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Assessing Board Performance: Best Practices For Nonprofits

Assessing Board Performance: Best Practices for Nonprofits

Behind every great nonprofit is a hardworking board. While board members may put many hours of time and effort into their board duties, it’s fair to ask whether they’re getting results that fulfill their mission.

Nonprofit boards can only discover the true indicator of board performance by doing an annual board assessment that incorporates best practices for board assessments into the process. In assessing a nonprofit board’s performance, a thorough evaluation includes an assessment of individual performances and an assessment of the board as a whole.

In the business of nonprofit management, it’s easy for boards to make excuses for not doing an annual board self-evaluation. Among the reasons that boards fail to evaluate themselves are not knowing how to do them or not having the time to do them. If board directors with previous board experience haven’t done self-evaluations previously, they may not be motivated to do them on the next board. They may have served on nonprofit boards that had different expectations for themselves. Some experienced board members may also have served on boards that didn’t necessarily focus on good governance.

The National Council of Nonprofits says that more nonprofits would benefit from a self-assessment process every year. The best way to do that is to have a plan for an annual self-assessment and follow through with it.

Getting Started with a Board Assessment

Every board has to begin the process of doing board assessments somewhere. It’s true that getting into the practice of doing board assessments is more difficult if it hasn’t been a long-standing protocol, but it’s not impossible.

To begin with, boards that are committed to doing a board assessment need to take the first step of having a general discussion about the role of the board. Taking this step will ensure that the entire board is on the same page and that they share the same expectations. To prevent the issue from continually being overlooked, place the issue of a board discussion about board self-evaluation on your agenda.

A couple of the primary questions that boards need to be discussing at the time of board self-evaluations and all year long are:

  1. Why does the nonprofit exist?
  2. How can the board advance the organization’s mission?

In addition to these questions, best practices for nonprofit board assessments recommend that board directors should reflect on their individual roles as board directors.

Be aware that it may take time to get full buy-in from the entire board for conducting board self-evaluations. Some board members may not fully understand the importance of board self-evaluations as it pertains to good governance practices. Other board members may needlessly feel threatened by the process.

Ultimately, it’s vital for nonprofit boards to assess whether the expectations they have for themselves match their performance and whether they’re meeting the needs of the organization.

Board Self-Assessments Ensure Strong Board Leadership

Communities depend on nonprofit organizations to provide them with services that they can’t get from the government and they can’t get on their own. That’s an important reason for nonprofit boards to ensure that they’re following good governance principles and fully committing to their role as board members.

Nonprofit organizations are legally required to state the purpose of their existence on the IRS Form 990. The government mandates that nonprofit boards are effectively working toward the purpose that they stated on their founding documents. Without doing annual board self-assessments, nonprofit boards run the risk of straying too far away from its original mission and intent.

Beyond ensuring that your nonprofit is providing its intended service, following best practices for assessing board performance helps the board to identify issues that need clarification.

For nonprofit organizations, the future is just as important as the present. To ensure that a nonprofit organization continues to have strong leadership in the coming years, board recruitment has to be a continual activity. Assessing board performance annually should include an assessment of the current board’s skills so the board can determine if any of the current board members have the right skills to consider asking them to commit to a consecutive term. In light of board recruitment, nonprofit boards should always be forward-thinking and consider the needs of the nonprofit’s leadership over the next 3-5 years.

What Are the Best Practices for Assessing Board Performance?

While large numbers of nonprofit boards fail to annually assess their boards, there’s no shortage of nonprofit boards that make it an annual practice. These nonprofits set the standards for best practices for assessing board performance. If board assessments are new for your organization, it makes sense to spend the time to look at other nonprofits that have been doing self-assessments over the long-term. There is much to learn from seasoned nonprofit organizations about templates for surveys, leading the assessment process, and what issues to evaluate.

In general, best practices for assessing board performance require doing it annually, planning ahead for it, and establishing a process for it.

Once the board has had the initial conversation about what their purpose and expectations for assessing board performance, they need to establish a process for it. The answers to the following questions will give you a good place to start:

  • What tools will you use? Surveys, online questionnaires, template from another nonprofit, board portal,
  • Who will lead the board assessment? The board chair, independent facilitator, a committee?
  • Will the assessment tools be anonymous, or will the board be transparent about the answers?
  • What areas will the board evaluate?
  • Will you evaluate individuals, the entire board, or both?

While newer board members may not have enough experience to contribute greatly to their answers for a board assessment, nevertheless, it’s important not to make exceptions for including them.

Best practices for assessing board performance include using the results to aid in strategic planning. This is an important point that shouldn’t be overlooked.

Overall, boards should enter into the process of board assessment with a narrow focus on the nonprofit’s purpose.

Assessing Board Performance: What Specific Areas Should Nonprofit Boards Include?

There are no hard and fast rules about the specific areas that nonprofit boards should assess. Essentially, any areas the board deems appropriate are acceptable for a board assessment. Here’s a good list to get you started:

  • Board roles and responsibilities
  • Recruiting, orienting, training, and equipping board members
  • Board committees
  • Board meetings
  • Board policies
  • Oversight of legal matters
  • Strategic planning
  • Board’s oversight of personnel management
  • Board’s oversight of financial matters
  • Board oversight of fundraising activities
  • Board participation and morale
  • Forward-thinking and future-oriented

An annual board self-assessment exercise provides many benefits for nonprofit boards. It may help the board prevent problems that could lead to liability issues for the board and for themselves. The results of your annual assessment will also highlight some topics for future board discussion and consideration.

If time is truly an issue, nonprofit boards may opt to conduct individual board member assessments one year and alternate with full board assessments the following year. The process of doing board assessments will become easier and less time-consuming each time. The most important thing is just to commit to doing them and follow through.

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