsibilities.

2.2. Align key board processes with Align key board processes with strategic plan.strategic plan.

3.3. Just-in-time board orientation.Just-in-time board orientation.4.4. Effective meetings: Consent agenda Effective meetings: Consent agenda

and other tools.and other tools.5.5. Committee effectiveness.Committee effectiveness.

Proven PracticesProven Practices

6.6. Organizational dashboard.Organizational dashboard.

7.7. Board leadership succession plans.Board leadership succession plans.

8.8. Board assessment.Board assessment.

9.9. Board governance committee.Board governance committee.

10.10. Incorporate strategic deliberation Incorporate strategic deliberation into every board meetinginto every board meeting

6.6. Organizational dashboard.Organizational dashboard.

7.7. Board leadership succession plans.Board leadership succession plans.

8.8. Board assessment.Board assessment.

9.9. Board governance committee.Board governance committee.

10.10. Incorporate strategic deliberation Incorporate strategic deliberation into every board meetinginto every board meeting

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#1 Clearly Define Roles and Responsibilities#1 Clearly Define Roles and Responsibilities

• Clarity re: management and Clarity re: management and governance.governance.

• Written individual board and committee Written individual board and committee descriptions that are current.descriptions that are current.

• Maintain clarity re: board policy and Maintain clarity re: board policy and oversight functions.oversight functions.

• Ensure that current job description is in Ensure that current job description is in place for the executive director.place for the executive director.

Board Job Description

• Attend all regular board meetings.Attend all regular board meetings.• Serve as an active committee member.Serve as an active committee member.• Support fundraising activities.Support fundraising activities.• Prepare in advance for board policy Prepare in advance for board policy

and decision-making.and decision-making.• Attend the annual board planning Attend the annual board planning

retreat.retreat.

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#2 Align Key Board Processes With Strategic Plan

#2 Align Key Board Processes With Strategic Plan

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Link Board Recruitment with Strategic PlanLink Board Recruitment with Strategic Plan

• Review the strategic plan.Review the strategic plan.• Identify the skills, Identify the skills,

knowledge and knowledge and relationships needed by relationships needed by the board to advance the the board to advance the strategic plan.strategic plan.

• Set clear recruiting Set clear recruiting priorities.priorities.

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Align Committee Structure with Strategic PlanAlign Committee Structure with Strategic Plan

• Review committee structure as part of Review committee structure as part of strategic planning.strategic planning.

• Align committees with plan.Align committees with plan.• ““Leaner is better”.Leaner is better”.• Use task forces and workgroups in Use task forces and workgroups in

place of standing committees.place of standing committees.

#3 Just-in-time Board Orientation

• An advance program of orientation An advance program of orientation and training to prepare new board and training to prepare new board members to hit the ground running.members to hit the ground running.

• Focus on the strategic plan.Focus on the strategic plan.• Speed up the learning curve. Speed up the learning curve. • Increase confidence and productivity Increase confidence and productivity

of new board members.of new board members.

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#4 Consent Agenda#4 Consent Agenda

• Expedites routine Expedites routine business at a board business at a board meeting.meeting.

• Eliminates the need to Eliminates the need to vote separately on many vote separately on many of the routine items.of the routine items.

• Frees up time to address Frees up time to address critical matters.critical matters.

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#5 Committee Effectiveness#5 Committee Effectiveness

• ““Fewer is better”.Fewer is better”.• Written committee descriptions.Written committee descriptions.• Aligned with strategic plan.Aligned with strategic plan.• An effective chair.An effective chair.• Members thoughtfully appointed.Members thoughtfully appointed.• Mix of board and non-board members.Mix of board and non-board members.• Accountable to the board.Accountable to the board.• Well-run meetings.Well-run meetings.

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Annual Committee & Board Meeting CalendarAnnual Committee & Board Meeting Calendar

• Fosters attendance Fosters attendance and participation.and participation.

• Improves decision-Improves decision-making.making.

• Promotes Promotes coordination and coordination and increases productivity.increases productivity.

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#6 Organizational Dashboard#6 Organizational Dashboard

• Increases effectiveness of Increases effectiveness of board decision-making. board decision-making.

• Displays up-to-date Displays up-to-date information about key information about key performance indicators.performance indicators.

• Corrective action can be Corrective action can be taken before - not during taken before - not during or after - a crisis erupts. or after - a crisis erupts.

#7 Board Leadership Succession Plans#7 Board Leadership Succession Plans

• Identify critical Identify critical leadership positions.leadership positions.

• Scout board leadership Scout board leadership talent for the future.talent for the future.

• Written plan for fostering Written plan for fostering and developing future and developing future board leadership.board leadership.

• Identify critical Identify critical leadership positions.leadership positions.

• Scout board leadership Scout board leadership talent for the future.talent for the future.

• Written plan for fostering Written plan for fostering and developing future and developing future board leadership.board leadership.

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#8 Board Member Assessment#8 Board Member Assessment

• Periodic assessment of board Periodic assessment of board member and committee member and committee performance.performance.

• Board meeting feedback Board meeting feedback form.form.

• Board follow-through.Board follow-through.• Relate findings to board Relate findings to board

nominations process. nominations process.

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#9 Governance Committee#9 Governance Committee

• Continuous focus on identifying, preparing Continuous focus on identifying, preparing and recruiting future board leaders.and recruiting future board leaders.

• Plan board education including new Plan board education including new member orientation, ongoing training and member orientation, ongoing training and board retreats.board retreats.

• Assess board, chair, individual directors, Assess board, chair, individual directors, and board meetings. and board meetings.

• Annually review governance practices and Annually review governance practices and recommend changes.recommend changes.

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#10 Incorporate Strategic Deliberation Into Board Meetings

#10 Incorporate Strategic Deliberation Into Board Meetings

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Strategic DeliberationStrategic Deliberation

• Use values and vision as the basis for Use values and vision as the basis for dialogue on emerging issues.dialogue on emerging issues.

• Use vision as frame-work for decision-Use vision as frame-work for decision-making.making.

• Read, listen and look for future trends.Read, listen and look for future trends.• Provide opportunities to share Provide opportunities to share

information at board meetings.information at board meetings.

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Development of Board, Committee and Member Action Plans

Development of Board, Committee and Member Action Plans

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Preparing for Action PlanningPreparing for Action Planning

• Assure board understanding and Assure board understanding and commitment.commitment.

• Board Development Committee in Board Development Committee in place.place.

• Retreat event to analyze assessment Retreat event to analyze assessment results and develop action plan.results and develop action plan.

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Board and Committee Action PlansBoard and Committee Action Plans

What Change What Change or Practice or Practice

By By WhenWhen

Who Who ResponsibleResponsible

EvaluationEvaluationMeasureMeasure

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Personal Action PlansPersonal Action Plans

1.1. Actions I will commit to in order to Actions I will commit to in order to increase/sustain my individual level of increase/sustain my individual level of board performance.board performance.

2.2. What I would need from the What I would need from the organization. organization.

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ResourcesResources

Board Effectiveness Resource List

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EvaluationEvaluation

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