Nonprofit Board 101 – Accountability

“My board shows all the signs of NOT being ready to recruit. So what do we do?”

That question came from a reader of my Board Recruitment & Orientation workbook.  She was responding to a chapter that lists indicators for whether or not a board is ready to recruit.  (There is a similar article at our site, for reference as a checklist.)

So I thought it would be helpful to use the blog as a way to address those indicator issues, one at a time over the next several weeks. (And to those readers who are excited about addressing arts issues, from my last post, we will do both – not to fret!)

First up on the hit parade: Accountability

Knowing What the Board is Accountable For
From the chapter in the book:

“If the board doesn’t understand that it is ultimately accountable, and doesn’t understand how to put that accountability into practice, you are not ready to recruit.”

What to do? The following are discussion questions for your board, to provide them with different ways of considering “accountability.”

Following those questions are some steps the board can take to move forward.

NOTE: For the richest learning for the board, do not show them the “answers” before they have the chance to come to answers for themselves.  Stop “teaching” and let them learn.  These steps are a guide, in the event the board gets stuck.  But if what you are seeking is transformation, let the board find their own answers first.

1: Who owns your organization?

Depending on your answer, here is a follow-up question: Who owns your organization according to the IRS (or other taxing authority that provides exemption, depending on the country you are in)?

Once you know who owns the organization, for every decision the board is about to make, they can ask this question: “How will this decision affect the ‘owners’ of this organization?” If the answer is not what those owners would want to hear, the accountable choice is to reconsider that action.

2: What systems does your board use to hold itself accountable?

Systems are methods for turning intent into action, that live beyond just one individual. Board systems include the board’s agenda, its minutes. Board policies regarding how decisions are made. Systems for annual planning, and systems for monitoring progress on those plans.  An annual calendar that says, “Every year in May, we do X.  Every July, we do Y.”  Do all those systems aim at accountability? If a stranger read your meeting agenda, what would they think you are holding yourselves accountable for?

Board systems also include your annual planning itself. Is that planning proactive – encouraging good circumstances while discouraging potentially harmful circumstances?  Or is it primarily reactive?  Which of those two planning systems leads to acting accountably, and which will lead to always putting out fires?

3: Does your board have a board position whose responsibility is simply to keep discussions focused on the things for which the board is accountable?

This is another system approach – an easy one to institute, and a fruitful one for the board’s accountability.  The board president / chair of the meeting has a specific job – moving the meeting’s agenda forward, making sure everyone has had a chance to address the issue, etc. Because of that, the chair cannot also be on guard to be sure the board is discussing things in light of their accountability to the community (yes, that is the answer to #1, in case you had not figured that out).

This is a GREAT job for the immediate past president – a position that is generally squandered. This person has more knowledge of the organization, the community, the mission, the history than most of the other board members. So make your past president the monitor to keep the board on track for its accountability to the community.

4: What is your board currently holding itself accountable for?

There are four functions for which every board is accountable:

• Leadership in providing benefit to the community
• Legal oversight
• Operational oversight
• Board mechanics – the day-to-day work of the board

Some boards focus more in some areas, less in others. What area are you currently focusing your accountability on? What areas would you like to be focusing on? What area would your community want you to be focusing on?

5: How is your board currently holding itself accountable for Creating Community Results (see the first bullet item under #4 above)?

Accountability is about ensuring – being proactive, encouraging and preventing, rather than reacting. And the only way to do that is to annually create a plan that proactively aims at the community results you intend to create, and then monitoring monthly to ensure those results are happening.

6: How is your board currently holding itself accountable for Legal Oversight (see the second bullet item under #4 above)?

If your organization does not have an attorney and an accountant to guide its activities and keep you legal, find those people and get their help in teaching you what to focus on from the legal perspective.

And do NOT seek that assistance pro bono, for a million reasons. Put their fees in your budget and pay them for their best professional knowledge. Have them teach the board what to look for from a strictly legal perspective.

7: How is your board currently holding itself accountable for Operational Oversight (see the third bullet item under #4 above)?

Again, proactive accountability in this area means planning and monitoring. If your board is not planning every year for how the operations will accomplish what it needs to; and if the board is not planning every year for how the operations will prevent undue risk and liability in all areas of the organization; and if the board is not monitoring the results of that plan monthly – well then I can guarantee you will be putting out fires.

If you are not doing this planning and monitoring, how do you know what should / should not be included in the budget you are voting on? (And if you vote to approve a budget that is not based on a proactive plan – either for community results per #5, or for operational results – is that acting accountably?)

8: How is your board currently holding itself accountable for that last bullet item in #4 – Board Mechanics? How does the board ensure it has everything it needs to do its job well?

There are two steps we use with boards in this area. The first is to facilitate a discussion from the board about where they believe the board needs assistance with its day-to-day work. That is generally a terrific discussion, as it brings up all the things board members worry about but don’t generally discuss aloud.

The second step is to budget for that work. The board is accountable for the workings of the entire organization. If your organization is not budgeting at least 1% of its budget to ensure the board knows what it is doing, is that acting accountably? (And I use 1% because it is the smallest whole number I can come up with, and because most boards don’t even budget that!)

1% of a $1 million budget is $10,000. If your board is not budgeting even just 1% of the budget to ensure the board is accountably keeping the organization both moving forward and out of trouble, how will you accomplish what the organization needs you to accomplish?

(That is not a rhetorical question – answer it.  And if your answer is, “We can’t afford it,” realize that that is not an answer to this question.  The question was not, “Why can’t you?” but “How can you and how will you?”  So go back and answer the question precisely as it was asked:  How will you ensure your board has what it needs to do its job?)

That’s it for this first stab at helping boards move beyond “Not Being Ready to Recruit.” If a board does not know what it is accountable for, and has not made attempts to find out, then recruiting new board members to that old mindset will simply perpetuate bad habits.

If anyone has any other suggestions for questions boards can ask themselves to get them to consider what they are accountable for (or if you are a consultant, questions you ask boards), please join in!

* While the title of this post includes the word “nonprofit,” we prefer the more affirmative and declarative term, Community Benefit Organization.  So why use the word “nonprofit” in the title?  Find out here.

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