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Eight Signs Your Board Might Be Dysfunctional

Date: April 5, 2023

Phil Buchanan

President, CEP

Kevin Bolduc

Vice President, Assessment and Advisory Services, CEP

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This post originally appeared on the blog in February 2022. 

We’ve spent a ton of time in foundation board rooms, for better and for worse. We’ve also been board members and guest speakers at operating nonprofits and one of us staffed two college boards decades ago. Many of those experiences have been engaging and positive. When boards work well, they help organizations focus, strengthen their work, reinforce values of equity, and provide advice, energy, resources, and inspiration.

When boards don’t work well, however, they can kill momentum toward important social progress. We’ve seen too many that are disinterested or dysfunctional, creating distorted power dynamics, wasting precious resources, and landing on approaches that do not fully reflect the needs and solutions that communities see for themselves.

That experience has led us to believe there are at least eight warning signs that a board, whether of an operating nonprofit or a foundation, is off track.

1. There are more frequent discussions of competitors and costs than of collaborators.

Too many foundation and operating nonprofit boards don’t do what BoardSource CEO Anne Wallestad rightly argues is their core responsibility: putting purpose first. Instead, they operate as if it’s their organizations that matter most. That manifests in conversations rooted in a competitive, zero-sum context — looking at other organizations with similar missions as rivals rather than collaborators. For foundations, this can manifest itself in a singular focus on asset size or administrative cost ratios rather than an impact-oriented conversation about how goals are best achieved collectively.

Boards should recognize that it’s only by working within a cooperative ecosystem, over time, that crucial goals can be achieved. Even at moments when things seem zero-sum, they usually aren’t. Organizations that can make a collective case for important shared goals can expand the pie of funding, instead of fighting to protect a smaller one. Changing those conversations about competition to be about shared purpose can increase your chances of making real progress.

2. The board lacks racial diversity and is populated mostly or entirely by people without knowledge of philanthropy, nonprofits, or the work of the organization.

To stay grounded in purpose, it’s imperative that boards are populated by members that reflect diversity of identity and of experience in communities and issues that the organization seeks to address. Too often boards are comprised largely of members who don’t understand the needs of the people their organizations serve or don’t appreciate the uniquely challenging nature of nonprofit work. For boards to thoughtfully set strategy, assess performance, or choose a CEO, they need to understand the complexities of nonprofit efforts — and they need people with real experience with the issues being addressed.

This is partly about racial diversity, which too often is sorely lacking, but it’s also about personal and professional experience. And it can’t be tokenistic: CEP research suggests that people of color only start to rate their opportunity to influence discussions in the boardroom in the same way as white board members when they number more than one or two in a larger group. Boards should be collecting demographic and experiential information about their members and discussing what it tells them.

3. The board is two-tiered.

Diversity is meaningless if boards don’t create opportunities for everyone to have influence on the most important decisions. But too often, whether because family members retain implied — or actual — veto power at a family foundation, or because an executive committee makes all the important decisions at an operating nonprofit, inequality prevails and good governance is undermined. We’ve seen boards in which a single individual (often a donor) has the only opinion that matters or boards where crucial decisions, about questions of goals, strategy, or CEO performance, are made by a subset of members, rendering the other ones feeling powerless and, often, tokenized.

If it feels unwieldy to involve the entire board in crucial decisions, then that’s a sign your board is too big or doesn’t have the structures it needs to engage in meaningful conversation. Don’t create a two-tiered board. Instead, consider simply making the board smaller or creating new approaches that allow a full board to have honest conversation on key questions of a board’s core roles of oversight, strategy, and resourcing.

4. Authority for decisions is unclear or unspoken.

When it’s unclear who gets to make a decision — or, worse, whether a decision even needs to be made — conversation can meander or become needlessly contentious. We at CEP had a board member who asked us to create a “board authority matrix” that lays out who is responsible for which decisions. Initially, we dragged our feet because it felt overly bureaucratic — like a solution in search of a problem. But it turns out it’s been incredibly useful to have, in one place, a clear guide of who decides what for all the major kinds of decisions we face.

Ironically, everyone knowing that something isn’t a board decision, but is actually the purview of the CEO, or a specific committee, can help frame discussion so that staff and board both are more able to provide the right kind of guidance and perspectives. This ultimately leads to better agenda setting, as well as more trust and mutual understanding between CEO and board.

5. There is more time spent by the board listening to CEO or staff presentations than actually discussing topics.

This is all too common — and can even be a tactic used by some CEOs to keep the board from “disrupting” the work of the staff. On effective boards, CEOs and their leadership teams recognize that their boards bring value and trust them by making space for them to engage each other and staff. When that doesn’t happen, it’s obvious even to an outsider. As one of us noted in a blog post a decade ago, too often boards and staff “over-manage and over-script meetings such that the most spontaneous thing to happen is someone standing up to get a refill of coffee. Collegiality gets valued over debate — indeed, the Chair and CEO often try to pre-wire everything such that no real dissent or debate occurs at the full board meeting.”

What happens, then, are “board meetings that add little value and, incidentally, are also utterly dull.” The deadliest meetings are the ones in which presentations are essentially read-alouds of the board materials while board members steal glances at their devices. This wastes everyone’s time. Every board member should be able to point to some discussions where the “right” answer was truly up in the air or where, ultimately, staff reconsidered something based on board input. If that’s not the case, then you have to ask whether your approach is actually governance or just accountability theater.

6. There’s no celebration — no joy.

Sometimes boards are clearly just going through motions with few moments punctuated by laughter or enjoyment. At some level this could be understandable: Nonprofits work on incredibly challenging and heartbreaking problems that haven’t seen enough progress. This is important work, and boards need to take their oversight roles seriously to help ensure progress. But they also have a crucial role in returning energy and inspiration to the CEO and staff. When board meetings are “all business” — especially in a virtual world — they can become draining, soulless marches from one agenda item to the next.

We’re often in the position of sharing with foundation boards candid feedback from stakeholders. Those presentations nearly always contain highlights of real successes, and when they end with little acknowledgement of progress or celebration of staff’s efforts that drove that progress, it’s disheartening. And, believe us, we hear about it from staff later. Trust is eroded, and the board starts to be seen by staff as just an unpleasant obstacle to be hurdled, making it harder to address what’s going well and what could be going better.

7. The CEO isn’t assessed, the assessment is opaque, or only seen by a subset of board members.

Assessing the CEO is an essential board function, yet it’s often neglected, handled cavalierly, or done in a shroud of secrecy. According to the most recent BoardSource Leading with Intent study, about half of CEOs say they haven’t had any sort of formal evaluation in the last 12 months. That’s a shocking dereliction of duty. A foundation or nonprofit CEO’s performance assessment should be informed at the very least by: clear personal performance goals set at the beginning of the year; an organizational workplan; performance indicators, however imperfect; input from the full board and 360 feedback from staff that goes to the relevant board committee at the same time it goes to the CEO; and a thoughtful self-assessment by the CEO that reflects on all of the above.

While it’s appropriate for a committee to take the lead on this process, there should be transparency with the full board — and incentive pay or changes to CEO compensation should be approved by the full board.

8. The Board doesn’t assess itself.

A good self-assessment process, in which board members can be candid about how it’s going on the key dimensions of governance, is essential for boards to learn and improve. Yet many boards engage in self-assessment rarely, if ever. This, despite the fact that BoardSource has a great, cost effective, product to do this.

An executive session conversation about how it’s going isn’t enough. Even confident board members may be unwilling to share their candid perspective in the moment. Finding approaches for true self-assessment is crucial. There is no way to learn, adapt, and improve without a clear sense of how folks think it’s going today.

Look, we’re quite sure these aren’t the only signs of board dysfunction. But these are common ones in our experience. We’re not implying that it’s easy to get all of this is right. In fact, we know from our personal experience that being a good board member requires conscientious work. So, we owe nonprofit boards a debt of gratitude for service they provide, representing millions of hours of volunteer effort a year. But if you see your board in some of the above, if some of these warning signs are flashing, it’s time for an open conversation about it. The organizations you govern can’t be effective unless you are.

Kevin Bolduc is vice president, assessment and advisory services, at CEP and co-chair of the governance committee at PEAK Grantmaking. 

Phil Buchanan is president of the Center for Effective Philanthropy, author of Giving Done Right, and co-host of the podcast by the same name. 

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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