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5 tips for an effective not-for-profit board

Board of directorsSurvey says, gaps in not-for-profit board performance fundamentally impact the success of the organization. Problems range from lack of true engagement by board members to their failure to fulfill important fiduciary duties. Do these sound familiar?  Don’t worry. We are here to help you resolve these issues and set your board up to be as efficient as ever.

To avoid these shortcomings, consider the following best practices:

  • Set clear expectations up front. Do your incoming board members have a thorough understanding of what is expected of them? And do they understand what meeting those expectations will involve? Have they met key players and learned about relevant policies and procedures? We recommend developing a comprehensive onboarding process that clearly defines board responsibilities, including the details they need to know to hit the ground running.
  • Mandate committee participation. Committees are where the work is done, so it is a good idea to get all members involved at this level. Let them indicate their preferences based on their interests and experience to optimize engagement and effectiveness.
  • Select a chair capable of setting the tone and holding members accountable for meeting expectations. Dealing with volunteer board members who are often also top donors is a delicate balance. Many may have strong qualifications and will be donating significant time and resources. But remember, the chair role requires strong people management skills and a deep business acumen to provide leadership for the organization. The chair will need to maintain strong, productive relationships with management and fellow board members while being able to deliver tough messages and motivate others to bring their best to the organization.
  • Commit to having board members with diverse backgrounds and experiences. We recommend identifying key skills to pursue when recruiting board members (e.g., legal, financial, human resources, marketing, fundraising and community connections) to ensure all needs are covered. Beyond skill diversity, different backgrounds and experiences will bring wider-ranging perspectives to the table and set the stage for greater success.
  • Set term limits. Having new faces and fresh perspectives are key to your board’s success. New members help shake things up. Still want to keep former board members engaged? It is a bonus if you can tap into their vast knowledge and let’s face it, their financial contributions. Why not form a legacy committee that provides special recognition to past board members while maintaining their ties to the organization?
  • There’s a lot to consider—and a lot is at stake. How do you choose which of the above best practices to focus on? First ask yourself whether you are getting the best use of your board members. If the answer is “no,” then consider where things went wrong to determine your next step. Here are some examples of “what went wrong” scenarios and potential solutions:

    • The board isn’t as effective as it could be. Take a look at your onboarding process. Were clear expectations set from the start? If not, focus on developing a comprehensive onboarding process that clearly establishes expectations for board members, including preparation for meetings, active participation in decision-making, and any fundraising goals. Consider providing new board-member training that includes an organizational overview, board responsibilities and structure, and information on how the board and committee meetings work.
    • Members start off strong but then lose interest or focus. Consider whether the chair is setting the right tone, implement annual board performance reviews, and solicit input from board members on whether they are getting the information and support they need to stay engaged. It might also be time to conduct interviews with members to review the expectations set in the onboarding process.

    In the end, board members are volunteering their time and want to make a positive impact on the organizations they serve. You want to make sure they have the tools and training they need to put their best efforts forward.

    If you’d like to learn more about how to improve your board orientation process, you may be interested in the November 8th webcast hosted by the AICPA’s Not-for-Profit Section. The Section provides tools and resources covering not-for-profit board structure, responsibilities, orientation, and more.

    Katie Thornton, CPA, Technical Resource Leader for Higher Education, Plante Moran.

    Katie has over 16 years of experience serving not-for-profit and higher education clients. Currently, Katie is working with other technical leaders to prepare a comment letter to FASB related to the draft standard on contributions, which will impact government grants as well as developing tools for implementation of new standards. Katie currently serves several large private foundations, public universities and related foundations.

    Kris Ray, CPA, Technical Resource Leader for Not-for-Profit, Plante Moran.

    Kris has 15 years of experience in audit and consulting projects with not-for-profit organizations. Kris is the industry technical leader for Plante Moran’s not-for-profit consulting and auditing group. In this role, Kris has responsibility for quality control and implementation of new standards, leads the firm’s not-for-profit professional standards team, and performs engagement quality reviews of financial statements and consulting reports for compliance with professional standards.

    Board of directors courtesy of Shutterstock.

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