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Modern Governance Approach To Ensuring Board Effectiveness

Modern Governance Approach to Ensuring Board Effectiveness

Increased effectiveness among nonprofit boards is essential in today’s world. So essential, in fact, that there’s software designed to facilitate it as well as professionals trained to foster it and conferences produced to explore it. It’s no surprise that best practices emerge when 500 people convene around making nonprofit boards work better. The shift, however, is in the approach to board performance, which now begins not with a “how to” on enhancement, but rather an understanding of why board effectiveness matters.

At the first-ever Modern Governance Summit for BoardEffect users, hosted by Diligent Corporation in September, 2019, discussion focused not only on why effectiveness matters for nonprofit boards, but also on where governance – as a field — is headed, as critical context for exploring the utilization of board management software functions designed to enhance board performance.

“The user community has changed,” explains Mary Lou Leeder, Director of Customer Success at BoardEffect. “In only five years, the focus of training for platform administrators has evolved from features and functions to the impact of their role on board effectiveness and mission success.” The professionals supporting board operations serve as indispensable guides to good governance.

According to Felicia Fett, Board of Directors Liaison at the National Association of Secondary School Principals, “our role is to build better boards. And part of that, today, means getting board members to think about how the digital age is changing the way we approach governance. Technology opens up the opportunity to engage more — and differently — in the work we’re doing.”

With increased connectivity, visibility, and scrutiny, nonprofit boards are more accountable than ever for the success of their organizations. Board performance, in fact, is noted by Bridgespan as a critical ingredient in a nonprofit’s ability to achieve impact. With board effectiveness recognized among the organizational priorities that lead to mission achievement, it is important to consider indicators of high board performance in the changing nonprofit environment.

Based on outcomes of the Modern Governance Summit, the following practices are indicative of high board effectiveness:

1. Embrace technology.

A critical first step in building board effectiveness today, explains Felicia Fett, is helping boards overcome cyber anxiety. “Given risks from cyber attacks and phishing, plus demands for increased efficiency, security, and immediacy, boards must become more comfortable and curious about technology.” She explains the topic of IT is intimidating to some, so approaching the tenets of good governance from a digital perspective can be reassuring — and even enticing. BoardEffect, as a modern governance solution, has enabled her to manage — and fully leverage — the digital transformation of her board room.

2. Be intentional (about how the board works).

Research by Bridgespan shows a clear connection between board effectiveness and clarity about how the board does its work. They include factors such as the people involved, board culture, decision-making processes, and board structure. Similarly, various elements of effective board process were highlighted at the Modern Governance Summit:

  • Communication – While transparency is essential in good governance, it need not come at the expense of confidentiality. In light of increased concern about security, sharing critical information via email is unwise. But, as Mary Lou Leeder reminds us, gone are the days when classified information was distributed on paper at board meetings, then collected after the discussion. “Modern governance technology helps eliminate the element of surprise at board meetings by ensuring sufficient time for review of sensitive information, which enables the board to shift from a transactional orientation to a true governance focus.”
  • Efficiency – Today’s board members (and nonprofit executives) are busier than ever. Technology enables everyone to work both more and smarter, though the former can be detrimental without the latter. Effective boards design their meetings, committee and leadership structures, discussions, and tasks to enhance efficiency and avoid work that is redundant or misaligned with governance priorities.
  • Engagement – Ensuring the board includes the right people to do the right work (maintaining a strategic focus while also tending to fiduciary responsibilities) at the right time helps to foster engagement among board members. Effective boards understand their role, hold themselves accountable, and create cultures of continuous education to promote sharing learning among board members.

3. Recruit strategically.

Having the right people around the table is paramount in good governance. From every officer, committee chair, and board member to the chief executive and board liaison, strategic selection is essential. Board composition must reflect the organization’s diversity needs in terms of skill sets, perspective, experience, and demographics (including ethnicity, race, level of experience, gender, geography, and more). Board composition also should represent constituent voices and align with strategic goals, ensuring that board members bring the expertise and capacity to ensure the successful implementation of strategic plans developed to advance the mission.

Modern governance solutions also foster best practices in board succession planning. Selection of officers and committee chairs should be informed by stated criteria and aligned with strategic goals. At the same time, the succession planning process must be able to adapt to unexpected changes in board membership, organizational priorities, and external influences.

4. Practice governance.

While it might seem self-evident for boards to engage in governance, many board members get tempted by operational complexities into the weeds. Furthermore, the practice of governance involves more than meeting preparation and attendance, financial contributions, and oversight. Some key practices that lead to greater board effectiveness are:

  • Agendas – Framing board and committee meeting agendas for governance is an easy step toward building effectiveness. Modern governance solutions enable board leaders and chief executives to collaborate in the creation of agendas to ensure proper meeting content. Technology also allows board members to prepare for meetings in advance, freeing meeting time for discussion of strategic governance topics.
  • Expectations – The board must clarity expectations, not only for the organization and its chief executive, but also for itself – as a whole, as officers, as individual board members. Creating and maintaining current job descriptions for these unpaid but very real jobs is essential best practice. They should be used to inform expectations through recruiting, orientation, succession, and assessment processes.
  • Assessment – Board and board member self-assessments are invaluable tools in promoting good governance. On an annual basis, the board should evaluate its performance in light of strategic goals to ensure it is serving the organization effectively and to identify opportunities for improvement. Similarly, board members should be asked to compare their actual performance to stated expectations. Modern governance solutions make keeping track of progress over time easier than ever.

Building board effectiveness is an ongoing process enhanced by today’s modern governance solutions. The right talent and tools make it easier for today’s busy, inquisitive, and appropriately demanding board members to engage effectively in good governance and mission achievement.

Sonia J. Stamm

Sonia J. Stamm is Founder and Principal of Stamm Consultancy Inc., a boutique consulting firm established in 2008 to guide nonprofits through critical junctures in their development. With over 25 years of experience in organizational development, Sonia partners with nonprofit boards and executive leadership to facilitate best practices in board development and governance, strategic planning, leadership transition and succession, and organizational effectiveness. Since almost its inception, she has been affiliated with BoardEffect to share perspective on how boards can best implement board management software in the effort to advance their organizations’ mission.

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