While it’s helpful to review multiple studies about a particular issue, research about nonprofit board governance issues hasn’t been studied very much. That’s what makes the 2015 Survey on Board of Directors of Nonprofit Organizations by the Stanford Graduate School of Business such an excellent tool. The report brings out some important facts about known or suspected matters and highlights a few new ones.
As new year resolutions go, getting better organized seems an easy goal. Clearing out closets, files, and even email inboxes can be good for the mind — and soul. But what about the organization?
In response to the uncertain economic climate, the expectations for the culture of boards has changed. Shareholders know that the composition of the board of directors forms the cornerstone for strategic planning and strong performance. Investors have seen their fair share of governance failures in recent decades and they are starting to look at board compositions with a critical eye.
As the date for the board meeting approaches and the “to do” list grows by the minute, it’s easy to get caught in a panic. Just when you thought you had things under control, you find that one committee has not turned in its report, the location for the meeting needs to be changed, and six board members have still not RSVP’d. How will everything be ready in time for the board meeting?
At first glance, reading a board resolution is intimidating because of the formal language. In fact, once you know what components make up a board resolution, they are very easy to write. Before getting started, take a look at some other resolutions that other entities have written to get an idea of the format and language. A few people working together will be able to write one up in short order.
According to Team Technology, the terms groups and teams are often used interchangeably, although there is a distinct difference between them. Groups draw their members from a social community, whereas teams come together with commonality as a shared goal. In defining those terms separately, boards of directors are defined as being a team. The success of the whole team depends upon the team players being dependent and interdependent upon each other. That dynamic is strongest when each board member performs at his or her best. Developing a strong board begins with orienting and training each member of the team so that the whole team wins at its mission.
In July of 2016, thirteen of the top corporate CEO’s issued an open letter to the public entitled Commonsense Corporate Governance Principles. Despite the diversity of the group and varied opinions on specific principles of corporate governance, the group felt it was important to find some common ground at the highest level of corporate structure. Commonsense Corporate Governance Principles is intended to be a starting point for constructive dialogue within all levels of corporations to foster the economic growth among shareholders, employees, and the greater economy.
Board meetings can become pretty routine, but that does not mean that planning for them should be completely routine. Most meetings will tackle looming problems, identify future opportunities, and spark new ideas. While it’s important for a board meeting to have a solid structure, it should also have a little flexibility built into the agenda for tackling topics that are crucial or unanticipated. It’s easy to justify putting off doing a thorough preparation for a board meeting because of being too jam-packed with other tasks. It’s helpful for the board secretary to have a handy checklist for meeting preparation that is flexible enough to adjust for late additions and emergency matters. Here are some basic tasks to check off before your next board meeting:
When it comes to the culture of an organization, it’s hard to fool the public. A healthy public image is often a sign of good corporate governance. The aftermath of the bankruptcies of major entities such as Enron, WorldCom, and Tyco sent a fury through the financial industry. The shock of their demise sent plenty of financial advisors and consultants back to the board room to evaluate where it all went wrong. Congress moved swiftly to protect shareholders by requiring higher accountability of key board members by passing the Sarbanes-Oxley Act in 2002.
Your chief executive is leaving. No, not hypothetically. At some point, the CEO, executive director, or maybe even founder of your organization will move on to something new. In fact, according to BoardSource, 50% of nonprofit leaders expect to leave their positions within the next five years, yet only one-third of organizations have a succession plan. And even fewer have an executive director transition plan.