Estimated Reading Time: 6 minutes
By Melanie Lockwood Herman
The Tom Wolfe book “The Right Stuff” chronicles the lives of a group of navy test pilots as well as the early years of the U.S. Space Program during the late 1940s to mid 1960s. The film version of the book reinforces the theme that while decidedly human, these pioneers of air and space had the skills, tenacity and courage to survive and succeed under extraordinary circumstances.
During the past year countless nonprofit organizations have been facing what can only be called extraordinary circumstances. With diminishing revenues and growing demand for services, many nonprofit boards have had to grapple with a range of very difficult decisions, from the need to trim programs and personnel costs to the closure of branch offices located in high demand communities.
Good governance and good risk management, while different, are essential to each other. This week I have been reflecting on the ingredients of an effective board. What qualities represent the “right stuff” when a nonprofit confronts difficult choices and circumstances? What constitutes the “right stuff” when a board gathers to discuss how it will protect and advance the mission of a nonprofit? And what conduct is most destructive to the goal of advancing a community-serving or other charitable mission?
Four critical leadership attributes rise to the top of my list for governing in tough times:
What is the connection between well-run boards and sound risk management? Highly effective boards are in an ideal position to discuss a nonprofit’s risk-taking appetite and ensure that the actions of the nonprofit—including its management of risk—align with its mission and values. Boards whose members view their service as an opportunity to achieve personal, versus collective goals, add to the risk profile of the organization. Ineffective boards:
Essential “musts” to build and sustain an effective nonprofit board include:
During recent weeks I’ve concluded that nonprofit boards tend to attract busy people and busybodies. Busy people juggle competing professional and personal demands while finding the time to contribute their expertise and support to the nonprofit. Busybodies seek appointment to boards to fill time and advance personal agendas. Busy people are eager to contribute to the collaborative shaping of strategies that will advance a nonprofit’s mission. Busybodies look for ways to undermine the nonprofit’s staff, fellow board members and agreed-upon protocols. Nonprofit organizations need and deserve leaders who bring the “right stuff”—unquestionable integrity, the commitment to collaborative problem solving, and the discipline to model the values of the nonprofit. Attracting and retaining effective board leaders is no easy task. And every nonprofit board member is an imperfect human being. But like the test pilots and early astronauts of more than 50 years ago, serving on a board requires courage, the willingness to take risk, and the fortitude to help shape and then enthusiastically embrace a collective mission that exceeds the dreams and aspirations of any single individual.
Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your feedback on this article and questions about the NRMC’s resources at Melanie@nonprofitrisk.org.
“First let me congratulate you on a conference well done. I had a great time at the Nonprofit Employee Benefits Conference and walked away with some valuable tools and questions that we’ll need to be addressing in both the short and long term. Thanks to you and your staff for all you do to provide us with quality resources in support of our missions.”
“BBYO’s engagement of the Center to conduct a risk assessment was one of the most valuable processes undertaken over the past five years. Numerous programmatic and procedural changes were recommended and have since been implemented. Additionally, dozens (literally) of insurance coverage gaps were identified that would never have been without the work of the Center. This assessment led to a broker bidding process that resulted in BBYO’s selection of a new broker that we have been extremely satisfied with. I unconditionally recommend the Center for their consultative services.
“Melanie Herman has provided expert, insightful, timely and well resourced information to our Executive Team and Board of Directors. Our corporation recently experienced massive growth through merger and the Board has been working to better integrate their expanded set of roles and responsibilities. Melanie presented at our Annual Board of Director’s Retreat and captured the interest of our Board members. As a result of her excellent presentation the Board has engaged in focused review which is having immediate effects on governance.”
“The Nonprofit Risk Management Center has been an outstanding partner for us. They are attentive to our needs, and work hard to successfully meet our requests for information. Being an Affiliate member gave us access to so many time- and money-saving resources that it easily paid for itself! Nonprofit Risk Management Center is truly a valued partner of The Community Foundation of Elkhart County and we are continuously able to optimize staff time with the support given by their team.”
“The board and staff of the Prince George’s Child Resource Center are extremely pleased with the results of the risk assessment conducted by the Nonprofit Risk Management Center. A thorough scan revealed that while we are a well run organization, we had risks that we never imagined. We are grateful to know that we have now minimized our organizational risks and we recommend the Center to other nonprofits.”
Great American Insurance Group’s Specialty Human Services is committed to protecting those who improve your communities. The Center team has committed to delivering dynamic risk management solutions tailored to nonprofit organizations. These organizations have many and varied risk issues, hence the need for specialized coverage and expert knowledge for their protection. We’ve had Melanie speak on several occasions to employees and our agents. She is always on point and delivers such great value. Thank you for the terrific partnership and allowing our nonprofits to focus on their mission!