welcome to board orientation ronald l. moy, md, faad may 6, 2011

Welcome toBoard Orientation

Ronald L. Moy, MD, FAADMay 6, 2011

Academy History

Statler HotelDetroit, MI

Evanston, IL

Schaumburg, IL

Washington, DC

Your Role as a Board Member

#1 myth . . .

You won’t have to do anything

when you get on the Board!

#2 myth . . .

You have to do everything yourself when you get on the Board!

The Board governs . . .

Leadership:

Volunteer leaders are responsible for the strategic direction of the organization. The Board governs, develops policy and sets a course for the future. Maintains focus on the mission and strategic framework.

The Board governs . . .

The main functions of the Board are• Governance• Visionary focus• Fiduciary Responsibility

Legal Principles

Duty of Carerequires leaders to use reasonable care and good judgment in making their decisions on behalf of the organization.

Duty of Loyaltyrequires leaders to be faithful to the organization, avoiding conflicts of interest.

Duty of Obediencerequires leaders to comply with the organization’s governing documents.

Apparent Authority Policy provides guidance on who is authorized to speak on behalf of

the Academy

. . . the staff manages

Management:

Professional staff are responsible for the administration of the organization. Staff act as partners with the Board, advancing the goals and strategies, and applying knowledge of best practices in association management.

Board Responsibilities

• Determine and advance the organization’s mission and purposes.

• Select the Executive Director• Support and provide meaningful feedback

to the Executive Director • Ensure effective organizational planning• Ensure adequate resources

Board Responsibilities

• Provide resource and financial oversight• Monitor and assure programs and services

meet member needs and fulfill strategic objectives

• Promote the organization’s image• Ensure legal and ethical integrity and maintain

accountability• Recruit and orient new Board members, and

assess Board performance. Adapted from Ten Responsibilities of nonprofit Boards (BoardSource)

Board Expectations

• Physically attend and come prepared to all Board meetings

• Be engaged and responsive to Academy requests for input• Attend Leadership Forum, Legislative Conference, and

other events such as Health Policy Retreat• Serve as liaison to CCTFs as assigned• Provide Academy Updates at Subspecialty, State and

other related society meetings • Visit Camp Discovery• Recruit future Board Members• Contribute to the Academy Sustaining Fund and the PAC

Board Leadership Values

• Trust

• Be there, be engaged.

• Seek first to understand

• AAD is # 1

• Value diversity

• Communicate with one voice

• Bring out creativity

Senior Staff Responsibilities

• Manage day-to-day operations of the organization, including personnel decisions

• Primary liaisons and partners with elected leadership

• Assure effective execution against strategic goals set by the Board

Senior Staff Team

Senior Staff Team

Senior Staff Team

Senior Staff Team

Strategic Board Meetings

Strategic Board Meetings

Old School

Board Dynamics Dynamic Board

Meetings• Board members who

are prepared• Information presented

clearly and concisely• Tools of the trade

– Consent agenda– Dashboards– Executive Sessions

Nature of Debate• Focus on strategic

issues, not administrative• Time for meaningful

discussion• Culture of rigorous inquiry• Independent-mindedness• Include, as appropriate,

expert guests and facilitators

Strategic Board Meetings

RECOMMENDATION FOR ACTION INFORMATION REPORT

Task

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Mission Promoting leadership in dermatology and excellence in patient care through education, research and advocacy

Values

Patients First Professionalism Lifelong Learning Rigorous Inquiry and Creative Work Collaboration Social Responsibility Diversity

Vision Excellence in Dermatology

Vision, Mission & Values

The Academy Values . . .

– Patients First – Compassion, caring and listening are the heart of delivering the highest quality of dermatologic care. Ensuring member’s ability to facilitate access to dermatologic care and deliver the highest quality of care.

– Professionalism – Adhering to an uncompromising code of clinical and ethical standards among ourselves and with the public. The cornerstones of these standards emphasize honesty, integrity, transparency and mutual respect.

– Lifelong Learning – Pursuing knowledge and continuous improvement, embodying a spirit of intellectual curiosity and interchange through self assessment and ongoing evaluation.

– Rigorous Inquiry and Creative Work – Pursuing excellence through innovation, creativity, critical evaluation and open dialogue.

– Collaboration – Working together, with mutual respect, collegiality and transparency. Collective and coordinated efforts through partnerships and teamwork encourage engagement, inspire ideas, create essential dialogue and foster synergistic results.

– Social Responsibility – A dedication to the greater good. Community leadership, volunteerism and stewardship are hallmarks of our ability to contribute to public health.

– Diversity – Acknowledging, respecting and valuing differences. An inclusive approach to people, ideas and practice styles includes a willingness to listen to all points of view. The end result is collectively better – because the sum is greater than its individual parts.

Our Strategic Framework

and the process behind it . . .

1. Interviews

2. Survey

3. SWOT

4. From – To

5. Created a 3-5 years Vision

Process Flow Strategy Development Implementation

Strategy Development

Principles of Strategy-Focused Organizations Translate the Strategy to Operational

Terms Align the Organization to the Strategy Make Strategy Everyone’s Everyday Job Make Strategy a Continual Process Mobilize Change through Executive

Leadership

Translatingthe Vision

BusinessPlanning

I. Organizing for Planning and Education (Getting on the Same Page)

II. Buildingthe Base(Creating a Sense of Urgency)

III. Setting Direction(Creating a Clear Vision)

IV. Creating Focus (Identifying Practical First Steps)

WHERE ARE WE GOING?(where do we want to be?)

HOW WILL WE GET THERE? (How do we make it happen?)

WHERE ARE WENOW?(what’s going on?)

WHERE/HOW DO WE BEGIN?

II. Strategic Implementation(Translating the Strategy and Making it Happen)

I. Organizing for Implementationand Education (Getting on the Same Page)

HOW DO WE KEEP IT ALIVE/HOW DO WE OPERANTIONALIZE?

WHERE DO WE BEGIN/HOW DO

WE ENGAGE?

Organizing for Planning• Plan to Plan• Project Launch• Data collection

ImplementationConsiderations

Environmental Analysis/ Business Case

From-To(Gap Analysis)

Implications

UnderstandingChange

Educating and Organizing for Implementation• Context/Perspective• Implementation

Considerations• Readiness

Assessment/Alignment• Action Planning

Implementation/ Integration Plan• Resource

Allocation• Infrastructure

Assessment• Work Structure•

Timeline/Milestones

• Communications Plan

• Market Signals to Monitor

• Assumptions

External Assessment Trends/Drivers ↓ Opportunities Threats Implications Internal Assessment ↓ Strengths Weaknesses Implications

Visioning Exercise/ Scenario Planning

• Initial Positioning Considerations

• Initial Priorities

Vision, Mission, Values

Business Examination

• Current Assessment

• Desired Mix Functionally/ Structurally

Strategy Mapping

Balanced Scorecard

• Strategic Initiatives

• Strategic Objectives

• Balanced Measures and Metrics

• Milestones

Strategic Priorities/Themes

CommunicatingandLinking

FeedbackandLearning

Strategy

The Strategic Management System

Educating for Planning• Context/Perspective

- Strategy Development - Change/ Implementation - Teambuilding• Findings

Values

Mission

Excellence in Dermatology

Promoting leadership in dermatology and excellence in patient care through education, research and advocacy

Patients First Professionalism

Vision

Lifelong Learning Rigorous Inquiry and Creative Work

Collaboration Social Responsibility Diversity

Advocacy Agenda

Strategic Alliances

Unity of the Specialty

Patient Safety Initiatives

Global Leadership

Human Capital

Information/Data and Technology

Infrastructure

Str

ateg

ic

Init

iati

ves Financial Sustainability

and Revenue Diversification

Public/Patient Awareness

Workforce Development

Organizational Capacity

Practice Management Resources

Research and Evidence-Based

Medicine

Outcomes-Based Education

Membership Support

Influential and Trusted Voice

Organizational Vitality

Specialty Leadership

Quality Patient Care

Science and Research

Specialty Positioning

Leadership Development

Volunteerism

Professionalism

Healthcare System and HIT

Transformation

Maintenance of Certification and

Licensure

Practice Advocacy

Member Needs

Key Priorities

Quality and Measures in Dermatology

Setting Direction and Creating FocusAAD Strategic Framework

MilestonesMeasures and Metrics

ObjectivesStrategies and Tactics

CommitteesPriorities Strategic Initiatives

Council on Government

Affairs, Health, Policy & Practice

Council on Education

Council on Communication

Council on Member Services

Council on Science & Research

Development Committee

BODs(incl. Priorities, Strategy, Ethics, Bylaws, ILC, Org

Structure)

Outcomes-Based Education L S

Patient Safety Initiatives L S S

Research and Evidence-Based Medicine S L

Quality and Measures in Dermatology L S S

Advocacy Agenda L S

Science and Research S L

Public/Patient Awareness L S S

Specialty Positioning S L S

Strategic Alliances S S S S L

Unity of the Specialty S S L

Workforce Development L S S

Leadership Development S L (Leadership SC)

S

Global Leadership L S

Professionalism S S S S S L

Practice Mgmt Resources L S S

Practice Advocacy L S

Healthcare System and HIT Transformation L S L

Maintenance of Certification and Licensure S L S

Volunteerism S S S L

Member Needs S L S

Organizational Capacity L

Human Capital S L

Financial Sustainability and Diversification S S L

Information and Technology Infrastructure L

Strategic Initiatives Mapped to Councils/Committees

Moving Forward

1. Planning--Translate the Strategy to Operations• Integration of initiatives• Milestones• Performance Indicators and Measurements

(not just financial)2. Organizing--Align the Organization to the Strategy3. Executing--Make Strategy Everyone’s Everyday Job4. Innovating--Make Strategy a Continual Process

Infrastructure, Capacity and Capital Examination 5. Learning --Renew/review essential strategic

components

5 Principles for Strategy-Focused Implementation

Strategy Execution Program

V.Innovating

Ongoing

I.Strategy

Annual

IV.Executing

Quarterly & Weekly

Four tightly-integrated elements• A Repeatable Methodology• Accountability • A System for Execution• Organizational Learning

VI.Learning

Annual

II.Planning

Annual

III.Organizing

Annual

WEEKLY LEADERSHIP CALLS

Committee Appointment Process

Call for Volunteers

President-electMeetingBoard

Approval

MEMBERACCEPTS!

Overview of Key Responsibilities and New Initiatives

Karen Collishaw, CAE, MPP

Eileen Murray, CAE, MM, CFRE

Sarah Tancredi, MBA, PHR

Confidential Board Webpage

Understanding the Finances of the

Academy

Robert D. Greenberg, MD, FAAD

TAX STATUS

Associations are usually tax exempt under either sections 501(c)(3) or 501(c)(6) of the IRS code.

Under both classifications, the organization is exempt from income tax on income derived from its tax related purpose.

AAD is tax exempt under 501(c)(3) AADA is tax exempt under 501(c)(6)

501(c)(3) TAX EXEMPT STATUS

Benefits:– A tax deduction to the donor for charitable contributions, – Exemption from state taxes (sales and real estate) in some

states, – Exemption from federal unemployment taxes, – Eligibility for reduced postal rates.

Limitations:– Limitations on lobbying expenses – Prohibition against all other political activities. Most of the

lobbying activities are done under the AAD Association.

Requirements:– Carrying out educational, charitable, or religious activities– File Federal and State 990 tax forms each year.

501(c)(6) TAX EXEMPT STATUS

Benefits:– Political activity permitted– No limit on legislative activity as long as it furthers the

exempt purpose– Exempt from federal unemployment taxes– No requirement to dedicate assets

Limitations:– Donations not deductible as charitable contributions– Not eligible for lowest bulk mail rates

Requirements:– Carrying out advocacy activities– File Federal and State 990 tax forms each year.

RESULTS OF TAX STATUS

• You are directors of both the AAD and the AADA.• The AAD and AADA must have meetings that

are clearly designed as separate.• This requires adjourning one meeting to

convene the other, and occasionally moving between them.

• It also requires reaffirming some decisions in the AADA.

FINANCIAL “CATEGORIES”

• GOF– General Operating Fund

• RIF– Reserve Income Fund/Policy

• 50% of our operating budget• $500k – current portion of our building loan payment• Property, Plant & Equipment (PP&E) and Technology funds

to maintain our facilities and our technology needs

• SRF– Strategic Reserve Fund

• Money to cover multiyear projects(see your handout for descriptions on all the Funds)

TYPES OF FUNDS

• Unrestricted– GOF (General Operating Fund)

• Restricted– Temporarily Restricted

• e.g., grants received for a specific purpose and year

– Permanently Restricted• e.g., endowment, contributed by a donor to be invested and

the income to be used for a specific purpose• e.g., corpus

INVESTMENT PORTFOLIO

Equity Fixed

Short Term Policy 0 100%

Mid Term Policy 35% 65%

Long Term Policy 50% 50%

The AAD/A has two investment firms: UBS and JP Morgan Chase (also our commercial banker).

UNAUDITED CONSOLIDATED GOF INCOME STATEMENT AS OF DEC 31, 2010

2011 Budget 2010 Forecast 2009 Actual

Revenue:

Membership Dues $8,737,000 $8,598,121 $8,300,767

Meetings 11,647,015 12,949,293 11,702,400

Sales, Journals & Pub’l 9,624,547 9,012,334 8,446,848

Grants, Contributions, Asset Released

5,473,956 5,247,563 6,112,059

Misc Revenue 738,549 741,243 634,857

Total Revenue $36,221,067 $36,548,554 $35,196,931

UNAUDITED CONSOLIDATED GOF EXPENSES AS OF DEC 31, 2010

2011 Budget 2010 Forecast 2009 Actual

Expenses:

Travel & Mtg $9,335,040 $8,251,290 $8,587,045

Product Development 560,474 528,615 534,819

Consulting 2,736,316 2,966,729 3,034,065

Office Expense 2,999,978 2,776,447 2,727,689

Subscriptions, Ads, Other 2,849,802 2,891,440 2,706,051

Wages & Benefits 15,929,013 15,132,331 14,192,815

Overhead 1,523,475 1,515,519 932,806

Total Expenses $35,934,098 $34,062,371 $32,715,290

FINANCIAL OVERSIGHT

Investments Committee- Oversees AAD/A’s investments- Meets with investment advisors

Audit Committee– Approves year end financial statements– Meets with auditors– Reviews tax returns

Priorities Committee- Reviews budget and determines priorities- Meets in Spring and Fall; chaired by Secretary-Treasurer

Executive Committee/BOD

BUDGET SEQUENCE

• Council, Committees and Taskforces draft tactics for the upcoming year that support the Strategic Framework.

• Based on the CCTF work, staff creates an initial proposed budget which is then reviewed multiple times with their finance staff liaison

• This revised budget is reviewed, meticulously, by senior staff over intensive meetings on a department by department, line by line basis

• Next the Secretary/Treasurers meet with the staff to review and revise the proposed budget

• The budget is presented to the Priorities Committee, who review and revise if necessary

• The budget is presented to the BOD for discussion and final approval

BUDGET SEQUENCE

BOARD OF DIRECTORS

CCTFs &Staff

Secretary Treasurer’s

Meeting

Priorities Committee

Budget dermatitis

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