“CEO oversight? Evaluation? Strategy? No, we don’t do that. But if you want a fundraising gala, I’m your guy!”
That’s how a colleague once heard another board chair describe his own role, and the role of the board he led.
That remark is not representative of most nonprofit boards, but it is one small example of an undeniable fact: Not every board performs at their best, or even necessarily understands what great board performance means. Boards generally do amazing and vital work with skill and dedication, but new research suggests that the sector’s boards could be doing even better.
Leading Edge, the organization of which I am the board chair, recently released a new report on how CEOs perceive their boards, with data from 300+ nonprofits. (Our work focuses on Jewish communal organizations, but these findings are instructive for the whole nonprofit sector.) And let’s start with the good news: Boards are providing tremendous value. Four out of five CEOs agree that their boards make a positive impact on the leader (81 percent) and the organization (79 percent). Most CEOs say their boards provide support and thought partnership to the CEO, communicate well, respond well to crises, and fiscally oversee the organization with responsibility and care.
But many CEOs also report performance issues.
Here are four examples of vital elements of board performance in which our data indicates many boards could improve. These are principles of board governance that, whether your board is high-performing or not, are worth keeping in mind.
1. Great boards understand their roles and responsibilities. This is so basic that it sounds silly to say, but to do a job well you have to understand it. Yet understanding the board’s role and responsibilities is a surprisingly common struggle. Of the CEOs we surveyed, while most (72 percent) agreed that their boards are “generally aware of their roles and responsibilities,” more than a quarter of CEOs (28 percent) did not agree! For something so fundamental, it should be 100 percent.
But this is an understandable problem. Boards meet in private, and organizations often fail to communicate their board’s work and value to their professional teams and communities. In another of our surveys, a majority of employees who don’t work directly with their boards (57 percent) answered “neutral” to the question “The board has a positive impact on the organization.” Respondents added comments like: “I have no idea what the board does and why they exist”; “I know next to nothing about the board”; and “We do not have a board.” (Reader, they have a board.) Every board member begins life as someone who has never served on a board and may not know the role as they begin. Meanwhile, those onboarding new board members have generally been inside the boardroom for years, and they may see the board’s role as too obvious to need explanation.
Boards can make sure every member understands their role and responsibilities with thorough, structured onboarding processes; having all members sign board member agreements; and reviewing board roles and responsibilities regularly.
2. Great boards hold themselves accountable. Even many boards who understand their roles still aren’t holding themselves accountable for fulfilling them. Only 40 percent of the CEOs we surveyed say their boards have clear annual goals. Just 15 percent say their boards evaluate themselves every two years. That’s a problem for board effectiveness; data from BoardSource demonstrates “a relationship between board self-assessment practices and ratings of board performance.”
Boards can improve self-assessment and accountability by making that function core to the charter of a governance committee. The governance committee can be an internal accountability partner, regularly surveying and interviewing board members to assess whether roles and responsibilities are clear, meetings are impactful, and that the board goals are being determined and discussed regularly. Setting board goals can make explicit what is “board business” versus operational meddling. Having an executive committee vet board goals that the chair and CEO put forward creates further buy-in.
3. Great boards invest time and effort building their culture. A culture of open communication, trust, belonging, alignment, and excellence helps groups perform at their best, and that’s as true of boards as it is of professional teams. The most common growth opportunity for board culture is building trust and connection. Most boards we surveyed seem to perform well on measures of open communication and sharing multiple perspectives, but a third of CEOs (34 percent) did not agree that “There are opportunities for board members to build trust with each other.”
Building trust can be difficult — especially in virtual meetings. Boards can invest more in their cultures by holding at least some meetings in person, operating from an explicit set of values that is regularly reviewed and referenced, and planning structured and deliberate time for building interpersonal trust and connection. (BoardSource recommends five to eight hours per year dedicated explicitly to “board social time.”) Don’t shortchange “social time,” as those relationships of trust and understanding are especially needed when there is a crisis and time is short.
4. Great boards support and empower their board chairs. CEOs overwhelmingly agree that board chairs play a vital role, providing CEOs with thought partnership, running effective meetings, and serving as the public face of the board. But strong board chairs are also critical for succeeding at the principles above. Who is best positioned to regularly remind the board of their roles and responsibilities, and help create accountability structures? Who is best positioned to shape the board’s culture and schedule time for building trust and connection? In both cases, it’s the board chair.
Board chairs tend to cycle every two to five years, and whether an incoming chair has past experience chairing another board or is a first-time chair, transitions can be challenging. To ensure board chairs enter prepared and empowered, boards should choose their next board chair before the current chair’s term ends, and schedule ample transition time for the incoming chair. Just as new members should receive structured onboarding, a member who is being elevated to chair needs onboarding. The incoming chair might begin joining the current chair’s private meetings with the CEO in advance of their term beginning, for example. It also helps to keep the outgoing chair on the board for some time after the transition, so the new chair can ask their advice. The CEO also plays an enormous role in supportively onboarding board chairs and nurturing the CEO-board chair working relationship.
The bottom line: Care about board performance. The principles above are just a few of many opportunities our research found for boards to improve. Our report shares many more issues, along with practical actions for addressing them.
But, beyond the details, what’s most important is that boards prioritize their performance. Boards know that they need to oversee their organizations; it can be less obvious that they need to oversee themselves. But nobody else will do it for them. Overseeing the organization is chopping the wood; improving the board’s own performance is sharpening the ax. If every board becomes sharper, nonprofits will shear through the world’s problems more quickly and effectively than ever before.
Daryl Messinger is board chair of Leading Edge and, in 40 years of nonprofit board service, has chaired eight local, regional, and North American boards of varying sizes and missions.
