Board members have duties of care, loyalty and obedience that have to be fulfilled. Hence it is important for this set of individuals to be well versed with the industry and its working, from hiring to legal and paper works to capital campaigns and management of the organization.
Board members of a mission-driven organization are trusted individuals that have been chosen to steer the organization towards a future that is sustainable; responsibilities of a nonprofit board require skills, qualification and experience.
When it comes to decision-making, there are times when the board can make mistakes too. In this article, we will be looking at the top 15 mistakes that are usually made by the board and how this impacts the organization.
The few initial board members are most commonly friends of the founder(s). However, it is upon these friends to usher in individuals and professionals from outside of their circle. If this is not done, then it results in the failure to cultivate board diversity that in turn means that valuable perspectives may not be much in variety.
No personal preferences should be given a priority while making decisions for the organization. The organization must always come first. When personal gains and benefits come in between, it debunks the concept of transparency and honesty.
Rubber stamping or rough validation of an idea or an act can be a huge mistake. This is because when you sign up to be a part of an organization as a board member, you also make the promise to be trustworthy, careful and loyal. Failure to understand fiduciary responsibilities can lead to a breach of trust and mismanagement of the organization.
It needs to be understood that the executive committee takes decisions for the board when the board isn’t in session. However, it cannot function as a mini-board. Even founders of mission-driven organizations do not have the power to dismiss the decisions of the board. Deference to any position or individual by the board is wrong; no one person owns an organization.
The mission and vision are what defines the organization. All activities and strategies will revolve around one basic principle. Therefore, board members need to understand and absorb the values of the organization. Thus making sure that all actions and communications are in alignment with its core values. This will also ensure the right use of resources.
Board members should try to avoid micromanaging the staff. The staff reports to the Chief Executive of the organization; therefore it is wrong for the board to attempt direct control over paid staff. Similarly, the staff should not ask for assistance from the board when it comes to daily tasks that the staff is supposed to handle. It is all good when both parties know where to draw the line.
Boards of directors have to be well managed, even within themselves. Time spent on management needs to be efficiently monitored. It is advisable to know where you stand. Knowing when to invest in board management software will improve the entire working of the organization. Lack of assessment must be avoided to improve the overall health of your organization.
Ignorance isn’t always bliss. Especially when you are a part of a board, lack of awareness can create big problems in the future. For example, board members need to have thorough knowledge about compliance with certain legal requirements for tax exemption. The board should also be fully aware of the penalties that come with heavy political involvement, among others. As leaders in the sector, it is also a great practice for board members to read books on nonprofit work and management.
Boards have the right to hand over tasks to individuals within the organization. Tasks can also be outsourced, if the need arises. However, this should come with effective oversight – this could be in the form of policies and adherence to the same. Policies regarding reimbursement of expenses should also be well included.
Organizations, regardless of the industry, do have conflicts time and again. This can be within the office or with an outside party. In such a situation, the board must swing into action and solve the problem as soon as possible. Failure to do so questions the credibility of the board. Resolving a conflict must be done in such a way that it is fair to both parties.
Board members should be open to adapting to changes happening around them. Take technology for example; organizations across the industry are embracing the digital method of operations. Blending with the trend is often the key to keeping afloat. Mastering Board Governance in the Digital Age can go a long way in the growth of your organization.
The role of board members in an organization also includes giving annual donations to the cause of the nonprofit. Failure to do so is likely to give the impression that the board does not believe in the mission of the organization.
Changes in procedures of a nonprofit organization with updating the old documents can lead to scenarios of violation of rules and regulations. What you read on your document with signatures and logos is often considered the last word. Therefore, all documents should be revised regularly.
Maintaining confidentiality is one of the most important parts of the job. Everything that is discussed inside the boardroom should not leave the room. There must be trust among the board members so that the organization can put its trust in the board.
Operations are mostly handled by the staff. Providing the strategy and resources for operations is a role for the board. When board members are more inclined to operations, there is an imbalance in the workflow of the organization.
The biggest mistake here would be refusing to learn from past mistakes. Moving ahead is a good practice and developing from past mistakes is definitely a smart move. Good luck!
Author: Patrick J. Coleman
Patrick J. Coleman is the President of GiveCentral and Coleman Group Consulting. As a CEO to two enterprises, he is on a mission to help reduce costs and increase fundraising for all charities through ways such as mobile giving. With a diverse educational background and over 25 years of experience in operations leadership and strategic planning, he has developed a proprietary methodology that focuses on the art and science of negotiation to deliver measurable, implementable, and sustainable results. Mr. Coleman has served as Board President for Elk Grove United Way of Suburban Chicago, and as a board member of both Talkline/Kidsline and Public Action to Deliver Shelter (PADS).