Five Good Ideas

Managing Effective Board – Executive Director Relationships

Published on 29/09/2005

The board of a nonprofit organization has three major functions: fundraising, governance and overseeing that the organization’s major goals and mission are being met. For many boards there is a combination of these roles for the directors. However the board’s function is NOT to manage day-to-day operations.

Executive directors and members of management are involved in the organization on a daily basis whereas board members usually meet once every three to four months. At meetings, board members must be brought up to date on the organization’s activities as an information “abyss” can exist and must be dealt with. The purpose of the board is to create value for the organization. How do we maximize directors’ time and value when they attend board meetings?

What information does the board need?

The chair of the board and the executive director must collaborate in advance of the meeting to carefully consider what materials are relevant for board members and to structure an agenda for the meeting. Board members must receive an agenda and relevant information needed to participate in the meeting. Often the executive director will also provide an executive summary report highlighting what has taken place within the organization from the last board meeting to the current meeting. This presentation should be approximately five minutes.

An experienced and effective chair is essential if board meetings are to be successful. To assist in the process of identifying existing board members as a potential chair, review each director’s skill sets. Do they have the right leadership skills? If you do not have a natural successor to the current board chair it is the responsibility of the organization to bring in an appropriate board member in a timely manner, and provide experience so they can become the next chair.

In order to maintain a variety of stakeholders at the board it can be mandated within the by-laws that a director must come from a particular sector. If the executive director is leaving and would like to remain engaged in the organization, it is appropriate to have a two year ‘cooling-off’ period before he/she can join the board.

An executive committee can be helpful in improving communications between the board and the executive director. Both the board chair and executive director participate in sharing information and making decisions that cannot wait between major board meetings and do not require full board approval (or can be ratified later by the board). Generally the powers of the executive committee are set out in the organization’s by-laws.

Timeliness

The majority of nonprofits’ bylaws stipulate the board should receive a certain amount of notice prior to a meeting. Most executive directors will book the board for the monthly meetings well in advance. However, often the meeting is scheduled but the information for the meeting is not provided in a timely manner. Board reports and agendas that board members need should be delivered with sufficient time for review – a minimum 72 hours in advance – ten days is preferable.

If a board member has not read the material (and it was provided in advance), the chair has to be prepared to shut down questions which have already been answered in the background material. A simple reference to the material should be enough; do not waste time answering questions that have been addressed in the report. A useful tip for the executive director is to call the directors a day in advance to make sure they have received the materials and to ask if everything is clear.

The agenda should assign specific time allocations to each agenda item. During the meeting it is the responsibility of the chair to keep the agenda on time.

To encourage board members’ engagement, one suggestion is to ask directors at the start of each meeting to comment on what they have done in the past several months to further the interest of the organization. For example did you speak to someone about the organization? Did you secure a donation? In addition management should encourage board members to visit the office of the organization to see how it is run on a daily basis or to visit a particular service or program. Ensure that the board members know the organization well. This will always improve communications.

At the end of each meeting always leave 10 minutes for an ‘in-camera’ session. An in-camera session allows the board to meet alone for discussion without the executive director and other staff members. It can become an environment where the board does not feel threatened or constrained by management. It is also an opportunity for new board members who may not feel comfortable speaking out initially.

Minutes for the in-camera session are taken separately from the main meeting’s minutes and are retained by the chair. A crucial aspect of in-camera sessions is that the chair must sit down with the executive director immediately following the meeting (or early the next morning) to relay what was discussed to ensure that the relationship between the board and the executive director is not undermined. Management should not feel disheartened by an in-camera session. Often times there will be nothing to discuss and it is simply an opportunity for board members to interact with one another. However be consistent and incorporate the session into each meeting so that it is used regularly and not only when, for example, there are difficult personnel issues to resolve or performance reviews to complete.

Use Plain English

Use plain English or the common language of the group especially when addressing technical areas. Most people do not understand jargon, so do not use it at the board level. If you must use jargon break-it down so it is understandable.

Recognize that the chair and the executive director have more information than other board members, a situation that can influence the direction of board discussion. This is known as “anchoring” – getting stuck around the information provided by the executive director chair or another board/staff member. This information may be biased in some way or may not provide sufficient context for innovative solutions. One solution is for the chair to designate a board member as a devil’s advocate.

Make use of a Consent Agenda

Minor decisions that need little to no discussion can be grouped into a “consent agenda”. The board can review these items in advance and the consent agenda can be dealt with at the beginning of the meeting, saving time for more substantive agenda items. The executive director should call board members within 24 hours of the meeting to ensure that they received the agenda/ information package and to ask if there are any questions about the items on the consent agenda.

How do you determine if the item should be on your consent agenda? One rule is the ‘ten percent’ rule – if the item impacts 10% of your budget, it should be discussed as a separate item at the board meeting, otherwise it can be on the consent agenda. Another rule to consider: if the item has a material impact on the organization, it should not be a consent item.

Record and verify the minutes asap

Once the meeting is over, draft minutes must be sent to board members within 24 hours of the meeting. If the executive director does not receive comments back from board members within 72 hours, the draft minutes then become final.

Five Good Resources

  1. BoardSource
  2. Institute on Governance
  3. Making Time for Good Governance, Douglas Macnamara and Banff Executive Leadership Inc., Leadership Acumen, Issue 11, August 2003.
  4. The Best of Board Café, Jan Masaoka, Saint Paul, MN, Amherst H. Wilder, 2003
  5. Volunteer Lawyers (Ontario)- 10 Point Legal Health Checkup for boards

DiverseCity on Board also has number of valuable resources on board governance.

Richard Powers

Associate Dean at the Rotman School of Management

Rick is Associate Dean at the Rotman School of Management. After receiving his MBA and LLB from Queen’s University, Rick worked as a corporate lawyer for a national Canadian law firm. He later served as Corporate Counsel for Honda Canada Inc., before joining the University of Toronto. After teaching and serving in several administrative roles at the University of Toronto at Scarborough, Rick joined the Rotman School of Management in 2005. He has completed a 5-Year term as the Associate Dean and Executive Director of the Rotman MBA and Master of Finance Programs. Rick’s areas of expertise include corporate governance, ethics, business and corporate law, strategy and sports marketing. A recipient of numerous teaching and student awards, Rick received the Dean’s Award for Excellence in Teaching at the Rotman School of Management in January, 2013. An internationally recognized expert in both corporate and not-for-profit governance, Rick is the National Academic Director of The Directors Education Program and the Not-For-Profit Governance Essentials Program (in partnership with the Institute of Corporate Directors – ICD). He also teaches in Rotman’s Executive MBA, OMNIUM, MBA and Executive Education Programs. He is a director of several not-for-profit organizations and frequently comments on legal and governance issues in various media across Canada.