Building an effective board of directors is a critical part of governance that has a profound impact on the organization. To have board effectiveness, a nonprofit’s purpose, process, structure, and people must all be in alignment. Yet how can you be sure your board works effectively? Use our checklist of 15 essentials to guide your nonprofit board effectiveness.
Board effectiveness is a worthy goal, however, the board may lack a clear understanding of what true board effectiveness looks like or how to measure it.
The following topics will clarify what board effectiveness means and open up a new dialogue for your next board meeting:
- What is board effectiveness?
- 5 pillars of an effective board
- Board effectiveness checklist
- How to measure board effectiveness
- Barriers to board effectiveness
What Is Board Effectiveness?
While it’s important to recruit and develop a well-qualified nonprofit board, board effectiveness is just as much about board dynamics and working as a team as the expertise and experience individual members bring to a board.
Nonprofits need skilled, experienced board members to fulfill the mission and ensure strong leadership, yet the boardroom isn’t always a calm place. Active boards deal with regular challenges and the occasional urgent matter. Tensions can surface when strong personalities clash in the boardroom. Board effectiveness reflects how well boards handle tension and conflict and how they work together to accomplish a nonprofit’s goals.
Deloitte sums up the importance of board effectiveness in The Effective Not-for-Profit Board: A Value Driving Force by saying, “The role of NPOs and the demand for the services they provide continues to grow. While they face many challenges to achieving their mission and meeting their stakeholder’s expectations, NPOs with a robust system of governance and a strong, effective board of directors have a greater likelihood of success than a poorly governed organization.”
A board effectiveness evaluation is something your board should address annually, and board management systems such as BoardEffect come with built-in survey tools and templates that makes the process easy and convenient.
5 Pillars of an Effective Board
The right board members and the right structure along with a firm commitment to good governance is a good start to board effectiveness. To take things a step further, boards can look to the following 5 pillars of effective board governance to evaluate themselves individually and collectively in various areas of nonprofit leadership.
- Board Mission and Purpose
- Board Membership
- Board Governance
- Board Efficiency
- Evaluating and Measuring Progress
Board Effectiveness Checklist
The technology, processes, and skills that today’s nonprofit board members need are evolving as quickly as the external landscape.
Organizations must be all at once informed, more secure, more collaborative, and more purpose driven.
To fully meet changes and modern governance standards, board members must have a grasp of all the workflows, insights, policies, stakeholders, and moving parts that make up the nonprofit organization and its activities. Without it, leaders may fail to make the right decisions at critical times and can expose their organizations to extremely costly governance deficits and operational risks.
Board effectiveness reflects the board’s ability to deliver on its mission and achieve its goals.
These are the 15 essential elements that offer board effectiveness guidance, and we organized them under the pillars that support them.
Board Mission and Purpose
1. Mission and Purpose
Does the board have clarity on its mission and purpose?
2. Goal Setting
Are you setting timely goals? Is there a clear understanding of what the organization and board want to achieve and a clear direction of how they want to get there and by when?
How are the expectations for attendance, culture, and boundaries being set?
4. Board Relationships
What actions are you taking to encourage collaboration and trust across your board and management team? How are you fostering transparency?
5. Board Composition
Do you have the right mix of board members with the right skill sets? Do you need to develop board member skills or fill gaps?
6. Clear Roles and Responsibilities
Do you have well-defined roles and charters for committees outlining responsibilities?
7. Board Member Onboarding
How are you making the necessary documents available to bring new board members on board, and get them up and running quickly?
8. Board Development and Training
How are you ensuring all board members have the necessary information and resources to be able to carry out their fiduciary duties? Do you have a board development plan in place?
9. Board Governance Systems
Are you using modern governance board software? Does it support real-time online agenda management? Does it come with top-of-the-line security that meets security standards for boards?
10. Board Structure and Processes
Is your governance structure streamlined so that you have the right board structure and processes to be effective?
11. Supporting the Board
Do you have the necessary staff, structures, and systems in place to support your board for meetings, logistics, and communications? Can trustees easily access information, give feedback, and ask any questions?
12. Meeting Optimization
Do your agendas allow time for strategic discussion? Are you properly allocating time for the most important issues and subjects?
13. Accessing the right data
Are you using a board portal that can deliver the right data to help aid decision-making?
Evaluating and Measuring Progress
14. Objective board self-evaluations.
Are you carrying out annual self-assessments to identify strengths and weaknesses among the board?
How are you measuring your effectiveness? Are you using KPIs to help identify your progress towards your goals?
How Do You Measure Board Effectiveness?
Annual board self-evaluations are necessary to measure the board’s performance and help reassure the stakeholders that the board is diligent in its responsibilities. A board survey tool makes easy work of a board effectiveness review, and a board self-evaluation is well worth your board’s time to ensure board effectiveness.
- Review the past years’ agendas and evaluate if your board spent the bulk of its time planning and strategizing. (Tip – A consent agenda is a good tool to help with time allocation.)
- Review your board orientation process and create one if you don’t have it.
- Assess the quality and quantity of board training and development sessions and whether board members are taking advantage of educational opportunities.
- Evaluate how securely your board communicates and collaborates. (Tip – BoardEffect has state-of-the-art security built directly into the platform.)
- Evaluate board engagement including board attendance, committee participation, board meeting preparation, and participation in discussion.
- Assess whether the frequency of meetings should be increased or decreased.
A board self-evaluation will certainly reveal much about your board’s effectiveness, and you can take things a step further by considering the obstacles to board effectiveness.
Barriers to Board Effectiveness
Boards should know what not to do, as well as knowing what they should be doing. When one or more of the following barriers to effectiveness are present in a board, it inhibits productivity and board effectiveness:
- Staying too small
- Micromanaging minor issues
- Ignoring an ineffective nominating committee
- Hanging on to unproductive board members
- Permitting weak or ineffective committees
- Developing unproductive orientations for new members
- Failing to rotate and cross-train board members
- Failing to have a strong strategic plan
Every board member is responsible for improving leadership to enable the board to lead the organization to success. Every member must assess if the board has the necessary diversity to represent its organization, clients and network.
Nonprofit boards also have the responsibility of making sure every board member is meeting the board’s expectations. Recruitment, member orientation, and board development should be seen as vital and ongoing activities.
The Combined Elements Improve Board Effectiveness
Are you interested in working on how to improve the effectiveness of your board of directors? The process is less complicated when you break down the categories into the five pillars discussed here.
Also, our board effectiveness checklist of the 15 essential elements for nonprofit board effectiveness will further assist your board in identifying areas for improvement.
We’re passionate about the work of boards, which drives how we develop the BoardEffect solution. Boards operate in a series of overlapping cycles: a regularly scheduled meeting cycle, an annual operating cycle, and the cycle of longer-term board development and engagement. BoardEffect’s solution supports a modern approach to governance, powering boards’ interdependent responsibilities across these ongoing cycles.