Category Archives: Boards of Directors

Hallmarks of Effective Nonprofit Boards

Without an effective board of directors, it is virtually impossible for a nonprofit to sustainably and successfully carry out its mission.  But what does an effective board look like?

An effective board of directors is:

Well-informed and prepared.

  • Directors seek and obtain sufficient information on the issues; consult experts as needed; receive training on governance and on the specific area of the nonprofit’s mission.
  • Agendas:
    • Are thoughtfully prepared, in collaboration with the executive (if any).
    • Include detailed action items, with proposed motions where appropriate.
    • Are strategic rather than operational; that is, the action items do not deal with day-to-day operations, but with long- & short-term goals, programmatic outcomes and impact, and policy development; action items are high-level, impacting the entire organization.
    • Make use of consent agenda to dispose of routine matters.
    • Delivered at least a week in advance of meeting.
  • Agenda Packets include:
    • Minutes of the prior meeting;
    • Financial reports, such as cash flow;
    • Committee reports;
    • Background information and other materials related to agenda items.
  • Directors attend board and committee meetings fully prepared to discuss the agenda items before them; that is, the contents of the agenda packet have been read and digested thoroughly before the meeting.
  • Directors understand and embrace their fiduciary duties to the nonprofit.
  • Directors embrace their oversight role—know the organization, understand its programs, and analyze its effectiveness.

Actively involved, meeting regularly and as often as needed to guide and oversee the nonprofit, with meetings focused on deliberation and strategic action.

  • Regular meetings occur monthly or at least bimonthly. Larger boards may meet quarterly, using committees effectively between board meetings.
  • Attendance is well in excess of quorum at each meeting.
  • All officers are in attendance at each meeting.
  • President/Chair manages the meeting, ensuring everyone speaks & expresses opinions, insights, ideas. The President/Chair should not dominate the discussion (in some organizations, the person presiding is required to remain neutral), but should encourage fair and balanced discussion.
  • No one is reading materials for the first time during the meeting; the minutes are not read during the meeting; no regurgitating of committee work. No wallowing in the details!
  • Thorough discussion of issues takes place, with all views and perspectives brought forward; additional information sought as needed.
  • Directors listen to each other, instead of talking at each other.
  • Every meeting includes substantive discussion followed by motions.
  • Some type of protocol for the conduct of meetings is helpful and may be developed by the board for its own use. (Robert’s Rules of Order is not required, and because of its complexity, is not recommended for most boards.)

Active in the nonprofit’s behalf outside meetings.

  • Directors exploit their networks to advantage the nonprofit, offering access to influencers and opportunities that will help the nonprofit carry out its mission.
  • Directors actively & affirmatively represent the nonprofit to the larger community.
  • Directors own the process of identifying, recruiting, and orienting new board members, to ensure that the board possesses needed skills, knowledge, and abilities, and appropriately reflects its community.

In partnership with staff and key volunteers; directors:

  • Plan for the organization’s future.
  • Lead in resourcing the organization—fundraising & other revenue streams.
  • Address programmatic impact and outcomes.
  • Recognize policy issues and develop policy for the organization, leaving procedural details to staff.
  • Use committees and staff effectively, accomplishing essential information-gathering, analysis, and recommendation development in committees.
  • Understand the distinction between board work and staff work.
  • Supervise the executive director.

How does your nonprofit board of directors measure up?

What is a Quorum and Why Does It Matter?

Do you know what your organization’s bylaws say about quorum? If you know where your bylaws are, it may be a good idea to check!

“Quorum” means the minimum number of people that must be present for a body to transact business.    Generally at the beginning of every board of directors meeting, the secretary takes attendance and determines whether a quorum is present, according to the terms of the organization’s bylaws.

The bylaws may specify, for example, that quorum is the “number of directors present at any meeting”  or the quorum may be set at a specific number.

Massachusetts statute states that the quorum for a nonprofit board of directors is “a majority of the directors then in office”, unless the bylaws specify a different number. Where the bylaws specify the quorum, the bylaws govern.  If the bylaws do not specify the requirement for quorum, then the Massachusetts statute serves as the default—“a majority of the directors then in office” is the quorum.

It’s essential to remember the context for this issue of quorum. Boards have oversight of their nonprofits; and boards can only act collectively and only in the presence of a quorum. The entire board should be making the decisions that will impact the nonprofit, and this responsibility may not be left to the few. Indeed, in organizations with executive committees, the board still must assert its oversight over the acts of the executive committee, through review and ratification. Charities must serve a public interest, and if the body actually doing the governing is too small, private interests may easily take over.

Occasionally failing to meet quorum  requirements is not a problem.  But remember that failing to meet quorum means that no business can be transacted, so even occasionally lacking quorum can cause substantial problems, should the agenda call for a key business decision.

Failing to meet quorum, if it happens frequently, is symptomatic of deeper problems. Sometimes boards respond to this problem by amending their bylaws to allow for a smaller quorum.  This is not necessarily the best solution, since it can result in the organization being run by a small clique, leading to further disengagement of the other directors.  In the same way, making the board of directors itself smaller may not be the best solution either. Depending on the organization’s work, a larger board may be the only way to ensure adequate oversight of the nonprofit (for more on board size, read this post). Nor is the creation of  or defaulting to, an executive committee the solution, for the same reason.  The best strategy is to grapple with the real problem—why board members have become disengaged.

The quorum rule also applies to members’ meetings—that is, meetings of individuals who are legal voting members of the organization. This body of members is in effect another level of governance hierarchy, and some different rules apply to them, and again, this a matter of state law.

Quorum is a concept directors of nonprofits must understand. It’s also one of those concepts that is often overlooked or ignored when things are proceeding smoothly but which can upset the organizational applecart when there are bumps in the road.

How many board members should a nonprofit have?

This is often one of the first questions I am asked by clients who are forming nonprofit organizations. I usually begin my response with the typical lawyer answer, “It depends.”

The board of directors (board members are properly called “directors”) by law holds all the authority of the nonprofit corporation. Individual directors have a fiduciary relationship with the nonprofit—they are bound at all times to uphold the best interests of the nonprofit. The board must oversee all the activities of the nonprofit, develop the nonprofit’s strategic direction, set policy, and generally lead the organization as it carries out its mission. This is a lot of responsibility.

Independence of directors is essential—independence of thought, as well as independence in the sense of freedom from direct or indirect conflicts of interest. For this reason, best practice requires all directors to be independent of each other—that is, unrelated as to family or business relationships.

Initially, to form the nonprofit, three directors are sufficient. In fact, in Massachusetts, one person is sufficient to form a nonprofit corporation, but this is not recommended for a nonprofit that plans to seek tax-exempt status. But to actually move the nonprofit assertively into its mission, more will be required.  Moreover, if the first three directors are the founder plus a colleague and a family member (often the case at initial start-up) for example, additional directors should be added to offset these relationships.  To concentrate the power of the nonprofit in one or two or three individuals who, because of their relationships, effectively constitute a voting block, subjects the nonprofit too strongly to their private interests.  Charities, as the IRS has pointed out, must serve a public interest—not a private interest.

The next consideration is the size and scope of the nonprofit. A new nonprofit with one primary activity and no staff can manage satisfactorily with five directors, for example. A large, established nonprofit with staff and a range of programs, strong fundraising and multiple funding streams, and a board that is fully engaged in strategic planning, will need many more board members—perhaps 12-15 at least, possibly more.

Another key consideration is the need of the board for a variety of skills, experience, and contacts, and for a generally diverse make-up. Boards should reflect a range of skillsets, experience, and preferably multiple and different networks of contacts that can be used to the benefit of the nonprofit. For some nonprofits, a board that is representative of its community is crucial.  Does every board need directors who are accountants and lawyers? No. But some financial savvy is essential, along with analytical ability, networks of contacts, and subject matter expertise. If the nonprofit’s board is only three individuals, is all that likely to be covered?

Boards of directors are not static. A board is never finished, set, complete. Boards are more like living organisms—they are born at the time of corporate formation, they grow and develop; they change over time. Indeed, a nonprofit whose board is unchanged many years after formation is likely stagnant, stuck, unable to move forward.

So how many board members does a nonprofit need? The short answer is, “Enough to get the job done.”

Robert’s Rules Not Needed

From time to time when working through bylaws with a client, someone will say, “Shouldn’t we put something in about Robert’s Rules? Don’t we need to use them?”  To which I will usually reply, “No.”

Robert’s Rules of Order was written by Brigadier General Henry Martyn Robert in 1876, right here in New Bedford, at the First Baptist Church on William Street.  Gen. Robert felt compelled to write the Rules allegedly because he had failed miserably in leading a meeting at the church.

A couple of principles underlie Robert’s Rules.

First is the idea of control.  The Rules are intended to allow the Chair to control a meeting, to lead it.  We’ve all been in meetings that have devolved into free-for-alls with everyone talking at once.  The Rules allow the Chair to conduct the meeting much as an orchestra conductor does the orchestra, mellowing the louder strident voices, bringing forward the softer notes.

Another key idea is that of deliberation. The Rules are intended to enable a Board–a “deliberative assembly”– to conduct an efficient meeting; the idea is to allow for evaluation of information and opinion, while ensuring that all pertinent views are heard; the result is that decisions on matters simple to complex can be made efficiently.   The law values this deliberation highly–this is why boards must meet and act together, and why all directors must be able to hear each other in a meeting. The Chair must foster this deliberation through his or her control of the meeting, ensuring that all those who have something to say pertinent to the decision at hand may speak and be heard.

Robert’s Rules are just that–rules.  The book is over 600 pages long.  Robert set out to provide a few rules by which to conduct an efficient meeting, but the project soon took on a life of its own, as questions arose and were answered. Today, a number of shorter versions are available–”cheat sheets” and quick reference sheets, along with the official Robert’s Rules of Order Newly Revised In Brief, which itself runs to about 200 pages.

And that is the problem.  The Rules are complex, and they must be thoroughly understood to be effective.  Unless your organization has someone willing to serve as Parliamentarian and to master the minutiae, the Rules are likely to be more burdensome to your organization than helpful, more time-consuming than time-efficient.

The typical nonprofit board of directors with its 7 to 15 directors does not need Robert’s Rules.  Instead, I propose the following points:

  • Choose a Chair who can maintain firm control of a meeting; that is, someone who is willing and able to ask the long-winded directors to stop speaking so the more reticent can get a word in edgewise, as well as to methodically invite those reticent souls to speak to the issue.
  • Lay down basic values: that participation is required, that all comments on topic are valued, that each director must respect the rights of the other directors to have their opinions and to voice them, that meetings will be civil and courteous. Your board will likely find a few key values of its own.  Put them in writing and adopt them, or ask all board members to sign off on them as part of their orientation to the board.
  • Develop a simple protocol that works for your board: No one speaks unless recognized by the Chair; everyone with a pertinent comment on the issue will be allowed to speak; no one will speak for more than 3 minutes at any one time (or however long is appropriate to your board, depending on its size, time allotted for meetings, and the like); etc.  Again, adopt it and include it in orientation materials.
  • Require that motions be stated as simply and precisely as possible, and that they are repeated as needed, to facilitate discussion and for the Secretary to accurately capture them.
  • Eliminate lengthy reports; provide them instead in writing to directors prior to the meeting.  If everyone has read the reports prior to the meeting, the board can cut to the chase and discuss the issues that need action.
  • Set expectations. That everyone comes to the meeting, and comes prepared –to speak, listen, debate, and decide.

This is not to say that your organization will never need Robert’s Rules–it might.  If your organization finds itself continuing to update, revise, and tweak its self-created protocol because none of its rules covers quite every situation, if meetings still get out of hand such that decision-making suffers, it may be time to try Robert’s Rules.  Study them.  Test them at several meetings.  But don’t add them to your bylaws until your organization is willing and ready to commit to them.

Getting the Right People for the First Board of Directors

When you begin to think about forming a nonprofit organization, one of the first things to consider is the people you will need to help you, and most importantly, the people who will work with you from the beginning, who most likely will evolve into your board of directors.

Nonprofit organizations are required by law to have boards of directors, who are charged with fiduciary duties of care and loyalty to the organization, and who have oversight over the entire operation of the nonprofit.

For most small start-ups, the first board of directors may not meet the textbook ideal.  Your first board may consist of you and a couple of friends and maybe a work colleague or two, if you’re lucky enough to have that many people at the outset.  Many boards start off with a husband and wife and a friend or another couple.  And while this initial group may be passionate and committed to the work of the organization, board development must not stop here.  More minds and hands will be needed, analytical thinkers, able—and willing—to ask the hard questions as the nonprofit grows and develops.

As you think about your nonprofit, you might begin by thinking, “Who do I know with deep pockets?”  But that isn’t the best place to start. Instead, think about the skills and abilities the nonprofit’s formation and operation will demand.  For example (and this is certainly not an exhaustive list):

  • Persistence, detail-orientation, zeal
  • “People skills”, entrepreneurship
  • Math skills, financial, bookkeeping, Excel
  • Time management, project management, organizational, planning
  • Persuasion, fundraising, sales
  • Supervisory, personnel/human resource management
  • Verbal, writing, communication
  • Technical, computers, email, word processing, spreadsheets, social media
  • Subject matter expertise

Do you have all these skills, personally?  Probably not; none of us have all of them.  But the Board of Directors—as a whole— needs to have all of them.

The question I am asked most often (after “Do you do grant-writing?”) is “How do I get board members?”  How do you find people with the skills you need?

Talk to people.  Board recruitment, at its most basic, starts with talking to everyone you know.  Notice those for whom your idea seems to click.  Don’t invite these people onto your board immediately.  Instead, start a list, noting the skills you believe they would bring to your organization.  Then follow up with them, invite them to coffee “for an update” or “to tell you more about what I’m thinking”.

Of course, much more must be done to recruit—and keep on recruiting—good board members, and indeed, entire books have been written on the topic.

One way to find both board members and volunteers is through posting your organization’s needs online.  For example, here in SouthCoast, through the region’s United Way agencies, you can post both your organizations volunteer needs and your activities.  Check out Volunteer SouthCoast here.

Once you’ve connected with people who might be good board members, you—or your present board, if it exists yet—should develop a process, rather like a job recruitment process, to get to know prospective board members better; this is especially important if neither you nor your current board members know the person well.  This might include a formal meeting, asking for a resume, maybe a questionnaire; it also might include having the prospective board member join a committee or help with a project, both good ways to assess a person’s fit with your organization. Only when you’re satisfied that the person will be a good addition to your board should you (or your board) invite him or her to join you.

While the need for board members may be critical, it’s important to move slowly, to ensure good fit and commitment—after all, this is someone you hope to be working with for a long time!

If you would like to learn more about boards of directors, I will be talking about nonprofit board governance at following upcoming programs :

  • Tuesday, March 18, at the Fall River Boys & Girls Club, 6:00 pm
  • Thursday, April 10, at the Waypoint Event Center, New Bedford, with Craig Dutra of the Community Foundation of Southeastern Massachusetts, 5:30 pm. Click here for more info.
  • Tuesday, April 22, at the Legal Center for Nonprofits, New Bedford, part of the Nonprofit Start-up Series, 6:00 pm. Click here for more info.