E-governance Supports the Ten Basic Responsibilities of Nonprofit Boards
Attachments:
Ten Core Areas of Board Responsibility:
"Ten Basic Responsibilities of Nonprofit Boards," Second Edition, Richard T. Ingram © 2009, BoardSource® |
Ever since BoardSource® first published the Governance Series almost 20 years ago, nonprofit organizations have turned to these handbooks for practical guidance on integrating best practices into their boardrooms. The first book in the series – arguably the most popular – provides a list of the ten primary areas of the board’s responsibility, from determining the mission of the organization, to overseeing the work of the chief executive, to ensuring the organization’s health and viability.
While little about the list of responsibilities has changed in the past two decades, the tools available to help board members play their roles have greatly increased. With the advent of e-governance, board members now have access to powerful web-based software designed specifically to enhance governance. “Board portals” – the most comprehensive type of e-governance solution – offer board members a secure space where they can conduct their work. Using the “Ten Responsibilities” as a guide, this BoardEffect Brief provides examples of the ways e-governance can support the board’s primary functions.
Determining Mission & Purposes
Helping to set an organization’s mission and ensure it stays on course is one of the most important roles for a board of directors. Yet, as anyone who has ever worked in a group to craft a new mission statement knows, the process can be time-consuming. Often the conversation around the board table can veer away from the important task of identifying the organization’s core values and purpose, to “wordsmithing” the mission statement itself.
Board portals offer a path out of this trap by providing tools that enhance productivity. For example, rather than devoting meeting time to engaging in “group writing” the mission statement, the board can use the meeting to discuss the values that should inform the mission statement, then work out specific phrasing after the meeting in the board portal’s online Discussion Forum. Board members can spend time between meetings to collaborate on the mission statement by posting their thoughts and responses to others’ thoughts online whenever it’s most convenient. As an added advantage, crafting the mission statement in a discussion forum allows individual board members to explore their own personal connection to the mission and help refine the statement in a way that resonates with their individual and shared values. At the next meeting, the mission statement can be voted on, or sent back to the portal for further discussion. The “discussion threads” can also be archived in the board portal for future reference – for example, to bring newly elected members up-to-speed on the process that produced the final mission statement.
Selecting, Supporting, and Evaluating the Chief Executive
In nonprofit organizations, only one staff position reports directly to the board of directors – the Chief Executive. Yet, handling this one employee position can be the most demanding responsibility the board has. To be effective, the board has to set a clear job description for the Chief Executive, search for and hire the right candidate, and set measurable goals. The board also needs a transparent way to evaluate the Chief Executive’s performance – a task made nearly impossible by relying solely on one source. The board must have a way to collect, organize, and analyze independent data on performance benchmarks to be able to make an objective assessment.
E-governance can play an important role in helping the board manage and support its one employee, beginning with organizing the search and hiring processes. Information on candidates, summaries of interviews, reviews by interviewers, and details of potential offers can be shared, discussed, and edited in the board portal. Once a candidate has been hired, the information needed for annual performance reviews can be collected and analyzed in the portal, as previously stated. Committee and board discussions on compensation levels, peer reviews, and other sensitive issues can remain private within the portal, shared only by the appropriate people.
The Chief Executive can also access the portal to connect with board members for support, get regular updates on the board’s work, and both receive and provide feedback on performance issues. In addition, the Chief Executive and board members have access to important information at the same time, promoting accountability and transparency in leadership. E-governance positions the organization well for leadership succession planning, and/or for handling an unexpected departure of the Chief Executive. Both staff and board can have peace of mind that vital information will be accessible to those who need it when they need it.
Ensuring Effective Planning, and Monitoring/Strengthening Programs
Far too often, strategic planning is not “strategic” at all. For many organizations, the process takes several months, and once the final plan has been written, it languishes on a shelf rather than informs the day-to-day operations of the organization. The best strategic plans are those that form the basis and structure of future board meeting agendas, committee reports, task lists, and sets of benchmarks to be met by programs, finances, and other areas.
Board portals make implementing strategic plans more manageable. For example, the data needed to inform the strategic planning retreat can be collected and organized in the portal easily. Once the retreat is over, strategic initiatives and goals can be turned into sections of Board Meeting Books to help organize future meeting agendas around the strategic plan. Committees can organize their work around specific strategic priorities through the use of “Task Lists,” budgets, and committee report templates in the portal. Program performance indicators identified in the strategic plan can be presented in “dashboards” and posted in a shared Resource Library, with regular updates provided by program staff to keep the board informed. The result is an actively implemented strategic plan with accountability for individual board members, committees, and for the board as a whole.
Ensuring Adequate Financial Resources and Providing Oversight
The financial health of the organization is typically the board of directors’ primary concern. Yet, accessing timely financial data is often a challenge. Many board members see updates on revenue and expenditures only minutes before a board meeting (or a few minutes into a meeting), and then spend a great deal of meeting time simply getting their questions answered about the financial statements.
E-governance can streamline the board’s ability to access and review timely financial data. Whether members are accessing a snapshot view of fundraising campaigns in a “Development Dashboard,” or downloading month-end financial statements the moment the ink has dried, the board portal can provide board members with sufficient time to review financial information well in advance of meetings and stay current on the latest financial trends.
Board portals also can ease the work of the Audit Committee, and potentially save the organization money on the annual audit. A separate space can be carved out for the documents required by auditors well in advance of the annual audit. Policies on Conflict of Interest, Whistleblower Protection, Document Retention and Destruction, Compensation of Chief Executive, and other data required for the new Form 990 can be conveniently organized in one place for the auditors to access online. Providing the information in this organized, easy-to-access fashion can help save the amount of time auditors spend preparing the Form 990, possibly lowering the fees they charge.
Building a Competent Board
Regardless of how the board members are elected or appointed, their level of competence will have a great impact on the organization’s ability to succeed. Providing access to best practice resources, as well as tools for reinforcing those best practices is critical to establishing a high-performing board. From providing the Governance Committee space to focus on board development, to identifying and recruiting talented board members, to offering high-quality templates and knowledge resources for board documents and processes – e-governance offers a variety of tools to help the board grow wisely.
In the board portal, Governance Committee members can collect and organize information for board elections, prepare board self-assessment surveys and tasks, organize board training sessions, and discuss opportunities to increase board engagement. The online Board Directory can help the Committee assess the board’s current strengths – in terms of the number and location of members, committee assignments, and areas of expertise. Resumes of potential board candidates can be shared and discussed online, with a final slate of nominees reviewed and “voted on” by board members using an Online Poll.
In addition, high-quality and custom templates for documents such as the Board Policy Manual, individual policy documents, and Meeting Books can be loaded into the portal to make it easier for the board to promote best practices. Links to helpful websites, articles, bibliographies, and other knowledge resources can be quickly distributed to all board members in order to help them with their individual and collective development. As new members join the board, the online resource becomes a powerful tool to assist with orientation – offering a simple way to provide the most current information that new members can review online at their leisure.
Ensuring Legal and Ethical Integrity, and Enhancing the Organization’s Public Standing
E-governance was born in the wake of the Sarbanes-Oxley legislation when boards of directors suddenly found themselves in dire need of more timely access to accurate information. But beyond fulfilling that urgent need, e-governance is helping to create a new culture of transparency and accountability within boards and their organizations. When information is created and shared by the full board, there is the opportunity for a paradigm shift – from a tradition where important information is disseminated to the board just before board meetings, to one where the board is actively engaged on a regular basis in governance work.
While it would not be accurate to say that board portals “track” every action a board member takes, it is true that the activity levels found in board portals provide concrete evidence of the board’s level of engagement. Through indicators such as: active online Discussion Forums, updates to the Board Policy Manual, current meeting materials ready for download, a Resource Library brimming with helpful documents, a calendar listing a slate of upcoming meetings, a board demonstrates the active and transparent ownership of its governance role. Similarly, unethical and illegal actions become much more difficult for any one member or group to carry out when information is shared regularly among all board members.
Using a board portal to manage board work can also serve as a smart public relations strategy. What stakeholders wouldn’t be happy to hear that the organization they support has adopted e-governance as a way to ensure best practices? If requested, boards can even provide “guest access” to the portal to tangibly demonstrate the kind of work taking place there, reassuring regulators and the public alike of their integrity and ethical practices.
Dottie Schindlinger is Vice President of E-governance for BoardEffect, Inc., the leading e-governance solution for nonprofit boards of directors. Learn more at www.boardeffect.com.