But what if instead of these solely fiduciary roles, the Finance Committee also facilitated strategic thinking within the Board about the short and long-term financial condition of the organization by: developing a deeper financial analysis of organizational health, developing financial literacy among the directors, analyzing trends, preparing long-term financial forecasts based on different strategic scenarios, bringing strategic financial issues to the attention of the board for discussion and planning
and leading the discussion on key performance indicators for the Board and then revising financial reports accordingly
In a room filled with governance gurus and nonprofit capacity builders, the overwhelming consensus was that our current board model is stuck in the industrial past. We need to constantly evolve – or totally transform — governance structures to be smart, nimble, responsive and adaptive to the new world order of uncertainty and rapid change.
Here, on the other hand, are some of the key principles of a well-functioning board that I have discovered:
– Ideally, the organization should be new and, if not new, should at least be doing something that is new. You can easily test a group’s raison d’etre by attending a board meeting and calculating how much time is spent on matters that, if you had just wandered accidentally into the room, would in no way identify the organization’s reason for existence.
Decisions answer a particular question confronting us here and now. They often lack application to any future questions that might arise.
Policies, on the other hand, provide a framework for making decisions that can be applied to future questions. Not only are they key to sound board decisions, but policies allow boards to more effectively delegate authority to others.
BUY IT FOR YOUR BOARD TODAY! Thank you!.
Gayle’s newest book was just released by Emerson and Church, publishers of Contributions Magazine.
It’s an updated version of How are we Doing? her one-hour read to help your board start a conversation about its own effectiveness.
We’ll be sharing excerpts from chapters in future blogs. Meanwhile, here’s what the publisher said:
A high-performing, diligent board that takes its responsibilities seriously is the Holy Grail of nearly every nonprofit in the U.S. Such a board means more money raised, swifter policy decisions, steady governance, and less ibuprofen for the CEO.
But can you realistically get there from here? Can you put your average or good board on the road to greatness? Indeed you can, says Gayle Gifford in How to Make Your Board Dramatically More Effective, Starting Today. And you’re closer than you think.
Gifford’s approach is ingenious. She doesn’t lecture, doesn’t scold, doesn’t harangue. Instead she challenges your board to transform itself by answering a series of trenchant questions. Here’s a sampling:
- How well do we know our community’s needs?
- Do we know if our programs are having an impact?
- Have we given our CEO the necessary support?
- Have we decided the board’s role in fundraising?
- Do our committees improve the functioning of our board?
- Does our board govern and resist the temptation to manage?
- Is our relationship with staff what it should be?
Tradition holds that nonprofits create a vice president position so they’ll have someone ready to step in should the president be unable to complete his or her term – in the same way we have a vice president of the United States. But your bylaws could just as easily mandate another officer to fill this role.
So rather than taking a perfectly capable board member and only ask them to hold their breath waiting for the president to expire, wouldn’t it be a better use of the VP’s talents to have something worthwhile to do? Especially if part of the process of choosing a VP is to groom that person for leading the board?