Legal Obligations – What To Tackle First?

Baord discussionBoards have so much to accomplish during the few hours they are together at their meetings. Whether it is a corporate board, a traditional “nonprofit” board, or the board of a social enterprise, there is the work it takes to aim the organization at accomplishing its mission, and then the work it takes to ensure the organization has what it needs to do so.

Then there are the legal and financial issues boards are required to address – issues like minutes and bylaws and annual meetings, not to mention the budget.

Young organizations who are first establishing those systems normally use common guides for doing so – templates they may find online or from a consultant or from a group like BoardSource.

But when it comes to Creating the Future, our board is not just a board – it is an R&D lab for determining how boards (and leaders in general) can do their work in ways that ensure they are making the world a better place.

That means that when it comes to leadership systems at Creating the Future, there are no templates. There are instead questions about what systems could make possible and for whom; questions about how the board’s involvement in an issue might enhance the organization’s ability to accomplish its mission; and a ton more questions about all the other issues our board addresses!

Knowing this, at its June 2013 board meeting, Creating the Future’s board decided to tackle these issues one by one, mindfully establishing the systems that will guide our decision-making and hopefully provide models for others to use in their own organizations. (See the process we used to make that decision here.) Those systems include:

• Minutes: Beyond the legal requirements, what might the minutes make possible, and for whom? What would the minutes need to be, to accomplish that?

• Annual Meeting: Beyond the legal requirements, what might the annual meeting make possible, and for whom? What would the annual meeting need to be, to accomplish that?

• Bylaws: Beyond the legal requirements, what might the bylaws make possible, and for whom? What would the bylaws need to be, to accomplish that?

• Budget process: Beyond the legal requirements, what might the budget process make possible, and for whom? What would the budget process need to be, to accomplish that?

And that leaves one simple question: Which of these systems should we tackle first, and why? What should we be considering as we decide which to discuss and in what order? And of course – did we forget anything?

We look forward to your thoughts – and your help as we decide.

And we invite you to join us at our meeting on July 8th, to not just see how things unfold, but to add your thoughts. (Learn how to be part of that discussion here.)

5 thoughts on “Legal Obligations – What To Tackle First?”

  1. My suggestion is to start with the bylaws first. They establish the rules of governance (got to know the rules before you play the game), and you may have more flexibility there than you think. Next comes the budget because that will also set parameters you have to live with. Then comes the annual meeting because critically important decision/actions may be taken (subject to the bylaws). Finally, the minutes (but this is not meant to diminish the importance of how you document and maintain and refer back to these important docs).

  2. I jump right to budget. Since the budget is a plan for how you want to allocate resources to create opportunities it can be co-opted to include serious conversations about the opportunities your organization is facilitating for the community; the approach (theory) you plan to put in play to make that happen; the programs that manifest from this approach; the business structure that has to be in place to support the work; and resources you can generate and allocate along the way.
    I am coming to believe that a rich (not rushed) budgeting process encourages consideration of the entire organization from staffing to mission and forces us to see the entire system that is our organization. In so doing, it encourages the highest level of fiduciary thinking.
    Bylaws are next for me, and it seems that you could really use them as the document record of how you want to interact and work together as a board. I like the idea of first thinking about what would make board service inspiring and fulfilling and how it can create opportunities for individual and organizational success, and then figure out the language that holds people accountable to that – then you have bylaws.

  3. As I was reading the article, I put the items in the exact order that Gene did. I agree that the bylaws set the stage for governance going forward and the development of them helps the board to decide the parameters in which the organization will operate. The budget – along with subsequent financial reports – is an important tool in assuring that the board is carrying out its fiduciary responsibilities. The annual meeting not only serves as a forum to reflect on past successes and challenges but also to set the stage for the coming year.

    I have a great template for minutes that I’d be happy to share. It allows the minutes to become a very useful tool that clearly identifies key discussion conclusions, action that was taken, and follow-up that is needed (and who is responsible for doing so).

  4. “I agree that the bylaws are the first priority. The second priority — strategy analysis and review — should be added to the list. Strategy comes before budget because the budget is used to help execute the strategy. Strategy is connected to the board’s fiduciary duty of care. The board members must fulfill this duty when reviewing and approving material strategic decisions of the corporation.”

    Douglas Park

      This comment was emailed to us by Douglas Park, who (because of technical difficulties on our end) wasn’t able to post it here. Sorry about that, Doug – and thanks for persisting AND notifying us of the problem!

Leave a Comment