1. The Midwest Center for Nonprofit Leadership at UMKC EFFECTIVE BOARDS: Nonprofit Leadership and Governance A Partner in Leadership for Sustainability Presentation by Scott T. Helm, Ph.D. Midwest Center for Nonprofit Leadership at UMKC Sponsored by:

2. Board Activities Fiduciary Strategic Generative The Midwest Center for Nonprofit Leadership at UMKC

3. The Legal Duties of The Board Duty of Care Duty of Loyalty Duty of Obedience

4. The Midwest Center for Nonprofit Leadership at UMKC Governance and Policy Govern Is to guide, control, and or direct Governance Is the process by which community interests and values are translated into policies and actions Policy Is a guiding principle; a guide for action that is adopted by organization’s leadership to guide their own and others’ decisions and actions

5. What areas do policies cover? Board roles and responsibilities Staff roles and responsibilities Operating budgets Revenue and expenditures Reserves Capital improvements Debt management Investments Procurements Risk management Human resources Accounting, internal/external audit/ reporting

6. Fundamental Dimensions of Policies Formal v. informal Accountability v. flexibility Policy v. Procedures Actionable v. Philosophical

7. Creating Financial Policies – Conventional Approach Define the problem Research policy alternatives Create draft policy Recommend to management Review by board

8. The Carver Policy Governance Model Four Types of Policy Areas under Carver: Ends: Describes the goals of the board and mission of the organization. Means: Describes the means by which staff may achieve the ends of the board. Board-Staff Relationship: Board deals with CEO and delegates complete control to the CEO within limits. Process of Governance: Board determines how it will operate to accomplish the group’s work.

9. Differences from conventional method Board creates policy independent of staff Policies are very broadly stated Policies are not focused on departmental or functional levels but rather on public purpose and mission success measures CEO is given wide discretion within executive limitations Boards are focused on governance, oversight and community leadership

10. Differences from conventional method Boards should be focused to accomplish high value strategic visioning, goal-setting, and leadership Financial policies under Carver: Define acceptable financial standards for management What behavior is not acceptable and what is Streamlines oversight Deals with ethics and prudence rather than micro review of results Board establishes general policies and goals and leave staff to determine how to achieve goals Carver works best with a council-manager form of government and less well with a mayor-council form where the mayor is CEO.

11. Models 2 Rules: No perfect model Model should meet your governance goals Models help us effectively engage our board

12. Board of the Whole BOD Task Force Task Force

13. Board of the Whole Strengths: Small size- 3 to 12 No committees, all task forces Most nimble & quick for decisions Usually a start-up structure Volunteer driven, minimal staff needed Tight teamwork Founders influence No executive committee

14. Board of the Whole Weaknesses: Over works members Lacks diversity and talent One person can dominate Lacks perspective Volunteer dominated Too quick and bias Task forces hard to staff

15. Two Committee Board BOD Committee X Committee Y Task Force (s) Task Force (s)

16. Two Committee Board Strengths: Size-10 to 30 CEO can staff both No executive committee Clear assignments possible Two Vice Chair system Staff support good Nimble and TF approach

17. Two Committee Board Weaknesses: Committees too autonomous CEO or CVO can dominate Task forces hard to staff May have too many task forces Roles and responsibilities may get confused

18. Entrepreneurial Board BOD Executive Committee Endowment Committee OperationsAssessmentGovernance Vice Chair Members Task Forces Vice Chair Members Task Forces Vice Chair Members Task Forces

19. Entrepreneurial Board Strengths: Size- 9 to 21 BOD talents evenly divided Weak executive committee 4 vice chair system Work load evenly divided Multi-tasked committees Small enough to add outside talent Task forces used as needed CVO-CEO balance is required

20. Entrepreneurial Board Weaknesses: Requires a engaged board Assignments/responsibilities sometimes confusing Committee must communicate with each other Multi-task Committee is harder to learn Harder to staff Everyone as a fund raiser is hard to achieve

21. Traditional Board BOD Executive Committee FinanceProgramsMembership Fund Raising Nominating AuditStrategic Planning Marketing

22. Traditional Board Strengths: Size- 15 to 100 Clear Committee areas Knowledgeable officers Can accommodate more members Members are not over worked More fund raising positions Most understood structure by volunteers Can match specific member skills to committees

23. Traditional Board Weaknesses: Strong executive committee Underworked non-officer members Too narrow assignments for committees Not everyone as a fund raiser Too big Lack of member ownership CEO/Staff can dominate 1/3 of the board is a ‘no show’

24. The Midwest Center for Nonprofit Leadership at UMKC The Midwest Center for Nonprofit Leadership Building Healthier Communities Through Nonprofit Leadership Bloch School of Business and Public Administration University of Missouri – Kansas City 1-800-474-1170 www.mcnl.org