Building an Exceptional Board of Directors Continuing Studies at University of Wisconsin - Madison Presented by Frank Martinelli The Center for Public Skills Training

Board Development: CORE ACTIVITIES CONTINUOUS: Team Involvement Education and Learning Board Assessment (or Reassessment) & Benchmarking Board Development Action Planning shelly Board Development Plan Implementation

Board Governance: Fundamental Assumptions Distinction between governance and management. “Ends” and “means” distinction. Clarity and agreement about who does what.

Leadership for Board Development Critical role of . . . Full Board. Board Development Committee. Board President and Executive Director.

Board Development As A Leadership Development Process

A Leadership Development Process Nominations and recruitment -- the process of identifying the right individuals to meet the needs of the board helping them understand their roles and responsibilities, and convincing them to become part of the board. Orientation -- the steps taken to give new board directors the information they need to carry out their roles and responsibilities effectively. Training -- the regular, ongoing efforts to build new skills and knowledge among the existing board directors to enhance performance.

A Leadership Development Process Evaluation -- the annual task of evaluating individual board director performance as well as the effectiveness of the board as a whole. Recognition -- the ongoing process of recognizing the work and accomplishments of board directors to the work of the board and to the organization.

Profile of An Effective Board Effectiveness in terms of individual board leader development (previous slides). Effectiveness in terms of qualities or characteristics. Effectiveness in terms of collective board performance.

Profile of Effective Nonprofit Board Leadership Visionary and future-focused. Entrepreneurial spirit. Risk-takers. Effective communicators. Systems thinkers. Community connected. Diverse. Source: The Center for Public Skills Training

Board Responsibilities Set the mission and strategic vision. Select the executive. Support the executive and review performance. Ensure effective organizational planning. Ensure adequate resources. Source: BoardSource 4

Board Responsibilities Ensure stewardship of resources. Monitor impact of organization’s programs and services. Enhance the organization’s image. Assess its own performance. Support public policy and advocacy efforts. 5

The Dynamic Board McKinsey & Company

The Board’s Core Responsibilities Shape mission and strategic direction. Ensure leadership and resources. Monitor and improve performance. Source: McKinsey & Company

Shape Mission And Strategic Direction Clarify mission and vision. Participate in and approve strategic and policy decisions.

Ensure Leadership and Resources Select, evaluate, and develop CEO. Ensure adequate financial resources. Provide expertise and access for organizational needs. Build reputation of the nonprofit.

Monitor and Improve Performance Oversee financial and risk management. Monitor organizational performance and ensure accountability. Improve board performance.

Key Environmental Factors Impacting Focus of the Board Life stage of an organization. Skills of CEO and staff. Stability and adequacy of income. Changes in underlying social issue. Changes in competitive or philanthropic landscape.

Board Effectiveness Enablers Careful decisions on board size and structure Actively managed board composition Inspired board and committee leadership Simple administrative practices and processes made routine

Twelve Principles of Governance that Power Exceptional Boards BoardSource

The Difference Between “Responsible” Boards And “Exceptional” Boards

“Responsible” Boards Capable and dutiful in carrying out its responsibilities. Understands its fiduciary obligations. Approves strategic plans and budgets. Regularly reviews financial statements. Evaluates the chief executive annually. Participates in fundraising.

“Exceptional” Boards Operates on a higher level -- “more” and “different.” Members give more and differently: Time spent more wisely, skills and social networks better leveraged, and treasure more strategically deployed. Measure organizational impact and evaluate their own performance, discuss and debate issues, and open doors and make connections.

Governance as Leadership Richard Chait, William Ryan & Barbara Taylor

Three Modes of Governance Fiduciary mode: key question -- "How are we doing?" Strategic mode: key questions -- "What are we doing?" "Where are we going?" and Generative mode: key questions -- "Why are we doing this?" "What are the possibilities?"

Board Assessment Process Guidelines for assessment. Effective assessment tools. Review samples.

An Effective Assessment Process Enthusiastic support board leadership. Based on a set of standards or best practices that characterize effective board performance. Formal process conducted on a regular, agreed-upon basis. Written assessment tool that all board directors complete is the centerpiece. Plan to use the results to set goals, implement and measure improvement.

Board Assessment Samples MAP Assessment UWEX Assessment GLA CB Assessment excerpt McKinsey -- Short, Mid, Long Forms CPST Visionary Board 12 Principles of Exceptional Boards 10 Questions 20 Questions

Why Boards Fail

Why Boards Fail Ineffective recruiting process. Members lack understanding of the organization and their roles. Micro-managing. No well-planned rotation of members. No way to eliminate non-productive members. 8

Why Boards Fail Too small. No well-planned orientation for new and old members. No strategic plan. No process for assessment. No functioning committee structure. 9

Board Development: Proven Practices

Proven Practices Clearly define roles and responsibilities. Align key board processes with strategic plan. Just-in-time board orientation. Effective meetings: Consent agenda and other tools. Committee effectiveness.

Proven Practices Organizational dashboard. Board leadership succession plans. Board assessment. Board governance committee. Incorporate strategic deliberation into every board meeting

#1 Clearly Define Roles and Responsibilities Clarity re: management and governance. Written individual board and committee descriptions that are current. Maintain clarity re: board policy and oversight functions. Ensure that current job description is in place for the executive director.

Board Job Description Attend all regular board meetings. Serve as an active committee member. Support fundraising activities. Prepare in advance for board policy and decision-making. Attend the annual board planning retreat.

#2 Align Key Board Processes With Strategic Plan

Link Board Recruitment with Strategic Plan Review the strategic plan. Identify the skills, knowledge and relationships needed by the board to advance the strategic plan. Set clear recruiting priorities.

Align Committee Structure with Strategic Plan Review committee structure as part of strategic planning. Align committees with plan. “Leaner is better”. Use task forces and workgroups in place of standing committees.

#3 Just-in-time Board Orientation An advance program of orientation and training to prepare new board members to hit the ground running. Focus on the strategic plan. Speed up the learning curve. Increase confidence and productivity of new board members.

#4 Consent Agenda Expedites routine business at a board meeting. Eliminates the need to vote separately on many of the routine items. Frees up time to address critical matters.

#5 Committee Effectiveness “Fewer is better”. Written committee descriptions. Aligned with strategic plan. An effective chair. Members thoughtfully appointed. Mix of board and non-board members. Accountable to the board. Well-run meetings.

Annual Committee & Board Meeting Calendar Fosters attendance and participation. Improves decision-making. Promotes coordination and increases productivity.

#6 Organizational Dashboard Increases effectiveness of board decision-making. Displays up-to-date information about key performance indicators. Corrective action can be taken before - not during or after - a crisis erupts.

#7 Board Leadership Succession Plans Identify critical leadership positions. Scout board leadership talent for the future. Written plan for fostering and developing future board leadership.

#8 Board Member Assessment Periodic assessment of board member and committee performance. Board meeting feedback form. Board follow-through. Relate findings to board nominations process.

#9 Governance Committee Continuous focus on identifying, preparing and recruiting future board leaders. Plan board education including new member orientation, ongoing training and board retreats. Assess board, chair, individual directors, and board meetings. Annually review governance practices and recommend changes.

#10 Incorporate Strategic Deliberation Into Board Meetings

Strategic Deliberation Use values and vision as the basis for dialogue on emerging issues. Use vision as frame-work for decision-making. Read, listen and look for future trends. Provide opportunities to share information at board meetings.

Development of Board, Committee and Member Action Plans

Preparing for Action Planning Assure board understanding and commitment. Board Development Committee in place. Retreat event to analyze assessment results and develop action plan.

Board and Committee Action Plans What Change or Practice By When Who Responsible EvaluationMeasure

Personal Action Plans Actions I will commit to in order to increase/sustain my individual level of board performance. What I would need from the organization.

Board Effectiveness Resource List Resources Board Effectiveness Resource List

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