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:

Board Activities Fiduciary

Strategic

Generative

The Midwest Center for Nonprofit Leadership at UMKC

The Midwest Center for Nonprofit Leadership at UMKC

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

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

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

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

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

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.

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

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.

Models 2 Rules:

No perfect model Model should meet your governance

goals

Models help us effectively engage our board

Board of the Whole

BOD TaskForce

TaskForce

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

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

Two CommitteeBoard BOD

CommitteeX

CommitteeY

TaskForce (s)

TaskForce (s)

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

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

Entrepreneurial BoardBODExecutive

CommitteeEndowmentCommittee

Operations Assessment Governance

Vice ChairMembersTask Forces

Vice ChairMembersTask Forces

Vice ChairMembersTask Forces

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

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

Traditional Board

BOD

ExecutiveCommittee

Finance Programs Membership Fund Raising

Nominating Audit StrategicPlanning

Marketing

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

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’

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

1-800-474-1170www.mcnl.org