We asked RISK eNews readers to weigh in on the top governance-related risks and challenges facing their organizations. Thank you to everyone who responded to our governance risk survey! With 67% of respondents ranking the issue as a #1 or #2 concern, the top board-related risk and worry was: “inadequate pipeline for board talent.”
Second and third place finishers in our governance risk poll were:
- Failure to follow written governance policies (or change them!)
- Difficulty (or unwillingness) to focus on the board’s principal role: setting future direction and strategy
Lower on the list of governance risks were tension between board and management, and conflict between board members.
Surprised by our poll results? Do these results resonate with your experience? At NRMC we receive numerous calls about the low-ranking worries in our poll, and far fewer about the top rated concern: lack of a talent pipeline for board leadership. One possible explanation for the disconnect between the frustrations leaders share with a risk coach and the concern causing them to lose sleep, is that the lack of a pipeline for board leaders is something we’re not comfortable talking about, especially with outsiders. Unlike an external risk–one over which a staff team exercises minimal control–the lack of an adequate talent pipeline is something you can and should do something about.
Risk Tips for Bountiful Board Development
Here are a few tips on board development from our team’s experience advising and serving on nonprofit boards.
- Broaden the scope of your board nominating committee to clarify the team’s responsibility for board development. This role includes identifying the qualities needed to build the board your mission needs today and into the future, identifying the policies necessary to make governance efficient and rewarding, and tackling challenges that arise in the life and work of the board.
- Make board development work a year-round activity. Too many processes consist of a last minute scramble to identify and nominate board prospects in time for the annual meeting or beginning of the fiscal year.
- Celebrate good governance by inviting people with passion to participate. Invite any and all board members who are interested in better governance to participate in the meetings of the governance committee.
- Retire the tedious and tired “work, wealth and wisdom” standard for board eligibility. Replace this weary mantra with qualities needed to set and advance a bold, strategic direction for your nonprofit. For me, the words passion, perspective, patience and persistence come to mind when I think about the board leaders who have most impressed me during my career.
- Respect your mission by identifying and vetting two or three times as many candidates as the number of open spots on the board. And make sure your vetting process includes a request to answer questions in writing, as well as an in-person or telephone interview with at least one member of your board development committee.
- Respect your board by resolving to eliminate time-wasting assignments and meetings. In our recent governance survey, respondents identified board member busyness–with professional and personal responsibilities–as the primary reason for lack of engagement.
- Develop a succession plan for key officer and committee chair roles on the board, by identifying the top candidates for these roles one year or more before their terms will begin. Include those in officer-elect roles in deliberations and meetings of the teams and committees they will lead. Provide training and support to help board leaders get ready to serve with confidence.
- Ask, don’t assume. Implement an exit interview process and resolve to interview all departing board members. Use the opportunity to thank departing members for their service, and invite their thoughts about what the board should do to improve governance, help members serve successfully, ensure diverse points of view, and find the best possible leaders to govern the organization in the years ahead.
Fun Facts and Interesting Insights About Nonprofits Boards
- Although the average board size is 18, the “best board size is the one that works for your organization and results in a board that’s effective and satisfied with what they can accomplish.”
- While only 48% of boards use a formal or informal self-assessment process, it’s not the process that makes the board great, “it’s the willingness to honestly evaluate their performance.”
- 53% of boards spend 25% or more of their meeting time on the mission and future of the organization, through discussion focused on strategic issues and strategy planning
SOURCE: What Makes for Successful Boards? 2017 ASSOCIATIONS NOW, Board Brief: A Quick Guide to Volunteer Leadership (several studies are cited in this excellent article)
Read the following additional articles about governance risk and reward on the new nonprofitrisk.org:
- The Garden of Risk Oversight: Positioning the Board to Cultivate Strategic Risk-Taking
- Enforcing Board Member Responsibilities
- Not So Great Governance? Resolve to Reinvent the Board
Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center and a trusted advisor to nonprofit boards and leadership teams. Melanie’s consulting work includes leading governance-themed risk assessments, ERM engagements, and youth protection initiatives. Melanie invites your inquiries about NRMC consulting services at 703.777.3504 or Melanie@nonprofitrisk.org.