Effective Board Governance for Your Not-for-Profit

By: Cam Crawford FCPA, FCA, CMC, CBV, ICD.D When identifying the factors for success in the Business World we take People, Capacity, Capability and Experience and combine it with Capital […]

By: Cam Crawford FCPA, FCA, CMC, CBV, ICD.D

When identifying the factors for success in the Business World we take People, Capacity, Capability and Experience and combine it with Capital to create an opportunity for Profit.  In the Not-for-Profit World we take those same elements: People, Capacity, Capability and Experience and combine it with Capital to create an opportunity for Impact.

One of the things our Not-for-Profit team at Catalyst is passionate about is ensuring the organizations we work with are set up for success, so they can spend their time really focusing on the impact they set out to create in the world. 

We have identified 3 key areas that drive the success of any Not-for-Profit Organization:

  1. The Board
  2. Community
  3. Management

 Relevance + Capability = Sustainability

The # 1 Priority of any Not-for-Profit organization is to have a strong foundation in each of these above 3 areas. Relevance refers to the impact your organization has, and what need, or needs do you satisfy in the community?  Capability includes who is involved in leading, managing and running this organization and are they doing a good job?

Most Not-for-Profits that exist today do so because they are relevant. There are so many great things organizations are doing that fill a need, better the lives of others, and create a positive impact on society.

We love all the great things the organizations we work with do, and we spend most of our time helping on the capability side. One of the biggest areas surrounding this is Board Governance.  We held a round-table event in the winter of 2019 and covered some of the below areas:

  • Board Member Recruitment
  • Utilization of a nominating committee – Board members and possibly senior management
  • Candidate interview process: do you have a process? What is it and what can be improved?
  • Board skills and experience matrix – gap analysis
  • Diversity: make sure you have different perspectives and representation
  • Continuity planning
  • Term limits; re-appointment cycle –  too much of one thing is not always a good thing
  • Widen the recruitment net – where are you finding your people, is there other places you can be looking?

 

  • Director Orientation
  • Structured orientation package
  • Job description and expectations summary
  • Tours and informal introductions
  • Confidentiality and conflict policies
  • Make a new Board members “first day” special

 

  • Board Operations
  • Effective meeting processes
  • Management:
    • Reporting to the Board
    • Listening to the Board
    • Finding the balance
  • Strategic planning is not an event . . . it is a process
  • Management reporting:
    • Dashboard v. detail
    • Non-financial measures

 

  • Committees
  • Usual committees:
    • Finance and Audit
    • Governance and Human Resources
    • Fund Development
    • Human Resources
  • Executive Committee – do you need this? Who should be involved?
  • Special purpose committee
  • Non-Board participation on committees
  • Objective with any committee – greater Board efficiency and effectiveness

 

  • Director/Board Evaluations
  • How can you get better without this? This is a must, in order to make sure you have the right people on your team
  • Is there a willingness to:
    • Participate AND
    • Communicate results AND
    • Take remedial action as necessary
  • Collection and interpretation of results – decide process in advance
  • Topics:
    • Board processes
    • Board outcomes
    • Individual board member effectiveness
  • Managing the CEO/ED
  • We feel the primary job of the Board is to manage the CEO. Do you agree? Does your board do this well?
  • Board involvement – remember everyone needs to have their noses in…and fingers out!
  • You need to hire; guide; evaluate; compensate . . . a structured processes for this process is necessary
  • Boland Survey – great resource
  • CEO succession plan – do you have one? You will need one whether it is a sudden departure or normal course, so be prepared.

Here’s a good little exercise to help you gauge where you are at in your organization and where you should focus your energy on improving.  Fill in the following:

 

 

Key Elements of Effective NPO Governance:

 

Doing Good

 

Doing Okay

 

Needs Work

 

Board Member Recruitment

 

 

 

 

 

Director Orientation

 

 

 

 

 

Board Operations

 

 

 

 

 

Board Committees

 

 

 

 

 

Director/Board Evaluations

 

 

 

 

 

Then,  What are three emerging areas for action (areas that you have identified need work)?

 

 

We are here for you and want your Not-for-Profit to succeed. If you have any questions about the above article or want to know more about how we work with Not-for-Profits, drop us a line at inquire@thecatalystgroup.ca.