In a time when disruption, insecurity, uncertainty and lack of funding are felt by many non-profit organizations, it’s important that an organization has a solid, healthy and passionate board at its helm. To be successful, non-profit organizations, both big and small, need to have good governance: it helps their management teams make good decisions, it protects them from risks, and takes on an operational role during times of change and transformation.
Over the years, Maytree’s longstanding lunch-and-learn program, Five Good Ideas, has asked a number of governance experts and experienced non-profit leaders to address the question of good governance from different angles. The experts agree that organizations with strong governance:
- Cultivate board diversity;
- Foster good board-executive director relationships;
- Insist on transparency and continuous information sharing; and
- Strive to engage their boards in the most meaningful ways.
Tom Williams, Professor at the School of Policy Studies at Queens University, argues that a non-profit board’s two most important objectives are supervising the management, especially the executive director, and ensuring that the organization’s mission and major goals are being met. Even though the board’s role is not to manage everyday operations of an organization, it must be well informed about the organization’s activities. The directors must be prepared to ask difficult questions of management to be sure they have the right information required to make informed decisions.
Medhat Mahdy and Tim Penner, drawing on their own experiences at the YMCA Greater Toronto, as the President and CEO and Chair, respectively, agree that a healthy executive director-board relationship is essential. Willingness to learn from each other and being open is necessary to create a trusting relationship. This requires ongoing, unstructured, free-flowing dialogue and investment of time. To build trust, the board must adopt a servant leadership approach. At the same time, the non-profit’s leader – a CEO or an executive director – should be ready to be open with the board about any weaknesses or problems, as this is an opportunity to hear another perspective to address challenges and get good advice.
In an atmosphere where demand for services is growing but revenues are limited, effective boards are essential to maintain and fulfill our mission. In his Five Good Ideas presentation, Rick Powers, professor at the Rotman School of Management at the University of Toronto, discusses how to ensure a board can be effective:
- Embrace increased transparency: Organizations need to be able to respond to requests for information and be forthcoming in their dealings with media and donors.
- Be aware of the need for increased accountability: This does not refer only to donors and funders but also to those groups charged with ensuring that the organization operates within the regulations and laws applicable within their sector.
- Pay close attention to conflicts of interest: Direct conflicts of interest are usually pretty easy to identify. Indirect conflicts are more difficult. Just as important, the perception of conflicts of interest needs be to addressed with the same rigour.
- Determine the skill sets you need: Regardless of the organization, strong governance requires particular skill sets. Representative boards are no exception. Determine what you need and get to it.
In her Five Good Ideas presentation, Helen Hayward, Director, Western Management Consultants, addresses the importance of diversity on boards and that it should be more than just another box to check off. Diverse organizations understand their community and clients better, and a diverse board helps build social capital and supports fundraising and marketing more effectively.
Helen says that in creating more diverse boards, organizations should look beyond their current needs and shortcomings. A well-articulated strategic plan that includes broad stakeholder engagement sets the direction for the organization and the priorities in the next several years. An important step in this process is developing a board matrix that includes an objective analysis of current make-up, future needs in governance competency, expected turn-over, board structure and membership.
Last but not least, good governance is characterized by an engaged board of inspired and passionate board directors. Robin Cardozo, Chief Operating Officer, SickKids Foundation, discusses how to put together a passionate and committed board of directors, given multiple distractions, busy schedules, and the limited time that volunteer board members have to commit.
Using the starting point that engagement is “inspiring someone so that they want to take action,” Robin shares several examples from his more than 25-year-long governance experience. He highlights the importance of the recruitment process – which includes an assessment of a candidate’s capacity to become passionately engaged, and a thoughtful orientation process that helps create a strong connection with the cause of the organization. Board engagement should be maintained by continuous, actively planned and meaningful conversations, as well as by looking for opportunities to get out of the boardroom and have fun.
Putting these good ideas into practice takes time, commitment and hard work. But once the foundations of strong governance are in place, an organization will be more resilient and better prepared for sailing the rough seas of uncertainty and disruption.