A strong board of directors can make or break an organization. One of my pro bono activities is helping nonprofits develop high-caliber, high-value boards. Sometimes, a board needs to be refreshed or changed to reflect changing needs.
Too often, however, boards underperform for many reasons. One could be that members are not recruited strategically. The true purpose of the board and member roles and expectations may not be well defined, or directors are selected based on relationships instead of needs and value.
Execution can be weakened either through poor meeting preparation or facilitation. Some CEOs may not want a strong board to challenge their independence or question their judgment.
Whatever the reason, an organization must step up and make changes.
In brief, there are six steps to build a board:
1. Determine the board's charter.
2. Define and prioritize qualities and skills needed to support the charter.
3. Define the board structure and governance.
4. Develop director position descriptions and metrics.
5. Recruit continually.
6. Provide comprehensive orientation and ongoing assessment.
A nonprofit governance example is The Nature Conservancy. An excellent private sector charter and corporate governance guidelines example with additional detail is Monsanto.
Next, the qualities and skills to support the charter should be defined and prioritized. Common needs include expertise in finance, operations, technology, strategic planning, fundraising, law, partnerships, and marketing.
Include soft qualities like strategic thinking, sound judgment, the ability to evaluate people, curiosity, communications, and commitment.
According to management guru Peter Drucker, author of Management: Tasks, Responsibilities, Practices
, "Board members should have proven their ability as senior executives—whether in business, in government service, or in other institutions. They should also have time for the job."
A director position description should include:
- Company overview
- Qualifications required
- Performance metrics
- Board information
Educating new directors thoughtfully and thoroughly sets the tone for their engagement and success. Provide a comprehensive welcome that ensures they know the industry, trends, people, and issues. Onboarding materials should be professional quality and include:
- Board charter
- Board of directors and key staff list
- Organizational information: mission, vision, values, history, and timeline
- Legal information: by-laws, board policies, and term limits
- Board responsibilities and structure
- Board officer job description and responsibilities
- Standards of practice: confidentiality, conflict of interest, and ethics
- Current, approved budget and financial statement
- Audit summary
- Annual report
- Strategic plan
Keep in mind that members must align with and add value to the organization's mission. Look for people who will raise the caliber of the entire board. Be clear about their role, time commitment, and expectations, and regularly assess their performance. Onboard them professionally to ensure they ramp up and contribute quickly.
High caliber talent strategically selected and productively engaged will improve the decision-making of the CEO and the success of the organization. It takes work to make a board work, but it is worth it.
This article was originally published on LinkedIn.
Marian Cook is currently a solutions principal for Slalom Consulting, as well as the head facilitator for MIT's blockchain certification course and a strategic advisor to the Chicago Blockchain Center. Immediately prior, she was the chief strategy officer for Innovation and Technology for the State of Illinois, having moved from the private sector to public service in 2015.
She started as a systems engineer with IBM, re-engineering processes, implementing systems, and creating business and technology strategies. Moving to international consulting firms, she worked globally, developing business growth and turnaround strategies, as well as the client side as the head of IT for a top healthcare organization.
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