In preparing materials for a class on “Catalytic Thinking as a Path to Board Effectiveness,” we asked a group of consultants to name the biggest problems they encounter with nonprofit boards. We then added to that list the results of a Google search on “biggest problems with nonprofit boards.”
The sad part about this list is that it is no different, not even by a tiny fraction, than the problems boards have been encountering for decades. When problems are this pervasive, across so many boards in so many different countries around the world, this is a systemic issue – a system that is clearly not accomplishing what organizations and our communities need from all those thousands of people sitting on all those boards.
Once again, the answer will not be found in trying to fix any one of these issue head on. The answer will be found in asking questions that lead us to create what is possible. Which is why we are designing a class to address “the problem with boards” via the questions of Catalytic Thinking.
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Top 10 Nonprofit Board “Worst” Practices
By Marc Rand, July 15, 2019 Blue Avocado
1) Not knowing what the organization does: Believe it or not, I’ve worked with some boards that didn’t quite understand the nonprofit’s core mission, and some in which board members focused on a favorite program instead of the entire picture of the organization. Neither serve the organization well. Encourage new board members to learn the organization’s elevator pitch so they understand how best to describe what its focus is and how all the pieces fit together.
2) Having a Big Ego: A board member may be a master of the universe in their day job, but as a board member they may not know the full extent and complexities of the cause. So, keep in mind you may notbe the smartest person in the room. Listen and ask questions versus telling everyone what to do. You’re a board member, so guide the organization, do not make commands or edicts. And remember: the organization is not your company or anyone else’s. You do not own the organization, you serve it.
3) Diving into operations and getting too into the weeds: This one is for all of my eager beaver board members. Thank you for learning about the organization, truly. But it likely does not help your nonprofit for you to know every single iota of detail regarding its operationsunless you’re looking for a job. Remember, particularly if you’re a board member of a nonprofit with paid staff, stay at the strategic level. You’ve hired an ED who has hired staff to help implement the vision and mission you’ve helped to craft. Trust they’re going to excel at their jobs.
4) Arriving late to the party: We’ve all been on committees that require months and months of discussion. These processes, while sometimes painful, typically yield strong buy-in at the board level, and more importantly, provide thoughtful direction to the organization. That said, I’ve also seen situations where board members who have not participated in the discussions insert themselves at the last minute, believing that they have an original idea the committee actually discussed months ago. It’s great to ask questions, but please be inquisitive versus assuming your peers have not already had multiple discussions about your big, new idea.
5) Not asking questions: We’re all different; some people are introverted, some blurt out thoughts and questions, and some send thoughtful emails pre/post meetings. In any event, you should never feel scared to ask a question. Likely if something is unclear, others may not understand it as well. Asking for clarity is well worth the five-minute pause it takes to ensure everyone is on the same page.
6) Not understanding the financial model: While financial analysis may not be part of your day job, please, please, please, make sure you understand the nonprofit’s financials and business model. Do notleave this work to the finance committee. Ask questions and make sure you understand the financial health of the organization; in fact, this is part of the fiscal responsibility legally assumed by all board members. I work with several organizations helping to create financial dashboards that provide quick, visual snapshots of financial health. These can be effective tools to help board members understand the financial realities of the organization in a visual way as opposed to staring at confusing financial statements. I always suggest that every board can benefit from a financial dashboard that includes liquidity, leverage, and budget to actual performance indicators.
7) Pushing pet projects: Some board members fall in love with a project or program after a site visit or presentation and try to put it ahead of overall organizational goals. I’ve also seen board members try to hijack a strategic planning process by inserting their “brilliant idea.” Be careful not to push your own idea without reconciling it with the overall mission of the organization.
8) Not evaluating the ED’s performance: One of the most basic functions of a board is to evaluate the executive director’s performance annually. Be open and honest with your board members and recognize that an ED with strong support, guidance, and direction from the board will likely perform better. And while it’s great to give support, make sure you share areas where the board sees opportunities for improvement. Have a healthy dialogue around what can be done better, and how the board can support this. While you’re at it, you should also definitely consider evaluating the board’s performance too.
9) Not promoting your nonprofit to funders and others: You were likely invited to join the board due to your leadership in a similar industry, specific sector knowledge, and/or connections to donors and funders. Again, ask the marketing team or ED for the elevator pitch or guidance on how to make a specific ask, or make it clear if you’re not comfortable asking and offer to open doors, thank existing supporters, and embrace other methods of advancing fundraising efforts. Either way, fundraising for your nonprofit is one of the core responsibilities of every board member.
10) Assuming you know the lives of your members and beneficiaries: This may be the biggest no-no of all. I’ve worked with several boards for nonprofits that support low-income families. During one meeting, a board member was describing to me “how a poor person should spend their money.” This person went on to tell me their values and how wealthy they are, and that if people would just work hard and spend money wisely, then they wouldn’t be poor. After I counted to ten and breathed calmly, I engaged with this person a bit about how someone with wealth may not know the true challenges a lower-income family may face. The point here is, be respectful and learn about your constituency and what the beneficiary’s lives are like, and never assume you know what they need. You may want to consider creating a board seat for a community member to ensure the nonprofit’s strategies are grounded in reality and that you can benefit from this critical firsthand perspective. Of course, one person cannot represent an entire community, but hey, it’s a start.
Top 15 Non-profit Board Governance Mistakes
By Ellis Carter, February 20, 2022, Charity Lawyer Blog
- Failing to Understand Fiduciary Duties
- Failing to Provide Effective Oversight
- Deference to the Executive Committee, Board Chair, or the Organization’s Founder
- Micro-managing Staff
- Avoiding The Hard Questions
- Insufficient Conflict Management
- Lack of Awareness of Laws Governing Tax-Exempts
- Operating with Outdated, Inconsistent Governing Documents
- Airing Disagreements Outside the Boardroom
- Failure to Cultivate Board Diversity
- Recruiting and Selecting Board Members Without Due Care
- Failing to Educate and Motivate Board Members
- Failing to Document Actions Appropriately
- Failing to Review Program Effectiveness and Efficiency and Take Appropriate Follow-up Actions
- Failing to Hold Executives (and Nonparticipating Directors) Accountable
Top 5 Mistakes of Boards
By Charitable Allies, September 2023
- Failing to monitor programming effectiveness or make course corrections
- Not wrestling with tough questions
- Not keeping board level confidences
- One person (or a small group) running the show
- Not holding executives and inactive directors accountable
Spotting and Fixing Dysfunctional Nonprofit Boards
By Alex Counts, October 5, 2020, Stanford Social Innovation Review
Three main types of unsuccessful nonprofit governing bodies:
Rubber Stamp Board. This type of board approves whatever management proposes and often plays the role of cheerleader. These organizations tend to be run by charismatic chief executives who value their autonomy and assemble a board with the expectation that its members are compliant and mainly serve as “window dressing” to reassure external stakeholders.
Micromanaging Board. This board takes on key management functions in addition to its proper governing role. The staff becomes disempowered and often passive (or passive-aggressive) in the face of repeated intrusions into what they rightfully expect would be their areas of authority.
Balkanized Board. These boards consist of people who are concerned about only one part of the organization—often the program they support financially. They typically avoid trying to see how all the pieces of an organization fit together, leaving that task solely to the chief executive. The fragmentation can be dangerous when an organization’s revenues shrink and priorities must be reevaluated quickly and holistically.
Red flags:
- Misplaced Loyalty | Board members’ first and highest loyalty must be to the organization and its mission. While this sounds obvious, it is not always the case. I once took part in a board retreat where, in the opening session, most members made expressions of loyalty to the founder and the executive director (ED) the centerpiece of their self-introductions.
- Usurping Management Functions| Board members who volunteer to work alongside professional staff can amplify a nonprofit’s work and gain a deeper understanding of the organization. But when this devolves into them bossing the staff around, making decisions on the staff’s behalf, and providing the board negative evaluations of employees based on potentially brief glimpses of their work, it can create a toxic environment and lead to team members becoming passive, secretive, or demoralized.
- Unexamined Performance | If you serve on a board and have no idea how others view your participation, and have no means of giving feedback about the prevailing culture, expect trouble.
- Stifled Dissent | Minority views and skepticism should be welcomed around the board table, with all members encouraged to speak their minds and vote their consciences, even if this creates tension. Passionate debate and non-unanimous votes are a signal of a strong, not weak, governing body.
- Tolerating Misbehavior | More than once I have observed people behave unprofessionally and even unethically around a nonprofit board table in ways that I doubt those same people would ever do in a business setting.
- Accepting Balkanization |Board members can bolster organizations by overseeing parts of them in which they have special interest or expertise, but they should not ignore the rest of what the nonprofit does. If they do, they may advocate only for their pet projects or disparage other undertakings that appear to compete for attention or resources.
And now, from the consultants we asked:
- Commitment/buy in to the success of the organization. I know you’re a volunteer, but if you say you’re going to do something, do it!
- The biggest problem with boards is how they are (too often) recruited.
- First, if it’s just a small circle of friends it is self-replicating with little diversity of opinion or background, and rarely representative of the people the charity serves.
- If there is any voting, say at an annual general meeting, it is with a preferred slate, not clear choices reflecting various options.
- Second, they often are not selected based on specific skills needed.
- Third, they are misled on the amount of time and work required, and their responsibilities. Later people are annoyed that they aren’t living up to the (unstated secret) expectations.
- They usually don’t receive job descriptions, and therefore are not evaluated for actual performance. They stay until their term limit expires, good, bad, or indifferent. They often don’t receive training or proper on-boarding processes, so they don’t understand the unique roles each board member should play, or they challenges in the organization.
- Understanding a board role vs a volunteer role; understanding how board and ED work together and differences in roles; finding skilled board members; moving working board to professional board
- In an all-volunteer organization, realizing that the board’s role goes beyond governance to recruiting, managing and leading volunteers within the mission-focused work.
- Boards that forget that Obedience to the mission is as important as Care of the assets. Sometimes you have to take risks and invest in new ways to serve your clients/patrons.
- Power dynamics, and openness to collective dialogue. Again and again I have seen non-prof board leaders who act like they run the world. Controlling, and not open to varied opinions or to exploring promising ideas advocated by one or a few board members. Their desire for power and control creating a strong fear of failure and resistance to new or different ways. It is critical to be courageous, communicative, and collaborative.
- Boards don’t know what they are talking about (rarely any significant expertise in the work of the organization. At best in very narrow domains.)
- Board members worry about relationships with each other over the mission of the organization (often without realizing that is what they are doing)
- Chairs don’t see job as managing the board
- Fundamentally we ask boards to do too many things. I’m following the lead of you and others and starting to deploy the Minimum Viable Board model and standing up specific teams of volunteer support for very narrow and specific roles so the job is clear and the right people are engaged.
- They are on too many other boards.
- BODs are part of a puppet regime and have no authority. Meeting after meeting the same “pain points” are mentioned and the ED wields power with no solutions. Insisting a BOD member volunteer in transactional endeavors (trash clean-up, tabling at events, accompanying the ED during public speaking engagements vs. using their superpower (legal, HR, etc.) to elevate the NP. Oh, and my all-time favorite, “What we really need is a rainmaker on our Board!” When I hear this, I feel like the last person picked in a kickball game.
- Boards who are rubber stamps for an ED. Boards whose members aren’t selected for their specific value to support the organization’s mission. Board members who don’t know specifically why they’ve been invited or what’s expected of them, or the what the roles of a board are. Boards without a strong president who leads by setting expectations for board members, facilitating the implementation of board responsibilities and holding both the board and it’s members accountable. Boards that are not diligent in their management of the executive by collaborating with the exec to set realistic expectations and goals, regularly reviewing exec progress, supporting exec’s work through implementation of board-appropriate duties, and being her partner in both success and challenge.
- Having no term limits. They get stagnant, cliquey and they stand by the “old guard” of their staff, even when they’re actively hurting the mission. They won’t discipline them for anything, even when a lawsuit is within the realm of possibilities. There’s no new blood, and it’s easy to tell because the org isn’t following new trends or trying new things.
- Way finding. Research tells us that board excellence is a social construct. Each board has to define for itself what its role is (beyond its minimum fiduciary role), how it adds value to the organization. Because organizations are so varied, there is no one way, no best way. But very few people tell boards that finding their way is part of their job. And that they need to be constantly evolving to continue to meet the needs of a dynamic organization in a dynamic landscape. That way finding is a HUGE job for an ever changing group of volunteers.
- Information boards receive is heavily edited, so if things are going off the rails the board might be the last to know.
- For volunteer boards, we often forget that the organization and their role in it is likely a 5th or lower priority in their busy lives. They forget what they promised to do, what decisions they made last month, what the purpose of the organization is. Reminding them, gracefully and repeatedly, is key….but you can’t ‘talk about it’ because they will tell you ‘we know…’
Again, these issues are not a matter of each individual board. This is a systemic problem.
What is needed, therefore, is not a governance consultant for every board in the world. What is needed is a new way of leading social change organizations. That is the difference Catalytic Thinking can make – not just changing things for one organization, but for all of us seeking to make a bigger difference in the world.