Wayfinding – the ongoing work of your nonprofit board
“Historically, wayfinding refers to the techniques used by travelers … to find relatively unmarked and often mislabeled routes.”
How apt to describe our sector’s search for the perfect board.
Pop “nonprofit boards” into Google Books and it will count 193,000 entries!
And of course there are blogs and articles too many to count offering advice on the role and structure of the nonprofit board – this one included.
So, there must be a definitive source, no?
Curious, I wondered what “the law” says about boards.
As nonprofit enterprises are first created in their states, I turned to state law for some insight.
From the General Laws of my home state of RI:
“Board of directors” means the group of persons vested with the management of the affairs of the corporation (including, without being limited to, a board of trustees) regardless of the name by which the group is designated. (emphasis added)
In California, the statute for the boards of nonprofit corporations reads:
… the activities and affairs of a corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the board. The board may delegate the management of the activities of the corporation to any person or persons, management company, or committee however composed, provided that the activities and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the board. (emphasis added).
The laws of your state provide some instruction on how nonprofits boards should be structured to carry out their duties — number of directors, required officers, rules for elections, quorums, etc. But these are usually a minimum or default that you can adjust to fit your needs. State law also sets out requirements for certain ways of acting, e.g. duty of care, duty of loyalty, no self dealing, use of electronics in meetings, etc.
But what actually does “management of the affairs of the corporation” mean?
In his book 650 Essential Nonprofit Law Questions Answered nonprofit legal guru Bruce R. Hopkins starts his response to the question What is the function of the board of directors? this way:
“There is considerable disagreement on this point.” He goes on to describe an “ideal standard of setting policy, objectives and general direction,” but repeatedly notes that “in practice, a board’s degree of involvement has every sort of gradation.” And as to the dividing line between management and governance? “The law basically is powerless to draw lines here…”
With board roots in centuries old English Common Law, boards are fiduciaries with “special responsibilities for administration, investment and distribution of property, where that property belongs to someone else.” (Hopkins). Fiduciaries are required to act reasonably/rationally and with prudence.
Okay, not a lot guidance to be found here.
Thus, the need for wayfinding.
Yes, you need to observe the minimum standards set out in state law (with some additional statutes at the federal level. ). But there are so many decisions your nonprofit board needs to make:
- How many directors it needs
- Who should serve on the board
- How often to meet
- How long directors can serve on the board
- The responsibilities of directors beyond those spelled out in the law
- The “other duties” assigned
- What to discuss at board meetings
- How to run a board meeting
- Whether to hire a CEO and other staff
- The scope and execution of the mission, within the founding purpose
- How big the organization should be – budget, staff, scope, assets, etc.
- How to secure needed resources
- The obligations of directors vs staff in securing needed resources
- The future direction of the organization
- How to assess success
- Where management (delegated to paid staff) and governance begins and ends
- Who the officers are and exactly what they do
- The nature and structure of committees
- The nature of partnerships, community relationships, joint ventures
- Etc. Etc. Etc.
Wayfinding is a big part of the ongoing work of your nonprofit board.
Your board choices need to take into consideration so many aspects of your organization, including the size and structure of your staff, your financial condition, your founding vision, your values, perhaps the founder’s role today, your external environment, the nature of your cause, your interrelationships with funders and your network, and so much more.
And just when you think you have everything nailed down….KaBoom! Something is likely to change inside or outside of your organization that upends your current plan and requires you to rethink your people, structure, tasks or direction.
My goal is not to discourage you from pursuing the work of creating an excellent board.
Instead, I want to give you permission to think of your board on an exciting yet never-ended journey, intentionally choosing and adjusting its way as it encounters the dynamic world in which it lives.