The Business of Board Governance

Jeanne Tedrow is president and CEO of the North Carolina Center for Nonprofits.

Can you hear yourself saying, “Oh, we only meet four times a year and our committees meet every other month. The executive director manages things for the board, so please join as we don’t think it will take up too much of your time?” When a nonprofit executive director or board nominating committee chair approaches a board nominee, there may be a temptation to tell the nominee that it will be easy to participate. Because we want this person’s name and affiliation (or dollars) on our board, we “sell” the notion that this is an easy assignment, and we disregard that this person may also be serving on multiple other boards.

Let us stop ourselves from indulging in this wayward thinking. It does the organization a disservice, especially if it is trying to recruit top talent to the board of directors. Rather, let the nominee know how important he/she is to the work and mission of the organization, and that the board’s work is manageable and challenging. His/her skill set, background, and experience can make all the difference in a high-functioning board. Governing a nonprofit is important business.

One key to good board governance is learning about and implementing best practices. In its updated guidebook, Principles & Practices: Best Practices for North Carolina Nonprofits, the North Carolina Center for Nonprofits devotes an entire principle to Board Governance with 26 best practices. Board governance at its most basic level expects that a nonprofit’s board will recruit and retain members who are committed to providing governance and oversight. That said, you might consider the strength of your board governance practices in the context of your organization’s growth and development.

Principles & Practices includes three categories of best practices around Board Governance: Build, Thrive, and Sustain. Each category defines the “present” capabilities of a nonprofit to manage growth and development. Said differently, these categories help the organization identify its current management condition for each principle.

In the “Build” category, the nonprofit meets its legal requirements and operates with fundamental components of governance and nonprofit management. In the “Thrive” category, the nonprofit demonstrates a working knowledge of governance, oversight, and management evidenced by its handling of daily operations by a skilled and engaged board of directors and staff. When an organization is in the “Sustain” category, it is recognized as a community asset with stable revenue streams, operating reserves, robust programs with a record of accomplishment and good evaluations, strong governance, and respect from peers and constituents.

For example, as an organization moves toward the “Thrive” category, it is fostering an active and diverse board of directors with working committees. As the organization matures further into “Sustain,” it is leveraging an active and diverse board with active and engaged committees that advance the nonprofit through strategic decision-making, fundraising, innovative thinking, and ongoing board development. In other words, successfully achieving best board governance practices directly connects to the board’s understanding of its current condition and management stage of the organization.

 

Want to learn more about the duties and responsibilities of the board of directors and how to build a stronger board? Download a copy of Principles & Practices: Best Practices for North Carolina Nonprofits (Center Members receive the guidebook as part of Member benefits).

Want to see how other nonprofits are using Principles & Practices benchmarks? Start or join in a conversation in Center Connect.

 

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