The Fiduciary Responsibility of Boards

Boards and board members often are reminded that they have a “fiduciary responsibility” to the organization and, ultimately, to the larger community they serve. At its core, “fiduciary responsibility” is the responsibility to treat the resources of the organization as a trust, and the responsible board will ensure that these resources are utilized in a reasonable, appropriate and legally accountable manner. Although the phrase often is used to refer specifically to financial resources, it actually applies to the stewardship of all of the assets and resources of the organization.

In general, the appropriate exercise of fiduciary responsibility includes:

• Adoption of a set of policies to govern the acquisition and use of financial and other resources
• Establishment, on a regular basis (usually annual), of a budget that allocates financial resources to the programs and activities that will accomplish the organization's mission, vision and goals and outcomes (preferably, in alignment with a strategic plan)
• Development and implementation of an ongoing system for monitoring and holding staff and volunteers accountable for their performance with regard to these policies and budgets
• Development and implementation of an ongoing system to monitor, assess, and report on the overall fiscal condition and financial performance of the organization
• Implementation of an independent external review process (such as an independent audit) on a regular basis (usually annual), to assess the organization's fiscal condition and health, including the effectiveness of its systems and policies for the protection and appropriate use of financial resources

The Work of the Nonprofit Board

In general, there are four fundamental categories of work that boards typically perform for any organization: governance and strategic direction, resource development and acquisition (financial and other resources), coaching and supporting, and monitoring and oversight (including its legal responsibilities). But how a board does each of these four is going to be quite different from organization to organization, and even within any one organization from time to time. That's because, apart from the standard legal duties, the work of a board must change over time as it ensures that it effectively addresses the organization's needs given its strategic direction and state of development.

A Special Note on Boards and Fundraising

One of the most common and, for many organizations, important roles associated with nonprofit board service is that of fundraising, of developing the financial resources needed to support the operations and programs of the organization. Fundraising is not a legal responsibility for a governing board, yet it is a governing board's responsibility to ensure that its organization has the resources it needs to finance its operations and effectively deliver its programs. How boards choose to handle this responsibility varies from organization to organization and field to field. Some hire executives and staff with the explicit understanding that they will take the lead in raising funds, some engage fundraising consultants to do most of the work, and some rely largely or entirely on board members themselves to raise funds. Many boards employ a combination of these approaches. (Chapter Eighteen addresses more fully the entire topic of philanthropic fundraising; we address only the board-related aspects of it here.) But when all is said and done, the board has ultimate responsibility for ensuring that the necessary resources are secured. This is a pivotal aspect of board leadership.

Of course, even though it's a common board responsibility, many board members dislike or are even afraid of the work of fundraising. “I hate to pester my friends for money,” some say. “I'm just not cut out to beg,” others say. They really do hate the idea! And if these perspectives were accurate characterizations of fundraising, almost everyone would! But they're not!

Successful fundraisers operate from a different perspective. They appreciate that fundraising is not about begging, conning, or “guilting” people into giving money—it's about creating opportunities for others in our community to join us in making a difference in the lives of those who are served by our agency or organization. It's about inviting people to become part of a cause that they appreciate. Giving is a natural human phenomenon, and charity and giving are a part of every culture. And most people do like the idea of giving when they have confidence that their gifts will make a difference in their community and improve lives. Of course, they want it to be about results—so our work starts with having effective organizations that do make a difference, and then being prepared to share the story of how that is happening and what it will take to sustain and grow the work.

So what does it take to be successful in raising money? You probably already know most of this!

• People give to the causes they care about, so we need to network and find the people who care about the work of our organization. Don't pester the people who don't care about the cause—keep reaching out and networking to find and share the story with the ones who do. They're the ones who will thank you for asking!
• People want to invest in making a difference, and they need to have confidence that their money will achieve results they care about. Therefore, when we ask people to give, we need to understand and be prepared to share the following information:
  • Who will my money benefit, and why would I care?
  • What difference will my money make, and how? If I invest in your organization, how will you use the money and what results can I expect?
  • Why should I trust you with my hard-earned money? How do you make sure my money will be used efficiently and well to achieve results I value?
• People give to people whom they trust. Therefore, fundraising involves developing and affirming relationships between those who give and those who will use the money to make the difference. No gift of any significance is going to be given before the donor gains trust and confidence that the people of the organization will be good stewards of their money. And they really want to know who is leading and overseeing the work—that is another reason why prospective donors often look critically at the governing board and top executives when they consider a gift. (By the way, that's also why many major donors ask how many members of the board themselves have made gifts to the organization. Why, they often ask, should I give to an organization that can't even attract gifts from its own board? It's a fair question!)
• People often have specific ideas about how or for whom the money they give will be used. They may have a favorite program, for example, or there may be a particular type of client they want to benefit from their gift. For example, some donors have a special interest in helping only children or people with certain health challenges or needs. Some major donors will like the idea of having their names on a building or linked to a particular program. And some prefer to remain anonymous and keep their giving confidential. We are well advised to take care to understand what the prospective donors care about and do all we can to ensure that our options meet their needs. And always remember: any restrictions that a donor places on the use of a gift is legally binding. If someone gives money for a particular program, it is illegal as well as unethical to use the money for any other purpose.
• There are many ways that people want to give, and we are much more likely to be successful if we offer options that match their interests. For example, some may wish to give via frequent small gifts (such as regular payroll deductions), some may wish to give only once or twice per year, and some may wish to give as part of some kind of fun group experience (such as a charity golf tournament, a charity casino night, a happy hour auction). Some may have very little money today but they would like to leave a legacy, and they may be willing to include your cause in their will or name your organization the beneficiary of their IRA or life insurance policy.

Board members and other fundraisers are wise when they plan to capitalize on all of the previous points as they prepare to raise money. In fact, planning and preparation are central to fundraising success. Before going to anyone to ask for funds, get organized. Too many boards and organizations “shoot themselves in the foot” because they jump into fundraising without planning, organizing, or preparing their people for the process. It is very worthwhile to take time to work together to make plans, prepare information and resource materials, identify your best prospects and determine who and how they best could be approached, and what it is that you want to ask of them. And when we ask board members to participate in the fundraising process, we have an obligation to provide them with the information and training that will help them understand and implement this work successfully. Few of us are “naturals” at raising money. Yet, too often, we just tell our board members and volunteers to go raise money without helping them get ready to do this important work. Of course, that's often the source of board members' and volunteers' complaints and fears about fundraising. People don't like to be asked to do things they don't have confidence they can perform reasonably well. In fundraising, as in all other work, it's unfair to complain about performance if we have not provided people with the knowledge, training, and resources they need to be successful.

Fundraising is about creating opportunities for people to invest in work that they consider worthwhile and important and, when it is done ethically and effectively, it can be exceptionally rewarding for both the donor and the board members who help with fundraising. Effective fundraisers are successful because they connect with people who care as much as they do about the cause and mission, tell the story of the work in a way that appeals to those who are motivated to give, and offer these prospective donors the opportunity to make gifts in ways that will appeal to and work well for them. It's pointless to fool or harass people who don't care in an effort to get them to give. But engaging people who care to leave a legacy, people who care about the cause and want to make a difference—that's a win-win!

Officers

Most nonprofit organizations have multiple officers, and the laws of most states in the United States require certain offices—most commonly, chair (sometimes called president), secretary, and treasurer (sometimes the roles of secretary and treasurer are combined).

Committees and Task Forces

Boards engage in much of their work as a full group and, ideally, all members work as a team to accomplish the work of the board. Nonetheless, more than 90 percent of U.S. nonprofit boards also have created committees and task forces to help the board do its work (Ostrower, 2007), and these entities are part of the governance system of the organization. For most boards, some of these units are permanent or “standing” structures, whereas others accomplish a specific task and then disappear. It is increasingly common for boards to refer to the permanent structures as “committees” and the limited-term entities as “task forces” or “ad hoc committees,” although some organizations do use the labels interchangeably. It is common for board committees to be composed entirely of board members, yet a growing number of nonprofits also invite non-board members with unique expertise, knowledge, or interests to serve. (However, it must be noted that some states such as California recently have changed their laws to disallow non-board members to serve as members of committees when the committees have the authority to act in place of the full board.) Key standing committees typically are specified in the organization's bylaws, which also should explain their purpose and role(s).

The following are among the most common types of standing committees:

1. Executive Committee. This committee is typically composed of the officers, and sometimes also will include committee chairs or selected other board members. It usually has the authority to act on behalf of the board between meetings and to address organizational emergencies. Some executive committees have the authority to act independently, but many are required to have their actions subsequently ratified by the full board.
2. Nominating Committee. This committee has the responsibility for recruiting candidates for board and committee membership and preparing a “slate” of candidates or nominees for consideration and action by the full board; many also nominate officers. It is increasingly common to define this committee's responsibilities to include a year-round cycle of board development activities, including new member orientation, member self-assessment, board self-assessment and development, and the development of board training programs and retreats. When operating with this enlarged portfolio, such committees often are called Board Development or Governance Committees.
3. Fundraising or Development Committee. This committee usually is responsible for working with staff and board to organize and implement the organization's fundraising events and activities, including the solicitation of major gifts and grants.
4. Finance Committee. This committee is responsible for planning, monitoring, and overseeing the organization's use of its financial resources, including developing a budget to allocate the organization's funds. This committee will develop for board action the financial policies the organization requires. Unless the organization has a separate Audit Committee, the Finance Committee also will oversee and review the organization's independent audit or financial review.
5. Personnel Committee. This committee usually is responsible for planning, monitoring, and overseeing the organization's use of its human resources (paid and volunteer). This committee will develop needed personnel policies, including policies guiding performance management and supervision, employee compensation and benefits, and handling of grievances.
6. Program Committee. It is not unusual for nonprofits to have one or more committees to oversee the organization's system(s) for delivering quality services to clients, and to engage in some form of monitoring and oversight to ensure that these services are provided in a timely and responsible manner. Such committees may handle certain relations with community leaders and interest groups that have key interests in the programs of the organization, as well as planning for program development or refinement to meet future needs.

It is important that committees and task forces only do work that legitimately is the responsibility or prerogative of the board, and care must be taken to ensure that these structures complement rather than interfere with the staff operations of the organization and the general oversight that should be provided by the full board. Many boards in older organizations have concluded that they have too many committees; since the mid-1990s it has become something of a trend among U.S. nonprofit boards to decrease the number of standing committees and use task forces more frequently to address specific issues of strategic importance as they arise (BoardSource, 2015; Taylor, Chait, and Holland, 1996).

Characteristics of the Strong Nonprofit Board

What are the characteristics of the well-developed board—the board that is able to recruit, retain, and mobilize its members to do the essential work of a board of directors? A review of the literature suggests the following key characteristics:

• The effective board organizes its work in ways that make effective (and often creative) use of the limited amount of time that members can commit to the organization.
• The effective board is good at matching the skills, abilities, and interests of its members with the work it needs to do, and it invests in preparing its members to do this work.
• The effective board understands that, at core, success is grounded in building effective relationships—relationships among the members of the board, relationships between members and the board as a whole, relationships between the members and the overall organization, and relationships with external constituencies. These boards take care to nurture and sustain these relationships.
• The effective board recognizes that one of the most valuable assets it brings to the nonprofit is its members—their time, talent, and service. It understands that the highest and best use of member time is to provide leadership, strategic direction, and oversight to the agency, and it recognizes the opportunity cost inherent in dribbling away member time by involving them in irrelevant activities that divert their attention from the most important work they could do.
• The effective board creates an infrastructure of support that helps members accomplish their work efficiently and effectively. Member time and talent are effectively leveraged because the support, systems, and technology exist to enable their work. Two kinds of infrastructure are provided:
  • Infrastructure that supports members' work together, such as communications technologies and information systems, and
  • Systems to provide the information that the board needs to accomplish its work.
• The effective board is thoughtful about and takes the time to reflect on what its does well and what could be improved—and it uses this information to improve both board performance and the quality of each member's experience as a board member. The effective board understands that board effectiveness is a journey and a process, not a specific state of being. It is thoughtful about growing its capacity to perform, and focuses on the high-leverage targets of opportunity for growing board capacity.

Competencies of Effective Boards

What are the key elements of nonprofit board effectiveness? Why do some boards perform well when many others do not? One of the foundational research initiatives to examine these questions was implemented by Thomas Holland and colleagues in the mid-1990s. They examined the differences between boards that were reported to be more versus less effective and identified six core competencies that were associated with the best-performing of these boards. Even the most effective of these boards varied in the degree to which they had mastered each of the six, but there were clear relationships between the degree to which each board exhibited each of the competencies and their overall performance as a board. The six key dimensions of board competence are the following (Holland and Jackson, 1998, pp. 122–123):

• Contextual competence: the board understands and takes into account the culture, values, mission, and norms of the organization it governs.
• Educational competence: the board takes the necessary steps to ensure that members are well informed about the organization, the professions working there, and the board's own roles, responsibilities, and performance.
• Interpersonal competence: the board nurtures the development of its members as a group, attends to the board's collective welfare, and fosters a sense of cohesiveness and teamwork.
• Analytical competence: the board recognizes complexities and subtleties in the issues its faces, and it draws upon multiple perspectives to dissect complex problems and to synthesize appropriate responses.
• Political competence: the board accepts that one of its primary responsibilities is to develop and maintain healthy two-way communications and positive relationships with key constituencies.
• Strategic competence: the board helps envision and shape institutional direction and ensure a strategic approach to the organization's future.

Helping Boards Meet the Challenge

Nonprofit governing boards often are criticized for poor performance, and there seem to be an increasing number of egregious examples of board dysfunction. However, it is time to recognize that we're really not doing enough to help governing boards and their members to be successful as they serve in these special roles of public trust. About half of all mid-sized and larger U.S. nonprofits' boards report that they have engaged in some regular board development process (BoardSource, 2015). There is clear and growing evidence that nonprofit boards that engage in a regular systematic approach to board development are more effective and their members are happier and more productive on behalf of the organization (BoardSource, 2015; Renz and Andersson, 2013). Appropriate board development activities can have a positive impact on board member performance as well as overall board effectiveness. Brown (2007, 2013) reports that effective member recruitment, selection, and orientation practices enhance board member engagement and performance; other research suggests that a well-designed program of board development can make a difference in the performance of a nonprofit board and, ultimately, in the financial performance of the organization (Holland and Jackson, 1998). Similarly, Cornforth (2001) reports a direct relationship between the effectiveness of nonprofit boards and (a) the knowledge and skills of board members, (b) the clarity of their board member roles and responsibilities, and (c) board members and executives coming together on a periodic basis to assess how well they are working together. It is a reasonable to conclude that activities that improve board members' knowledge and skills and clarify their roles and responsibilities will therefore enhance board effectiveness as well.

One of the major impediments that keeps the typical board from engaging in ongoing board development is the sense (or worry) that it will involve too much effort and time, and that it will be a distraction from “our real work.” However, an effective board development approach will not divert attention from important matters. To the contrary, it will focus attention in a more efficient way on one of the core responsibilities of every nonprofit board—the responsibility to be a good steward of its members' time and talent and to ensure its own effectiveness. In other words, effective boards engage in a systematic ongoing process of development because they understand that this will make a difference in the value they deliver for the organization, and because it makes a difference to those who serve on the board. It's no fun to serve on a dysfunctional board!

Being systematic does not require a board to be exceptionally elaborate about its approach, nor to consume hundreds of hours of member time each year. Indeed, one of the greatest challenges confronting most boards today is that they barely can find the time to get enough members together to handle the regular required business, much less to take time for what some might consider “add on” activities. Thus, efficiency in the development process is important. However, the irony is that those boards that take a minimalist approach to development generally undercut their ability to bring members together for the small amount of business they do try to accomplish because service on their board is so boring and unrewarding! Members attend meetings (if they do at all) only out of a sense of duty or obligation rather than because they feel their time and talents are being used well to make a difference. Efforts to minimize development time actually can backfire when it comes to member commitment as well as board performance!

Eight Core Principles for Growing a Board

There are eight principles that board leaders will do well to recognize as they consider the range of options they might employ to build their boards' capacity.

• Principle 1. Nonprofit organizations cannot be successful for the long term unless they have governing boards that are effective. There is a high correlation between nonprofit organizational effectiveness and board effectiveness (Brown, 2007; Herman and Renz, 2008; Renz and Andersson, 2013). A board's effectiveness is important to the organization's performance and quality of service to the community.
• Principle 2. Board design is about the future, and all board development needs to be done with the future in mind—both the conditions that the organization will face in the future and the organization's needs for the future to address those conditions. Hockey star Wayne Gretzky is reputed to have said that his success as a hockey player was due to the fact that he always made it a point to “skate to where the puck was going to be!” Boards should take this point to heart! Some of the most important of board work involves bridging from the realities of today to the vision for tomorrow.
• Principle 3. There is no one single design or model for board development that automatically will be best for all organizations. The board is part of two larger systems—the organization and the larger community environment—and so its design and development need to be aligned with the needs and characteristics of these environs. Boards serve different functions and roles at different points in the life and development of their organizations, and these differences must be taken into account when determining the most useful board development process. Further, the research to date on board development initiatives suggests no one model seems to be better than another. In fact, there is evidence that what makes a difference in board development is the organized use of any thoughtful and well-developed systematic approach to development (Gill, 2005; Nobbie and Brudney, 2003).
• Principle 4. Focus on principles, not “best practices.” The notion that there are practices that are universally best is flawed—at best, there are “promising practices” that are worthy of consideration, but one can never claim that a given practice will be “best” until the organization's issues, needs, and circumstances are taken into account (Herman and Renz, 2004, 2008). There are many good resources that offer examples of useful practices (for example, checklists, training programs, board development tools; consult the Internet resource website for this Handbook for further information). But until an organization knows what it needs, these are merely resources.
• Principle 5. Leadership is critical and pivotal to board success and, therefore, to board development. Every change process, including every development process, needs to have at least one champion who will make it his or her goal to advance the development process (Kotter, 1996). However, serving as “champion” is not the only leadership role in any board; responsibility for leadership must be shared among all members of a team, as they provide both mutual support and encourage mutual accountability for the board's work.
• Principle 6. Structures never guarantee performance in organizations (or communities), although they can get in the way and screw things up. Performance derives from the behavior of people, and it is not possible to guarantee performance through the creation of structures. Therefore, we need to develop and keep only as many board structures (such as offices, committees, terms, reporting relationships) as are useful for the next stage of board work. It is important to take care to nurture the “soft” or process aspects of the board's work, because the processes are the dynamic vehicles for bringing structures to life (see the next principle).
• Principle 7. Effective boards, by definition, are teams. Teams are groups of people who are working together in a mutually-accountable way to accomplish a shared goal or outcome (Katzenbach and Smith, 2003). If this definition does not describe a governing board, then that board is not living up to its legal and ethical obligations as a board! The shared outcome always is defined as the success of the organization. Thus, team building is always an important dimension of any legitimate approach to board development.
• Principle 8. Every effective development process must “meet” the people of the organization or board “where they are,” and each organization and board must build from the level of development and capacity that exists at the time they begin the development process. Regardless of what you wish, the board is currently at some level of development that must be recognized for what it is—the starting point for growing the board. So the process starts at this point. Further, it must be recognized that there are going to be limits to how much can be done or what a board can accomplish in a given time period. It makes no sense to assume or wish that a board is better positioned than it is (nor worse than its situation is). Nowhere is this going to be more true than in working with an all-volunteer group of people from the community, people who always will need to balance their board work with the other demands of life, family, and work. To this end, do not wait until or look for the “perfect time” to start a development process—conditions never will be close to perfect for any typical board. Start now and begin with whatever is feasible to begin to help your board develop.

The Board Development Cycle

Effective boards grow and develop (intentionally or not, knowingly or not) through a relatively predictable process that progresses through eight specific phases, each of which contributes importantly to development. These phases of development are unlikely to occur in a distinct linear sequence, yet we do observe that there is a general progression through them that is common to most boards. This progression in development builds to become a renewing cycle that boards use to their advantage. In reality, this developmental process tends to be implemented rather intuitively, since few boards give much overt thought to their overall development and growth. However, when understood and used in a systematic manner, this approach makes it possible for a board to develop in more efficient and effective ways.

The effective board grows and develops in capacity to serve as it:

• Organizes itself to efficiently and effectively accomplish the work it must do for the organization
• Attracts to the board table a group of people who will enable it to do this work well
• Prepares these people to effectively serve in their roles as members
• Helps these members work together as a team to accomplish their work
• Focuses members' attention on the right issues and questions
• Engages and motivates its members to retain their involvement and service
• Employs members' time well, in meetings and other activities
• Evaluates and develops its own performance, as a group, and uses this information to refine its design and practices to improve its effectiveness for the future

The eight phases in the process of governing board growth and development undoubtedly take different forms for each board, yet every effective board addresses each in some active way as it develops.

Of course, in real organizational life, these elements tend to blur, overlap and interact in ways that cause them to influence each other. And in young and relatively undeveloped boards, led by inexperienced leaders, many of these elements are likely to be implement informally and even unknowingly—yet each of these elements is addressed in some way, in better or worse ways, by every board that actually grows to operate as a board. Figure 5.1 illustrates the general sequence and flow of the eight elements of the board development cycle.

Each of the eight elements of the board development cycle illustrated in Figure 5.1 contributes uniquely to the capacity and performance of a board. Some of these elements are most usefully implemented in a sequence (for example, recruiting and selecting members logically precedes building those members' capacity). However, it also is likely that many of these elements will overlap in their implementation (for example, “ensuring strategic focus” relates to essentially all of the other elements). Therefore, it is useful to recognize that the eight elements of the board development cycle are neither mutually exclusive nor do they occur in a purely sequential, lockstep way. In fact, for boards just beginning to address development, working on any one of these, individually and separately, can have utility for building board capacity if that element is a key source of dysfunction or difficulty. However, the extended value of the board development cycle framework lies in the recognition that the value of each element is substantially enhanced by linking it to and growing it with other elements in the cycle.

The following presents the sequence of the board development cycle from the perspective of a new organization that is just starting out with the development of its board. Each section offers a basic explanation of that element of the cycle and provides a few insights into its importance to overall board function. (Additional information about each of the eight is available at the Internet resource website for the Handbook. Included on the site are ideas and suggestions for various development options and activities that might be considered useful by a board working to address each element.)

Element A: Define the Work, Design the Board

The board of directors of a nonprofit organization should design itself based on the needs of the organization and the work that the board will need to do to support the organization's next generation of work. And until the board knows what is needed from it, it cannot usefully determine what it should do or how to organize to do it. The wise board organizes itself from the perspective of clarity about the needs of the organization and what it can do to uniquely add value to mission accomplishment, and then designs itself to do that work. The contributions that must be made by the board of a small start-up organization are going to be quite different from the contributions of the board of a mature organization. The work is going to be different. And some board designs match some stages of organization development better than do others. (For a very useful perspective on how boards and organizations must align as they progress through their various “life stages,” see the 2008 work of Susan Kenny Stevens.)

So the process needs to begin with gaining clarity about the work and results that the board will need to deliver to advance the work of the organization in its next generation of service. Board design includes multiple elements, including structures (such as committees, task forces, offices) and processes (leading, meeting, making decisions, monitoring, communicating). And it is based on a clear delineation of the roles that the board will play in the leadership, governance and management of the organization. For the organization with staff (paid or volunteer), this definition will include explicit distinctions in the roles to be served by the board and its members as compared to that of the chief executive and other staff. Research indicates that much board member dissatisfaction is rooted in members' lack of clarity about their roles and the work they are to do. In fact, lack of role clarity is one key reason that people leave the organization. Role clarity is especially critical when aligning the work of the board and the chief executive; lack of clarity is a recipe for unproductive conflict waiting to happen. (The complex and sensitive topic of how to sustain a productive board-executive relationship is addressed extensively in Chapter Six of this volume.)

Element B: Recruit and Select Members

Recruitment and selection of the right group of members is one of the most fundamental elements of board development. To echo the advice of management author Jim Collins (2005), an essential element of organizational success is to ensure that you have “the right people on the bus.” Every board must find people to serve, and every board engages in activities that will make this happen. The key concern is whether the board is thoughtful, systematic, and disciplined about member recruitment. Far too many boards haphazardly pursue the wrong candidates for the wrong reasons, place them on the board, and then become terribly frustrated when things go poorly. A large proportion of board performance problems can be traced directly back to an ineffective or counterproductive member recruitment and selection process. Ignore this element at your peril!

Recent research documents that effective recruitment and selection practice is very significant to board effectiveness (for example, Brown, 2007; Cornforth, 2001). The effective nonprofit board will engage in a recruitment and selection process that builds on the insights it gained during its work on Element A (Define the Work, Design the Board). From its understanding of the work it needs to do for the organization in the future, it will then identify what it needs from its next generation of members (knowledge, skills, abilities, connections, and other characteristics), assess its current capacity from the perspective of these needs, and then engage in a systematic process of seeking, locating, and recruiting additional members who will be right for the next-generation work of the board. It will take care to find the right matches between the organization's needs and the needs and interests of prospective members, including taking care to ensure that its membership is appropriately diverse and reflective of the community the organization exists to serve. None of this is to suggest that this element must be implemented in a drawn-out and bureaucratic way: it is possible to be proactive and systematic without getting bogged down in an excessive process.

Element C: Prepare Members to Serve

Effective boards recruit people to serve as members because they bring knowledge, skill, and an array of talents and assets that the board envisions will be important to its future success. But it is not enough to simply bring talented people to the board; the effective board will help its members to put these talents to work in ways that are particularly useful for both the organization and the member. This type of preparation often begins with helping the new member understand the nature and scope of his or her role as he or she becomes an active member of the board, and an increasing number of boards offer some form of useful member orientation process for their new members. In fact, this member preparation usually begins at the recruitment and selection stage with an explicit description of the roles and expectations that the board has for its members (for example, requirements for meeting attendance, or whether members work on fundraising).

This is a good start, but the effective board will provide much more in the way of preparation and support for its members. Recent research also confirms that member development activities for members are positively related to effective board performance (for example, Brown, 2007; Holland and Jackson, 1998). Such development helps members better understand their work, the work of the organization, the challenges that the organization and board believe will be most important to address as they proceed with their work, what they envision will be the board's role in helping to address these issues, and how the board works together as a group or team. Further, a strong board will provide regular ongoing support to all of its members, not only those who are new, to help them serve effectively. Every member's knowledge and understanding will need to grow and develop as the organization's circumstances evolve. This dimension of support for members is not only important from a board perspective; many board members value their time on a board because they gain new knowledge, skills, and perspectives through their board service that they can use in other venues of their lives. As such, member development can become a motivator as well as a support for improved board member performance.

Element D: Build the Board as a Team

Much of the power of the effective board derives from the synergy that results from individuals coming together to do things that they could not do as well by themselves. When individual board members first meet, they are a group. Yet board work is inherently team work. The board's authority and responsibility, legally and ethically, derives from its work as a collective body. The thoughts and decisions of specific individuals, no matter how bright or relevant, cannot be represented as the work of the board unless and until the board collectively adopts them as its own. In other words, a board must develop to the level of working as a team in order to serve effectively.

Taylor, Chait, and Holland (1996) report that high-performing boards actively work to build their capacity to work as a team. In their words, these boards “focus on the constellation, not the stars!” While some board leaders may debate whether a board is or needs to be a team, it is entirely clear (as a matter of definition) that a board cannot truly function as a board unless its members come together to serve as a team. If there is no shared purpose the board members are working together to accomplish, then they cannot possibly be serving effectively as a board. If nothing else, the duty of loyalty compels it! Of course the typical board member joins a board for just this purpose—to work with others to help see that the organization progresses in its efforts to accomplish its mission and vision.

Of course, it is one thing to assert that a board is or should be working as a team, it is another to actually achieve this. A critical yet often overlooked element of board effectiveness is investing time and attention in helping the board's members work together effectively. This is central to this element of the board development cycle. Ironically, many board members and leaders know a fair amount about teams and how to grow them because they've had team development training at work, provided by their employers! And yet it is rather uncommon to find a board whose leaders are capitalizing on widely available information and resources that exist to support team building and development to enhance their board's effectiveness.

Element E: Create and Sustain a Strategic Focus

Boards are “all over the map” when it comes to their work. Some operate exclusively at the policy governance and leadership level of work, some serve in both governing and management roles, and still others serve all roles in the organization—as governor, manager, and as operations staff. But the one level at which all boards must work is the strategic level, doing the work of governance and leadership. One of the greatest challenges many boards face is that of sustaining their focus at the strategic level. For understandable but problematic reasons, boards often become so involved in the details that they lose all sense of their unique responsibility to make strategic choices. Indeed, in organizations with staff, this can become a critical source of tension between the board and the organization's top levels of executive management; board members become heavily involved in management or operations and become resented for their duplication of or interference with the work of the rest of the organization (the so-called problem of board micro-management).

This board development element is especially linked to all other elements of the board development cycle. Several aspects of creating and sustaining a strategic focus must be integrated with each of the other elements. For example, the issue of strategic focus and the board's role is central to board design issues, such as committee and role descriptions. But the challenge of strategic focus is equally relevant when we recruit members to serve on the board. If a board does not ensure that the members it recruits are able to work with an appropriately strategic focus, then it is doomed to fighting an uphill battle for its entire tenure.

There are multiple ways that boards and their leaders can help to ensure that the board works with and provides the strategic focus that the organization needs. Useful resources are available at the Handbook's Internet resource site.

Element F: Implementation: Engage Members to Do the Work

Certain aspects of board development are likely to be most effectively accomplished as the board and its members actually engage in the process of implementation; that is, doing the work planned and organized during the earlier stages of board development. Key among them is the set of issues associated with engaging and motivating members to play their roles—the entire process of handling board members as a special type of volunteer. We know quite a lot about volunteer management and what it takes to engage and motivate volunteers, yet, similar to our tendency to ignore the extensive team development literature, we find that most boards are not adequately attentive to matters of engaging the board member as volunteer. (The guidance on volunteer management provided in Chapter Twenty-Four is especially relevant to this point.)

Element G: Conduct Effective Meetings

The crucible within which boards do much of their most critical and essential work is the meeting—the time during which board members come together to organize and implement their work on behalf of the organization. Too long, too short, too disorganized, too narrow, too unfocused—the complaints and concerns are multiple and frequent. Meetings are among the most disliked elements of board service for many members, yet the typical board chair or meeting leader spends surprisingly little time organizing and conducting meetings to ensure that they are efficient and effective venues for board work. There are boards that have developed strategies to use meetings to full advantage and to do so in ways that are motivating and energizing for all who participate. These meetings capitalize on the diverse and unique talents at the table, and they create a productive and engaging environment that results in board accomplishment. These meetings are used as tools to advance board performance, and they are effectively organized and conducted by chairs who have mastered the art of the effective meeting.

As with the topics of team development and volunteer management, there is a practical body of literature that exists to help board leaders understand how to organize and conduct meetings effectively. And as with team development, board leaders as a group have tended to ignore the practical advice that this literature offers for using the board meeting effectively. A few useful resources on the topic of board meeting management are included in the Handbook's Internet resource website.

Element H: Assess and Enhance Board and Member Accountability

Accountability is an increasingly critical issue in all corners of the nonprofit world, and it is an issue that boards must address at multiple levels. As noted earlier in this chapter, new guidelines and expectations are being recommended and sometimes even mandated by a myriad of actors, including state and federal regulators, watchdog agencies, funders, and even constituent advocacy groups. Growing pressures are developing across the sector for enhanced “self-regulation.” But the effective board is not reacting to these external calls for accountability, it is taking the lead. A growing number of nonprofit boards today are engaged in at least basic forms of self-assessment and development (BoardSource, 2015), usually via some form of self-assessment and subsequent development activity. Effective boards recognize both the imperative and potential benefits of doing so.

Effective boards set goals for their own performance, both long and short term, and they implement processes by which to assess their accomplishments and evaluate how they could be more successful. Some boards have linked self-assessment processes to gather information to assess whether board members meet the expectations that they set (for example, attendance, personal giving). Some board members are uncomfortable with such activities, but a growing number support board self-assessment and consider such efforts appropriate and beneficial. These boards are proactively developing their own systems and practices for gathering performance information at multiple levels—about organization performance, about board performance, and even about the performance of individual board members. It is essential to point out, however, that the focus of these systems is not merely on gathering and presenting performance information with a “report card” mentality—it is about using this information as the basis for refining and redesigning operations to continuously improve effectiveness. A growing number of useful tools exist to help boards engage in self-assessment initiatives. They include the Holland and Jackson's (1998) Board Self-Assessment Questionnaire that focuses on the six competencies discussed earlier in this chapter; a BoardSource self-assessment system that is based on Ingram's ten core responsibilities of nonprofit boards (Ingram, 2008) that now is available online; and the relatively new online Board Check-Up system developed by board researchers Yvonne Harrison and Vic Murray. (Details and links to all of these resources are available on the chapter's Internet resource site.)

Regardless of the specific tools and approach, effective boards take time on a regular basis to reflect on what is working well and what might be improved, and they use this information to help inform how they might refine their design and practices to be of most value to the organization and to the board's own members. And this discussion is not couched in terms of “What's bad?” or (even worse) “Who's to blame?” It is framed from a developmental perspective with a focus on two key themes: (1) What does our organization need of us, in our next generation of work as a board, to uniquely add value to the accomplishment of the organization's mission? and (2) How might we refine the way we are organized and do our work to make the most effective use of the resources that we, as a board, have at our disposal? As the board considers its findings from the assessment process, the next step is to use these findings to refine the board's design for its next generation of work—which is the linkage to the focus of Element A of the Board Development Cycle: Define the Work, Design the Board.

Where to Start?

A nonprofit organization might begin the development cycle with any of the elements, although there are two most likely phases at which a board will enter the cycle. In the case of the new organization that is just beginning to organize its board, leaders usually will begin (knowingly or not) with the work of Element A: Define the Work, Design the Board. Those engaged in creating the board are going to engage in some form of design, and their design will be based on some sense of what the board's work needs to be. They may be analytical and thoughtful about the work to be done and choose the design that best advances it, or they may simply imitate some other board design (too many boards simply copy their bylaws from those of another organization without giving any thought to whether those bylaws will be suited to the work their board needs to do). However it occurs, the fact is that some kind of design is adopted when an organization officially starts its existence.

For the board of the nonprofit that has been in operation for some time, it would be typical for the organization to enter the cycle at Element H: Assess and Enhance Board and Member Accountability. This is the phase during which the organization takes stock of its situation, assesses how well its design and actual performance meet the needs and expectations of the organization, and considers what this means for its next generation of service. It is during this phase that the organization determines whether changes are likely to be needed and, if so, generates information that will inform the next phase of work.

Effective nonprofit agencies invest time, energy, and money in building and sustaining their effectiveness. This section of the chapter has explained how boards may be developed and sustained through the use of a board development cycle comprising eight relatively sequential yet overlapping elements. Each element adds unique value to the success of the board, each poses its own design and development challenges, and each contributes in its own way to board success.