5 Key Trends Impacting Nonprofit Governance Plus Key Questions Boards Need To Be Asking 

Good governance for nonprofits is hard. Not only is there an information overload but the speed of information coming at you is overwhelming. On top of that, there’s increased risk in an uncertain environment.

There’s a lot to worry about. Is your nonprofit prepared for the next major crisis? Are you transforming digitally? Are you complying with regulations and policies? How are you monitoring internal and external risks?

Those risks are massive and, unfortunately, expensive. Many organizations fall short but we’re here to help. This article outlines 5 key trends impacting governance for nonprofits and shares key questions that boards need to be asking, along with suggestions for strategies to start tackling them.

5 Trends Impacting Nonprofit Governance

Dottie Schindlinger, Executive Director, Diligent Institute shared her insights, and worked with community foundation groups to pull together key questions that nonprofit boards need to be asking, at Community Foundations of Canada Reconnect 2023.

Dottie points out that there are five major issues impacting governance in the nonprofit and community foundation community:

1. Organizational resiliency through economic pressures
2. Cyber risk and digital transformation
3. Change in leadership and succession planning
4. Talent strategy and risk, diversity, equity and inclusion
5. Climate change and ESG oversight

Taking a questioning approach can help boards overcome the overwhelm and guide discussions at board meetings.

Workshop participants at CFC were asked to come up with questions for boards to use, along with strategies to get the answers they need, to start tackling the impact these 5 trends are having on their organization.

Questions Boards Need To Be Asking

Here is the list of questions for board members to discuss at upcoming meetings, with suggested next steps for boards.

1. Organizational Resiliency through Economic Pressures

• Are we prepared for sustainability of operations?
• Are we prepared for sustainability of grantmaking?
• What is the smartest investment mix for the upcoming economy?

Suggested next steps: Encourage the board to have tough conversations. Put the questions on upcoming meeting agendas to ensure you have ample discussion time. Review your risk management policy to make sure it’s adequate for current circumstances.

Reports on operations, grants and current investment mix will also help see where the gaps are and where you need to move to.

2. Cyber Risk and Digital Transformation

• What are other nonprofits doing for digital transformation and cybersecurity?
• What are the strengths and weaknesses of what’s being done?
• What is our data breach plan?

Suggested next steps: Bring in third-party experts to help guide your cyber risk strategy and planning. Take advantage of supports and information available from the government and other agencies around best practice for nonprofits on digital transformation and cybersecurity. Carry out a cyber threat analysis to check vulnerabilities in your organization’s processes and controls. Identify upskilling training for board members on cyber risk best practice.

The board needs to have a clear vision of who-does-what after a breach. Store your cyber response plan on your board management software where board members can access it quickly.

3. Change in Leadership and Succession Planning

• What is the plan for change in leadership and succession?
• How do we shift from succession to continuity?
• How do we ensure the organization as a whole remains in control?
• How often should we update the plan?
• How do we transfer knowledge effectively within the organization?

Suggested next steps: Use the wealth of knowledge on the board and within your nonprofit or community foundations community. Start by asking everybody on the board to share their experiences to draw out strands that can be used for knowledge transfer and succession planning.

Use your nominating and governance committees to facilitate and streamline succession planning.

You might also like reading: Nonprofit leaders tell us their top priorities for 2024

4. Talent Strategy and Risk, Diversity, Equity and Inclusion

• What do we mean by diversity?
• Are we looking in the right places for candidates?
• What barriers to inclusion/belonging exist in how our board and organization are currently structured and operate?
• Why do we want to focus on diversity? What are we hoping to accomplish?

Suggested next steps: Bring in external expertise to help you as well as looking at best practices elsewhere. Review all your policies and practices through a diversity lens, from board recruitment to training to succession planning.

You should conduct regular assessments of organizational policies, procedures, and practices to identify potential obstacles, gaps, risks and opportunities. Implement measurable diversity goals, setting initiatives and programs to track, measure and meet these goals.

Your board management software is a great tool for helping create an effective diversity and inclusion plan, hosting discussions, sharing drafts and helping to bolster your recruitment initiatives.

5. Climate Change and ESG Oversight

• Are we using a climate change lens on everything we do?
• How do we get buy-in of the broader population and encourage non-polarized discussion?

Suggested next steps: Look at what is being done successfully on climate action and ESG, benchmarking against other nonprofits and community foundations. Re-examine your organization’s climate and ESG policies to see if they need updating.

Reporting on your own climate change and ESG key indicators will help your board see where uplift is needed and guide strategies.

Asking these key questions and using these suggested strategies will aid your organization to tackle some of these key trends impacting nonprofits, and technology can play a big role too. If you would like to learn more about how BoardEffect can support your board, we’d love to speak with you! Request a demo and let us share how we help more than 5,000 boards in 48 countries. 

BoardEffect, a Diligent solution, leads in providing innovative boardroom technology to nonprofit organizations. Serving 14,000 mission-driven organizations, Diligent empowers boards with tools to drive positive change. Our secure board management software streamlines operations, enhances governance practices, and enables confident decision-making. With BoardEffect, mission-driven organizations unlock potential, accelerate mission delivery, and make lasting impact in their communities.