Hooray! for reviving purpose-driven boards
Anne Wallestad, the CEO of BoardSource, has been rocking the nonprofit universe this month with the release of The Four Principles of Purpose-Driven Boards. I encourage you to read her March 10, 2021 article in Stanford Social Innovation Review.
What makes Anne’s article so noteworthy isn’t that her sentiment is new. But when BoardSource speaks, the nonprofit community listens. And, she said it so eloquently, especially for these times.
Here are the four principles of purpose-driven boards:
- Purpose before organization. A board’s first loyalty is to realize its purpose. Achieving that purpose may demand transcending the organization to achieve it.
- Respect for ecosystem. Boards need to understand the community in which they operate, the issues they serve and respect the other players in that system.
- Equity mindset. Boards need to ask recognize disparities and inequities in society and prioritize decisions to advance equity.
- Authorized voice and power. In our system of corporate governance, boards represent the community they serve and act in its best interests. This requires both listening and embedding lived experience into the board itself, as equal partners.
The purpose-driven board has a history at least three decades long and likely more.
Once in favor in governance circles, now often dismissed, is the PolicyGovernance(R) framework of John and Miriam Carver. At the heart of this framework is a focus first and foremost on delivering the Ends, or community impact.
In his 1990 book Boards That Make A Difference, Carver says:
“The only justifiable reason for organizational existence is the production of worthwhile results.”
“The … impact on the world … should be chief interest, even obsession, of the governing board.”
Or simply stated: “What good? For whom? At what cost?”
In Carver’s world, it is board work to be the link with the “moral ownership.” To ask, for whom or what exactly are we the trustee?
Back in 1986, Kenneth Dayton, then CEO Of Dayton Hudson Corp., spoke to Independent Sector, a speech that was groundbreaking for its time. The speech was published as a monograph the next year. I would have loved to be there. I keep that monograph close and wrote about it in my article Governance is Governance.
In it, Dayton says about boards: “As representatives of the public, [board of director’s] be the primary force pressing the institution to the realization of its opportunities for service and the fulfillment of its obligations to all its constituencies.”
And in BoardSource’s own 2005 monograph, The Source, Twelve Principles of Governance that Power Exceptional Boards, Principle #2 is being Mission Driven.
So why have our boards drifted so far away from purpose?
Here’s my hypothesis.
In my own book on board governance, I write that as organizations move farther and farther away from their founding, they tend to drift away from the passion of purpose that created them.
As organizations grow, everything becomes more complicated. Finances are always pressing matters for boards, as are staff. And policy. And buildings. Before they know it, the gap between the board’s immediate focus and fulfilling the mission is a chasm.
Then, trying to improve their governance, those boards are hit with the shoulds and how-tos of being a board. Those trainings tend to be consumed with instruction about financial oversight, CEO-Board relations, term limits, or so-called fundraising obligations (you know I have a lot to say about that!).
But when was the last board training you attended all about how the board can focus on achieving its nonprofit purpose? One of the hardest exercises I undertake with board as part of strategic planning is creating a logic model. The hard part: courageously articulating what is the impact the organization is trying to achieve.
What I truly appreciate about Anne’s recent article is that it acknowledges what the governance research and a few of we practitioners have been preaching: that there is not only one way to be a board. “For all these reasons, a board can be redesigned in any number of ways, provided it has the collective will to do so. This is both the beauty and the challenge of a board structure…”
So let’s take a collective board breath. Let’s deeply inhale this the focus on purpose-driven boards. For every board member, let’s promise to put purpose above all else.
Our society depends on it.