BoardEffect’s Year-End Review and 4 Hot Topics for 2023
2022 has been a tumultuous year again. Organizations have been tested in many ways. The pandemic ended, or did it? People changed jobs at an unprecedented rate. The economy became less predictable. Information security was challenged. And the speed of all of these changes has only accelerated. Many of these issues ended up on boards’ agendas throughout the year, and will continue to do so in 2023.
5 Top Topics in 2022
- Financial Instability: There was a lot of change this year with the labor market, funding sources, inflation, recession fears, partnerships and teams being asked to do more with the same or fewer resources. Continued uncertainty about the financial side of the house is affecting decision-making that will reach into the future.
- Board Diversity: The public has become more aware of the importance of their institutions to reflect the community they serve. Every board defines diversity differently – for some it’s professional background, for others it’s whether the board member is a consumer of service, and for still others it’s about where they are from and what community they represent. Additionally, boards need more diverse skill sets represented, so that they can have robust discussions on all topics that come up.
- Community Engagement: Even as the pandemic brought new forms of isolation, organizations and their boards have been focused on engaging with their communities in meaningful ways. Board members have supported this trend and often attend community events. Many boards are bringing in diverse members of the community on the board and on advisory groups as a way to formalize these new connections.
- Data Security: It seems that daily we have read about data security breaches large and small in 2022. While the board does not have to be security experts themselves (although it doesn’t hurt), they do need to understand the organization’s vulnerabilities and be able to discuss trends, and be willing to reexamine even the way the board itself handles data. Every data breech, whether nefarious or accidental, is costly and disruptive to the staff and the board – and in some cases ruinous. This is the time for an ounce of prevention.
- Board Education and Engagement: This is key to having an effective board, but with so many pressing issues it can be hard to find the meeting time for education and engagement. It’s not only important for longstanding and new board members to review existing policies, but also to take time for focused discussions on key issue and policies so the board it prepared for when things get complicated. The most effective boards find time and energy for ongoing board member education so the board can make good decisions and be good representatives of the institution in the community.
Looking Ahead to 2023: 4 Hot Topics
- ESG: Environment, social and governance (ESG) has been an important trend in the news for corporate boards and the same concept is spreading to nonprofits. It has sparked interest in what an organization does and how it does it. What’s the impact on the environment? On the community? On the makeup of the board itself? Constituents are demanding to know more because they care about long-term sustainability. They will continue to put pressure on nonprofit boards to reflect the population they serve.
- Board Engagement: Greater demands on board members for active engagement on key issues during and between meetings will continue to grow. Best practices for the board will be even more important as the complexity of issues the board faces remain ever-present and ever more complex. When important issues come up between board meetings, how does a board respond? Boards will need the appropriate tools to be able to address these needs when they arise, even when not sitting in a board meeting.
- Security, Security, Security: We all know how important information security is for every group in an organization, including the board – maybe most importantly for the board. It’s critical that data be secure, available and handled according to strict confidentiality and privacy principles at all times. Board members need access to the information needed to make good decisions, and they need the confidence to know that it’s safe.
- Strategic Planning: With so many changes in the environment – financial, regulatory, community, remote work, ESG, technology – strategic planning is needed to bring all the factors together to focus on the future. The board must focus on the viability of the organization for the long term and consider transitions and how they will affect mission. Even if a board has a recent strategic plan, a refresh is important to align the board and staff about key issues and how to manage them.
Through all the challenges and changes, one constant for nonprofit boards is the mission. Board members serve because they care deeply about the mission and that unites a board, leadership and staff to the community they serve.