Leveraging Technology to Elevate Board Performance – Part 2

  • March 26, 2015
  • BLOG

A Field Guide in Three Parts

Your Board should serve as the engine that fuels your organization's journey.

Your board should serve as the engine that fuels your organization’s journey.

Over the last two decades, governance — the work performed by boards of directors – has become a more challenging endeavor than ever before.  Overwhelmingly, resources are scarcer, requiring organizations to do more with less.  Scandals in the corporate, public and nonprofit sectors have resulted in increased pressure and scrutiny on boards of directors from regulators and stakeholders alike.  In this environment, boards and staff are seeking ways to perform at a higher level by operating in an agile manner.  And yet, most of the prescriptive literature on board governance tends more toward the theoretical than the practical.  This leaves board members relatively unsupported in their quest to effect lasting change for their organizations, sometimes in environments that can actually discourage innovation.

The purpose of this three-part monthly series is to confront this important challenge head-on.   Its intent is to provide practical advice for how boards can combine their passion and expertise with governance-focused technology in order to deliver tangible results.  Each installment of the series will focus on a key thematic competency that is common among high-performing boards, and explore the meaning and importance of each.  The guide will also offer tips and tricks, important considerations, and pitfalls to avoid for boards seeking to enhance their governance practices and drive sustainable organizational change.  The series topics are:

  1. Enhancing Board Processes: Where the Rubber Meets the Road
  2. Channeling Strategic Collaboration: The Grease that Allows the Engine Run
  3. Fostering Circumspect Vision: Navigating Through the Windshield AND Rear-View

While pragmatic in nature, these governing practices are firmly supported by leading academic theory.   The themes echo the seminal work “Governance as Leadership” by Richard Chait, William Ryan, and Barbara Taylor, which holds that excellent boards must routinely operate in and fluidly transition among three distinct “modes” of governance, as follows:

  • Fiduciary Mode – the board is focused on financial and operational oversight – ensuring organizational compliance, and that tangible assets are being used appropriately.
  • Strategic Mode – the board helps create a winning strategy for the organization, monitors progress in executing that strategy, and serves as a strategic partner to management.
  • Generative Thinking Mode – the board fulfills its leadership role by deciding which issues deserve attention, what the issues mean for the organization, and how best to address.

We find this taxonomy to be imminently useful as a framework for how boards should strive to operate.  Like any ambitious diet or exercise regimen, however, this can prove to be more of an aspirational ideal than an attainable reality.  This is where technology, when implemented with prudence and strategic foresight, can be invaluable; and this field guide aims to assist in simplifying that process.

This series is informed by our experience at BoardEffect of having worked with over 1,200 organizations to leverage board management software in pursuit of enhanced operations and mission achievement.  It is our aspiration, however, that this series is vendor and technology agnostic, standing on its own merit as an aid to any organization with a governing body seeking to optimize its board as a strategic asset.

Part I: Enhancing Board Processes:  Where the Rubber Meets the Road

Part II:  Channeling Strategic Collaboration:  The Grease that Allows the Engine to Run

This is the second installment of a three-part series, “Leveraging Technology to Elevate Board Performance.”  In this segment, we examine how organizational collaboration fuels the journey toward mission achievement.  Before charting a path toward success, a board must pinpoint its “destination.”  Clarifying the mission establishes a point on the horizon toward which an organization strives. This is the quintessential first leg of the journey, but only the first.  In the strategic mode of governance, a board functions as compass that helps an organization set its bearings and determine the direction to follow toward its end-destination. Accordingly, the following installment seeks to help answer the question: how can organizations use technology to promote board collaboration and foster strategic leadership in support of an organization’s journey?

Board Workflows in the Strategic Mode:

  • Explanation: a central focus of the board is to ensure a winning (sustainable) strategy for the organization – driving movement toward mission achievement – and to serve as a strategic partner with senior management in ensuring its execution.
  • Optimal Situation: board members (along with senior management) actively engage in collaborating on the setting of strategy, ensuring resource alignment with strategic priorities, monitoring progress against stated goals, and advising leadership on potential adjustments as the landscape evolves.
  • Practical Reality: even when board members are engaged at a strategic level, they do not always have access to timely and actionable information needed in the planning process. When information is provided, it sometimes is unaccompanied by the necessary context and commentary that enables boards to grasp and codify its broadest implications.  Finally, the episodic meeting paradigm can inhibit fluid board collaboration that makes otherwise static information strategically valuable.
  • Useful Tools: operating in the strategic mode is all about a board’s ability to process and apply critical information in a dynamic environment. Board management software can help in this endeavor.  For example, various technology solutions aid in building consent agendas (to help a board pull out of the weeds and extend its line of sight during meetings), analyzing the current and ideal composition of a board, enabling board and CEO performance evaluations, and aligning the strategic plan with a range of initiatives from committee work to development activities.  Collaborations tools also allow boards to remain connected and productive beyond the boardroom.
  • Implementation Tips and Tricks: to get the most out of board management software, first go back to basics. In an offline mode, the board should explicitly consider the implications of the strategic plan in relation to every board and organizational activity. For instance, first revisit the function of board recruitment, then later leverage technology to facilitate the identified and related tasks. As another example, the organization should inventory and anticipate needs in board composition, based on the board’s strategic goals.  That will put the board in an advantageous position to successfully leverage software to design, document, automate, and analyze processes for attracting and on-boarding new volunteer leaders.  In each of these cases, be sure to leverage online collaboration tools to allow board members to share views and test assumptions on a fluid, real-time basis (which is otherwise can be difficult to foster outside of scheduled board meetings).
  • Pitfalls to Avoid: again, don’t assume the use of board management software will magically create best practices for your organization. Strategic planning is a team sport in continuous play.  Accordingly, a strategic plan should not be a static document or “shelf-ware” that gathers dust.   Be sure to intentionally build meeting agendas based around your strategic plan throughout the year.  This will ensure your plans are constantly at the forefront and part of the discussion as a consistent organizational priority.
  • Final Consideration: Be both intentional and innovative about how you leverage software that supports your board.  Simply paving the cart-path (automating old processes) won’t necessarily build a super-highway.  Sometimes re-thinking process is necessary to operate strategically.

A high-performing and collaborative board of directors can help an organization maintain sight of its destination and remain on the right route.  Mastery of the strategic mode of governance through enhanced collaboration advances the board’s movement toward mission achievement.  Board management software makes it easier for board members to work collaboratively and function collectively as the compass for their organization.

 

“Nonprofit” Still Means Business

  • March 23, 2015
  • BLOG
"Nonprofit leaders need the same tools as corporate executives to lead their organizations towards greater accomplishment and sometimes survival."

“Nonprofit leaders need the same tools as corporate executives to lead their organizations towards greater accomplishment and sometimes survival.”

Nonprofit doesn’t mean non-business.  Since the “non” part of profit simply refers to where profit goes (back into the organization, not to shareholders), a nonprofit is otherwise a mission-driven business, complete with business processes, revenue, P&L, employees, etc.

Almost. Perhaps the key difference between nonprofit and for-profit businesses lies in perception — society’s AND their own.

Some nonprofit board and staff members are reluctant to call their efforts business. And some business best practices are considered too costly, too complicated, or too indulgent for nonprofits.  As noted by author/board member/business consultant and Professor Emeritus at Rochester Institute of Technology, Eugene Fram, some boards fail to appreciate that today’s nonprofit leaders need the same tools as corporate executives “to lead their organizations towards greater accomplishment and sometimes survival.”

By excusing themselves from investing appropriately in the tools, professional development, and expertise needed to evolve their organizations, boards mistakenly lower the bar — for staff leadership, outcomes, growth, board leadership criteria, and more. They settle.

And perhaps they’re not at fault for that disservice. A colleague, who heads his own company and sits on a nonprofit board, recently disclosed he expects the organization to outgrow its ED/ CEO within three years.  His instinct is to craft a new contract that includes a severance package for that executive who will have served for over a decade.  That common business practice, however, could be questioned in the nonprofit sector, where the “money into mission” mantra discourages non-essential overhead expenses.  What typical donor wants to fund a pay-out to the outgoing leader?

Another strategy might be to build the leadership skills of the ED/CEO through professional development, but that’s another budget item more commonly found in the for-profit model.  So, does the board keep a leader the organization has outgrown and evolve at a much slower pace or invest in tools to align executive management skills with strategic priorities?

Surely many nonprofits already employ such best practices in business, but it’s more common in certain segments of the sector and in larger organizations.  While we often hear a call for nonprofits to “act more like businesses,” it is unreasonable to impose that expectation without treating them as such.

To effectively change course for a nonprofit, Eugene Fram suggests boards must achieve the following:

  • Reduce the number of board standing committees that hamper effective board operations and misuse board personnel
  • Build a high level of trust between board members, management staff
  • Overview organizational operations and management development, not attempt to micromanage them
  • View the CEO as a professional peer, not as a servant
  • Conduct a robust evaluation of the CEO and the organization annually
  • Pinpoint management’s responsibility and clarify its accountability
  • Develop a partnership between the board and management to develop funds
  • Allow for more management flexibility to develop a more entrepreneurial culture
  • Increase focus on productivity and impacts at the expense of bureaucratic processes

In essence, nonprofit board and staff members accomplish much without sufficient resources, but they surely deserve the same advantages as their for-profit counterparts in running their businesses.

— Sonia J. Stamm, Governance Consultant at BoardEffect

When Good Boards Break Down

  • March 18, 2015
  • BLOG
I am a caption

Effective board development can  boost your board’s ability to  keep their strategic targets in sight.

Sometimes, despite good intentions, nonprofit boards miss the mark. Even when organizational decline is obvious to external stakeholders, the board fails to recognize the problem or solution. While most of these crises aren’t necessarily caused by the board, the board sometimes is the culprit.  A recent article in The Nonprofit Times identifies common circumstances and potential fixes for those occasions.

Time Orientation

The first problem derives from board members’ orientation of time. The ideal board looks out, toward the future, not down, into the details of the present. The author suggests the tendency to focus on the latter reflects board members’ personalities and professions. If their paid work keeps them focused on the here and now, that’s where they tend to stay, thereby neglecting even the short-term future of the nonprofit.

The simplest solution to this challenge is, according to the author, a difficult one. The agenda for each board meeting must be constructed to keep focus on future opportunities and challenges, rather than the past and votes about the present. Framing the agenda for strategic governance requires collaboration between the CEO and board chair and a shared future orientation to time.

Visioning

Board member and “trustee” are terms often used interchangeably, but they are not the same. Legally, a trustee holds property on behalf of an outside beneficiary, which does not reflect the range of responsibilities of nonprofit board members. Perhaps that confusion, however, creates another challenge in that protecting assets is paramount to a trustee, while board members are expected to partner with a CEO in leading an organization.

While board members certainly should protect the financial assets of the nonprofit, the tendency to overemphasize this responsibility can paralyze a board. A potential solution is improving the board development and recruiting processes. Ongoing efforts to teach board members what to do and identify the talent needed to do it will keep the board aware of and aligned with strategic goals.

Industry Expertise                 

Most industries have their own jargon, but nonprofits that rely heavily upon federal and state governments for funds can be buried in regulations and reporting requirements that even the CEO finds cumbersome. Board members, then, wind up even further removed and confused. The answer here is to keep it simple at board meetings, enabling board and senior management to discuss relevant matters in ways all parties can understand.

Holding Back

If the most coveted board members are those who can make significant financial contributions to an organization, then those with high net-worth serve many boards. Unfortunately, their orientation to equity investing and money management might stifle their contributions to nonprofit decision-making. By withholding their expertise, perhaps fearing irrelevance in this different context, such board members compromise the effectiveness of the board. Board chairs and CEO’s can work to solve this problem by personally appealing to all board members to contribute their expertise.

As the author concludes, “nonprofit board governance is an imprecise process at best.” While the role of the board is clear, actual practices vary greatly. The author adds that a lack of board engagement might reflect the challenge of nonprofit governance or a breakdown in the governance process, but boards can succeed with increased commitment to board development.

The Argument for Looking Out

I recently read in Nonprofit Quarterly that yet another nonprofit board voted to throw in the towel, igniting the fury of stakeholders.  The governing body of Sweet Briar College, one of approximately 40 remaining all-women’s schools in the US, voted to close in August, citing financial difficulties despite an $84M endowment.

While we certainly don’t have enough data to debate the decision, the board might well have acted responsibly.  Surely, too many nonprofits limp along, draining community resources long after they cease to be needed or effective.  In this case, though, some stakeholders believe “the board acted precipitously and without much imagination.”  That made me wonder.

Perhaps this board was focused on fiduciary — decreasing enrollment, increasing expenses — at the expense of the other modes of governance.  The article above seems to discuss such perils, but uses the orientation of time to distinguish between looking down (fiduciary) and looking out (strategic and generative).

Perhaps I now view everything within that framework, but it’s easy to see.  The concept of “trustee,” as described above, also corresponds to a fiduciary focus and the author’s assertion that nonprofit boards have broader responsibility seems to imply the strategic role.

I agree with his conclusion that governance is an “imprecise process” with inherent challenges and that systematic board development efforts are essential for keeping boards on track.  I was surprised, however, to read his suggestion that any board member would need the board chair or CEO to “coax” his/her participation.  Effective board development, in theory at least, would ensure the board is comprised of the right people who understand their roles, share their talents, and focus collectively on the right things.

I wonder if that’s true at Sweet Briar College.

— Sonia J. Stamm, Governance Consultant at BoardEffect

BoardEffect at Business on Board

The Arts & Business Council of Greater Philadelphia’s Business on Board Program hosts BoardEffect May 8, 2015 at the University of Pennsylvania Museum of Archaeology and Anthropology.  Get ready for a lively case study and role play session centered on dynamic agenda creation with BoardEffect’s Dottie Schindlinger, EVP of Market Development.  Dottie returns as guest faculty to keynote the final meeting of the Business on Board leadership development and board placement program designed for business, legal and technology professionals who are leaders in the arts and culture community in the Greater Philadelphia Region.

Updating Standards for the Sector

  • March 5, 2015
  • BLOG
"The need for an overhaul of guiding principles written less than a decade ago illustrates the magnitude of transformation in the world around us."

“The need for an overhaul of guiding principles written less than a decade ago illustrates the magnitude of transformation in the world around us.”

Best Practices, Governance Principles Revised, The Nonprofit Times, Feb. 25, 2015  reports this week Independent Sector released an updated edition of its 33 Principles for Good Governance and Ethical Practices, marking the first major revisions since its original release in 2007. The event was marked by bi-partisan fanfare on Capitol Hill.

As one Senator noted, establishing best practices is important in every field, but especially in philanthropy, “where good governance makes it easier for charities to continue their work.”

Two key factors led to the revisions at this particular time: 1) new laws and regulations impact the principles and 2) the nonprofit sector itself has changed over the past eight years, particularly in the areas of data protection, transparency and privacy, and overhead costs.

Since 2007, the culture and practices around fundraising have shifted toward – and from — technology. Online fundraising, social media, and crowdsourcing have transformed philanthropy and the relevant principles needed to be updated to reflect donor intent and security.

Courtesy of campaigns like “the Overhead Myth,” beliefs about executive compensation and overhead costs also have evolved. While the Principles still recommend that nonprofits direct at least 65% of revenue toward programming, there now is more room for flexibility due to “extenuating circumstances.”

Given the widespread use of cloud-based software for donor management, nonprofits have assumed increased risk for cyber attacks and other breaches. According to the authors, the Principles now “recognize the importance of protecting an organization’s data along with its business records, property, program content, integrity and reputation.”

Other updated topics include: codes of ethics, whistleblower policies, new business and earned income, and transparency and privacy.

The Magnitude of Transformation

While the publication is news itself, I find myself more impressed by the significance of its revisions. The nonprofit sector is not known for adapting early to much of anything, as funding typically does not allow for cutting edge technology or innovation. Most organizations struggle just to stay current.

That said, the need for an overhaul of guiding principles written less than a decade ago illustrates the magnitude of transformation in the world around us. In less than a decade, concepts like crowdsourcing and social media have not only revolutionized how nonprofits raise money, but also shaped public opinion and redirected board attention.

Since we’ve previously mentioned The Overhead Myth in this blog, it seems worth noting the shift there, too. At last, there is sanctioned acknowledgement that running a business requires fluctuation in overhead. Also significant, to me at least, is that Independent Sector suggests that programs receive 65% of revenue, not the anecdotal 85-90% that many donors and nonprofits themselves believe necessary to show efficiency.

Finally, I’m left wondering how well received the revised version will be.  When the original document debuted, not every nonprofit thought leader supported its premises. The Philanthropy Roundtable, a network of charitable donors in the U.S., did not offer its endorsement at the time, citing three main concerns: 1) a “one-size-fits-all approach to setting standards for a diverse sector,” 2) the implication that foundations “act unethically or practice misgovernance unless their boards include members from diverse backgrounds,” and 3) the potential for some “problematic principles…to be written into law” if widespread consensus is perceived to be behind them.  (Read more in the original article in Philanthropy Magazine, Nov/Dec., 2007).

While I agree that one-size-fits-all does seem ambitious (given the diversity we see even among clients), but good business practice is good business practice and should not elude the nonprofit sector.  As I continue to digest the revised Principles, I’ll be watching the Philanthropy Roundtable for an update to their stance.

— Sonia J. Stamm, Governance Consultant at BoardEffect

 

Women Rock the Boardroom

  • March 3, 2015
  • BLOG
I am a caption

“Women’s style of engagement tends toward including everyone at the table.”

The impact of gender diversity in the board room is the focus of a recent article in the Harvard Business Review.

Despite research that shows better performance, higher profitability, and increased collective intelligence on teams with gender diversity, the composition of US boards still includes only 16% women.  Norway’s quota system provides a useful backdrop for recognizing women’s critical impact on boards. Aaron Dhir, an associate professor at York University School of Law, studied the country’s mandatory 40% women requirement to understand its effect on boards’ cultural dynamics, decision-making, and overall governance. In analyzing the “human side of governance,” he noticed the following:

Women demonstrate a distinct approach to decision-making. They tend to ask more questions, probing more deeply into issues, which leads to “more robust intra-board deliberations.” According to the researcher’s findings, women avoid “presenting a façade of knowledge and…(making) decisions they (don’t) fully understand.” Furthermore, women’s style of engagement tends toward including everyone at the board table.

Homogeneous groups believe they develop better solutions, but don’t, while heterogeneous groups believe they don’t, but do.

Women, as “outsiders,” bring a fresh perspective that disrupts the “closed” social dynamics among board members, the CEO, and senior management, altering their tendency toward “in-group favoritism.” The professor notes an opportunity to study how that will change over time, as women “lose their outsider status.”

He also notes that female board members did not feel stigmatized by the quota requirement because the number of women was significant, having reached critical mass.

The professor identified seven overall consequences of gender diversity in the boardroom, as follows:

  • Enhanced dialogue
  • Better decision making, including value of dissent
  • More effective risk mitigation and crisis management, and a better balance between risk-welcoming and risk aversion behavior
  • Higher quality monitoring of and guidance to management
  • Positive changes to boardroom environment and culture
  • More orderly and systematic board work
  • Positive changes in behavior of men

Amidst the positive impact of gender diversity are some challenges, including “prolonged decision-making, less initial bonding, and additional conflicts” attributed to more diverse perspectives. Furthermore, management must prepare to address different questions and boards, themselves, must be well-managed to prevent toxicity. Research shows that homogeneous groups “don’t come to better solutions,” yet think they do, while heterogeneous groups DO reach better solutions, yet think they don’t.

In Norway, there remains tension about the way women infiltrate the board room. Clearly, the “forced re-population of boards along gender lines” has transformed the “traditional order of corporate board governance systems, dislocating established hierarchies of power and privilege” in prominent institutions, proving that adding women does change board dynamics and governance.

Speaks for itself, right? Ok, there’s more…

While the article focuses on the for-profit sector — in another country, no less — it offers valuable insight, even beyond the obvious (that diverse perspective really enhances board effectiveness). In no particular order:

The growing importance of strategic board recruiting can not be understated.  It has been noted in numerous pieces (including Todd’s blog this week) as a general priority among boards, especially as board engagement stagnates and competition for effective board members soars. Qualifying the impact of gender diversity on board dynamics and effectiveness underscores the need for inclusion as well as competent board leadership.

That said, the nonprofit sector already includes more women in the board room. According to the recent National Index of Nonprofit Board Practices (BoardSource), women comprise 48% of boards among the nonprofits surveyed.  That figure seems high in contrast to some other statistics I’ve heard (especially among larger nonprofits), but still significantly more impressive than their corporate counterparts, where figures hover under 20%.

Perhaps my favorite finding, however, is a telling observation about group dynamics:  homogeneous groups believe they develop better solutions, but don’t, while heterogeneous groups believe they don’t, but do.  As noted in previous blogs, nonprofits are increasingly called upon to develop meaningful performance metrics and, as they do, it seems the effectiveness of such tools could be inextricably linked to the effectiveness of its  strategic board recruiting efforts.

— Sonia J. Stamm, Governance Consultant at BoardEffect

Elevating Board Governance through Technology – Lessons from the Field

Join BoardEffect’s Dottie Schindlinger at BDO in Philadelphia PA March 17, 2015 for a fast-paced session to explore how technology can elevate organizational performance in an increasingly complex business environment.

“Over the past decade, a combination of highly publicized corporate scandals, legislation (such as the Sarbanes-Oxley Act) and a variety of regulatory and public pressures have amplified the focus on the boards of directors of every kind of organization and their ability to perform well.  In turn, the boardrooms of non-profit organizations are no longer populated with members who received a seat at the table in exchange for making a large contribution.  Rather, board members are expected to deliver value to their institutions’ stakeholders, and are judged on how well they help the organization navigate an increasingly complex environment. Institutions small and large are racing to implement systems and processes – such as board governance software – to enhance their boards’ abilities to perform at a high levels, increase the transparency of the board’s work to the public, and foster greater accountability of board member performance.”

Learn more.

Leveraging Technology to Elevate Board Performance – Part 1

  • February 27, 2015
  • BLOG
caption

Enhancing Board Processes:  Where the rubber meets the road

A Field Guide in Three Parts

Over the last two decades, governance — the work performed by boards of directors – has become a more challenging endeavor than ever before.  Overwhelmingly, resources are scarcer, requiring organizations to do more with less.  Scandals in the corporate, public and nonprofit sectors have resulted in increased pressure and scrutiny on boards of directors from regulators and stakeholders alike.  In this environment, boards and staff are seeking ways to perform at a higher level by operating in an agile manner.  And yet, most of the prescriptive literature on board governance tends more toward the theoretical than the practical.  This leaves board members relatively unsupported in their quest to effect lasting change for their organizations, sometimes in environments that can actually discourage innovation.

The purpose of this three-part monthly series is to confront this important challenge head-on.   Its intent is to provide practical advice for how boards can combine their passion and expertise with governance-focused technology in order to deliver tangible results.  Each installment of the series will focus on a key thematic competency that is common among high-performing boards, and explore the meaning and importance of each.  The guide will also offer tips and tricks, important considerations, and pitfalls to avoid for boards seeking to enhance their governance practices and drive sustainable organizational change.  The series topics are:

  1. Enhancing Board Processes: Where the Rubber Meets the Road
  2. Channeling Strategic Collaboration: The Grease that Allows the Engine Run
  3. Fostering Circumspect Vision: Navigating Through the Windshield AND Rear-View

While pragmatic in nature, these governing practices are firmly supported by leading academic theory.   The themes echo the seminal work “Governance as Leadership” by Richard Chait, William Ryan, and Barbara Taylor, which holds that excellent boards must routinely operate in and fluidly transition among three distinct “modes” of governance, as follows:

  • Fiduciary Mode – the board is focused on financial and operational oversight – ensuring organizational compliance, and that tangible assets are being used appropriately.
  • Strategic Mode – the board helps create a winning strategy for the organization, monitors progress in executing that strategy, and serves as a strategic partner to management.
  • Generative Thinking Mode – the board fulfills its leadership role by deciding which issues deserve attention, what the issues mean for the organization, and how best to address.

We find this taxonomy to be imminently useful as a framework for how boards should strive to operate.  Like any ambitious diet or exercise regimen, however, this can prove to be more of an aspirational ideal than an attainable reality.  This is where technology, when implemented with prudence and strategic foresight, can be invaluable; and this field guide aims to assist in simplifying that process.

This series is informed by our experience at BoardEffect of having worked with over 1,200 organizations to leverage board management software in pursuit of enhanced operations and mission achievement.  It is our aspiration, however, that this series is vendor and technology agnostic, standing on its own merit as an aid to any organization with a governing body seeking to optimize its board as a strategic asset.

Part I: Enhancing Board Processes:  Where the Rubber Meets the Road

From the moment they cross the starting line, board members must protect the institution they serve. Governance efforts in support of this critical, core duty should be purposefully conceived to drive the board’s collective capability.  With this in mind, we kick off this series where the rubber meets the road: a board’s shared processes or common activities.  In short, how can organizations use technology to strengthen their Board Workflows to build valuable fiduciary competency?

  • Explanation: one of the board’s central responsibilities is to steward tangible assets, oversee operations, manage legal compliance, and ensure fiscal accountability.
  • Optimal Situation: board members should understand what is expected of them, be able to readily access relevant, critical data to inform their thinking, prepare for meetings, and support prudent oversight.
  • Practical Reality: Often information is inaccessible and standards are lacking in terms of the depth, frequency, and format in which boards should consume information.
  • Useful Tools: one could argue that any tool that increases access to information will raise a board’s fiduciary competency.  However, information overload can also hinder a board’s ability to focus on pressing concerns.  For this reason, board management software has been designed for the express purpose of arranging, and making securely accessible, important data, records, policies, and resources.  For instance, such solutions organize the policy manual for a conflict of interest form, the calendar of scheduled board and committee meetings, a finance committee’s workroom for discussions about budgeting, and the resource library to record budgeting history.
  • Implementation Tips and Tricks: access to information is only part of the equation.  When boards adopt technology to help uphold their fiduciary obligations, it is important that they first spend time clarifying what information they need when, how they plan to use that information, and why it is important. This exercise shines a collective light on a board’s workflows, which forces examination of what is working well, versus what processes can be scrapped.
  • Pitfalls to Avoid: it is advisable to avoid the assumption that using board management software will create best practices where none previously exist.  Seeing a summary of organizational assets, for instance, does not equate to effective risk management.  Instead, codifying process standards prior to adopting a technology solution will go a long way toward ensuring organizational success with that system.  For example, create a committee workroom for informed discussion of the issues and options, then develop a policy and plan for the board to review and approve.
  • Final Consideration: It’s relatively straightforward to marry improved workflows with board management software to enhance fiduciary oversight, so remember to resist the temptation to stop there!

A high-performing board of directors can be an organization’s most valuable asset.   Mastery of the fiduciary mode of governance through enhanced board processes advances the board’s progress toward mission achievement.  Board management software offers a range of opportunity as varied as the needs of each board and organization.  The key is to effectively align and deploy technology to support the full range of responsibilities of board governance.

Check back next month for Part 2 in the series!

BoardEffect at NJHA’s CEO Senior Leadership Assistants Conference

BoardEffect to present at New Jersey Hospital Association’s CEO Senior Leadership Assistants Conference sponsored by the Health Research & Educational Trust of NJ, February 26, 2015.  The conference offers a specialized day of presentations designed to provide senior healthcare leadership assistants with the tools they need to be successful.

Join Dottie Schindlinger, EVP Market Development, for a discussion about leveraging board management software to drive efficiency, effectiveness and engagement of your board and leadership, while ultimately elevating organizational performance.

Creating a Market for Governance

  • February 21, 2015
  • BLOG
I am a caption

Boards must exercise hindsight, oversight and insight, but the most critical of all may be foresight.

In a recent post on Social Velocity , president Nell Edgington described what the iPhone might reveal about philanthropy. We wonder the same about governance.

Citing studies that show most nonprofit donors “aren’t interested in impact,” Ms. Edgington ponders whether that presents opportunity for the future. Using Apple as a model for creating a market for something (smartphones) from nothing, she wonders whether “we could create a market for social change funding where one currently doesn’t exist.”

Having created demand from scratch, Apple is a widely recognized “market maker.” Cheers to Social Velocity for applying the concept of a market maker in the nonprofit sector! We believe current research also suggests the need for just that around governance.

Per the comments of our CEO, Todd Gibby, about the recent BoardSource publication, Leading With Intent: A National Index of Nonprofit Board Practices, board engagement is an increasing challenge in the nonprofit sector, making the capacity for true governance a vulnerability.

As Ms. Edgington notes, Apple uses technology innovation to reach consumers with products they didn’t know they needed. In 2006, Steve Jobs didn’t survey consumers about what they wanted; instead, the company identified a “latent need” and created a robust market.

In continuing to develop BoardEffect as a board management platform, we are keenly aware of how nonprofits work to manage their boards. Providing information, tracking term limits, posting meeting dates, and other board-related functions are easier with technology.  Boards themselves (in light of recent crises, legal changes, and economic influences) are typically attuned to their fiduciary responsibilities and increasingly aware of their strategic roles — also recognized to be easier with technology.

But there is, perhaps, a latent need: capacity to address the generative mode of governance. Even experts in the field of nonprofit boards emphasize the importance of “oversight, insight, and hindsight.”  Glaring, to us, is the omission of foresight. To be most effective, board members must look ahead – collectively — to determine what all the information, data, trends, and metrics mean for their organizations.

Just as we didn’t know we needed access to all things via smartphone to do what we now can do, perhaps board members don’t yet realize they can use access to information via a board management platform to engage together in forward-thinking and govern fully, in three modes.

— Sonia J. Stamm, Governance Consultant at BoardEffect