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Five Governance Fails You're Probably Doing Right Now

Posted By Paul Hanscom, Tuesday, September 16, 2014
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Let’s face it; it’s easier to stick to the status quo and not make waves if things seem to be working well for your board of directors. Other board members are familiar with the status quo. Presumably previous board members thought long and hard about the organization’s governance model, and this is what they determined to work best. Who are you to question their work? Besides, nothing’s broken… or so it seems.

The truth is that change can be healthy, especially if that change is called “growth” and your board needs to modernize and adapt to it. It’s a good practice to review your governance practices, policies, and procedures on an annual basis. Here are a few of the most common ways organizations fail to modernize their governance practices:

  1. Make board member orientation a one-time activity

    It takes a team to create a strong board and, in particular, to orient new board members. Senior members of the board need to provide consistent, detailed orientation to newer members. Additionally, each individual board member must take the initiative to continue his/her development throughout the term in office.

    Video-supplemented orientation can be a user-friendly training and development tool that busy volunteers access when it fits their schedule – both at the start of their terms as well as throughout as a reference tool. A great approach is to develop a series of short videos with each episode focusing on a different area of board development – reading financial statements, policies, and the general culture and functioning of the board (how they get things done).

    This offers your board a more thorough approach to orientation for new board members and a consistent base of expected knowledge and context for board discussions. Having videos online and easily accessible means board members can view and review the information whenever they like. It also is a more personable approach than handing someone a manual of printed materials and saying, “read this.”

  2. Review meeting minutes, financial statements, and committee reports in-person at the board meeting

    Don’t spend time and effort as a board presenting reports to one another and diving into the weeds on items that should be addressed by committees outside of a board meeting. This approach focuses internally on the logistics of the organization’s operations. Board meetings should focus on looking forward and tackling matters that affected your member community and your organization’s role in it. Implement a consent agenda, have reports submitted in writing in advance of board meetings and get board members to agree to review these materials before arriving to the meeting.

    A consent agenda empowers your board to get its hands around the steering wheel and start driving its own path.

  3. Present financial statements to the board and call it a “treasurer’s report”

    Numbers rarely tell the whole story. It is always helpful to provide context for board members or anyone reviewing financial statements for the organization. A one-page treasurer’s report helps focus the board’s attention and time on areas where the organization is performing significantly better or worse than budgeted. The report should depict recent financial performance, annual performance relative to the YTD budget, and a few brief bullets highlighting what board members should be attuned to. This results in fewer questions about the financial performance of the organization as a whole and clarity about where board members should direct their attention when reviewing the financials.

  4. Develop a strategic plan and annual goals, then wait until the end of the year to check in on what actually happened

    Now that you’ve cleared your board agenda of basic reporting functions, the real work is to focus on future direction and opportunities that your board members never knew existed. Boards should develop a plan that has objectives that cascade upward to organization goals, vision, and mission. At each board meeting spend a few minutes:
    • Reviewing high-level targets,
    • Addressing progress or changes since the last meeting, and
    • Discussing what, if any, board action is required to facilitate continued progress by the implementing levels of the organization (i.e., committees and staff) toward fulfilling the mission.

    Too often, strategic planning means prepping for and executing a board retreat and nothing more. It means taking a snapshot of myriad data points from your stakeholders, synthesizing these data into a story you share with key decision-makers and creating the ever-coveted “Strategic Plan” document. That’s it. The true power of strategic planning is the follow through. How are staff, volunteers, funders, and those in the community made and kept aware of this strategic plan and how it will impact them? The plan needs to be communicated broadly to all stakeholders and a system needs to be in place to keep it in front of them throughout the year.

    One organization I work with includes its mission and vision on every board agenda and addresses the strategic plan at every meeting. Each of its committees has relevant goals and objectives on every meeting agenda as a reminder of the overarching purpose for which the volunteers are meeting so they keep their end-game in mind on an ongoing basis. Each year the executive director and key staff from each department build a work plan through project management software that starts with strategic targets for the year and drills down to what needs to be done quarterly, monthly and even daily in order to make sure the strategic plan is manifest through their work.

    As a result, the organization has seen clearer, sustained alignment of the many parts that make up the organization. Everyone is rowing the boat in the same direction.

  5. Set objectives that are vague and let the staff and volunteers figure out the details

    Objectives are the true measure of effective implementation of a strategic plan. If you do not spend the time to carefully craft sound objectives, then you risk losing your trajectory as an organization and your stakeholders’ accountability to advance the organization's mission as the board sees fit.

    By creating SMART objectives, an organization’s staff and volunteers are able to assess progress toward their objectives throughout the year and make changes if necessary to make sure they deliver by the end of the year and, if not, they know why and adapt programs for future implementation.

    Two potential outcomes from using and communicating SMART objectives are more focused engagement by volunteers and an increase in funding from sponsors who have a better understanding of what specifically their investment is being put toward.

These are just a handful of ways that organizations fail to make the most of resources, volunteer time, and technology to function at their best. If your organization has similar outdated governance practices, make a point of discussing them with leadership and find a way to improve. Your organization and your colleagues will be better for it.

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