Nonprofit boards strive to improve the effectiveness of their boards. Often, they just don’t know how to go about it. Those who make decisions around the boardroom—and how they make those decisions—determines whether the organization ultimately achieves its goals and advances the mission.
Nonprofit boards need a well-rounded skill set in the boardroom, where board directors can confidently offer a variety of perspectives. Occasionally, boards need some new blood to recharge the board and open thinking up to new ideas. To this end, more and more boards are engaging in more structured processes for selecting board directors.
Conducting board self-assessments is a good first step toward composing a board with a well-rounded skill set. A skills assessment matrix expands upon the board self-evaluations so that nominating committees can develop better director recruiting, nominating and succession plans.
Forming a Vision of Effective Board Composition
The definition of board composition consists of the people who serve on a board and the mix of skills that those people have.
Such things as legal requirements, the organization’s charter, the nonprofit’s purpose, terms of office and director competencies are all things that influence the composition of the board.
Diversity is a hot topic for all types of boards. The main idea behind diversity is to be inclusive rather than to be exclusive. Diversity among board directors is vitally important because the general public expects that board members will be a true representation of the people they serve. While it’s important for nominating committees to consider disparities of gender and ethnicities among the board, it’s also important that recruitment efforts ensure that director candidates will be actively engaged and not just token members.
In addition to providing a broad representation of a community, a diverse board brings varying opinions and attitudes, along with varying approaches to strategies, problem-solving and solutions. An effective and well-composed board of directors is characterized by being open-minded, curious, accepting, responsive and collaborative.
Awareness of Board Candidates That May Present Challenges
Certain candidates for board directors will pose challenges for the board, so it’s important to consider the challenges and balance the risk with the benefits the candidate may provide.
For example, some boards allow minor children of a certain age to be on the board. Foster teens representing themselves or victims of drunk driving accidents offer an important perspective for boards that work with minors affected by those causes.
It may be tempting to ask donors who are well-known philanthropists to serve on the board. However, they may already be giving large sums to other organizations and may not offer as much in the way of donations as the board expects.
It’s also nice for nonprofit organizations to be able to connect their brand and their cause to a celebrity. This strategy sometimes works favorably. Other times, it fails miserably because celebrity board directors are willing to lend their names, but not their time, talent, money or connections, to the cause. This arrangement works best when the celebrity is willing to offer specific assistance, such as organizing a few lunches or dinners to which they invite their network of celebrities and wealthy friends, along with an ask for a hearty donation.
Certain other board members, such as customers, clients or family members of staff, may create a conflict of interest. Community business professionals may provide free services and guidance that would be an asset. Situations where there is a clear conflict of interest may prevent the full board from discussing or voting on certain items.
A thorough review of the board’s needs may indicate a need for a change in the board’s size—either larger or smaller.
Basic Things to Consider When Forming a Board’s Composition
Boards should consider some additional things when forming their board’s composition. It’s not enough to merely look at the board’s skills and abilities individually and collectively. Boards should view director candidates, considering not only their skills and abilities, but how those skills and abilities could potentially translate into positive actions for the organization.
The stage of development that the board is in also has a major bearing on the skills and experience that a board needs. Other factors for boards to consider are whether candidates have the right cultural fit, whether they’ll add value to the current composition, and whether they will be able to help align their skills with the strategic direction of the organization.
When considering each individual, boards should give a high priority to personal attributes such as honesty, integrity and ethics. Something else to consider related to professionals is whether they have the right experience within their field. For example, lawyers specialize in many different areas of the law.
Using a Skills Assessment Matrix to Find Gaps in Board Talent
Deloitte, a leading audit and consulting firm, recommends a four-step process for utilizing a skills assessment matrix.
- Develop a baseline. Conduct a self-assessment starting at where the board currently is. This step should reveal what the board does well and where they need improvement. It should also indicate which activities the board needs to adjust to accurately reflect the role and purpose of the nonprofit.
- Ensure shared direction and purpose. Agree on a governance vision that aligns with the nonprofit’s mission and that includes the mission and goal statements. Ensure that mandates for board and committee charters are clear and comprehensive.
- Get the culture right. Does the organization have a social conscience related to matters such as fair governance, responsible investing, wealth-sharing, and a balance between growth and social contribution. A sense of shared culture leads to increased involvement.
- Make it happen. Turn assessment results into a set of manageable action steps and set a timetable.
In keeping these four steps in mind, consider the skills the whole board needs. Next, the results of the board self-assessments of current directors will fill in some of the blanks of the board’s needs. At this point, it’s also important to factor in the character of the directors and their fit within the current board culture.
A template such as this one shows how to use cause and effect thinking to form a skills assessment matrix. There are also many other templates that boards can use to develop a customized skills assessment matrix.
The empty boxes will indicate the gaps and weaknesses in the current board’s composition and will aid the nominating committee in making wise decisions.