Board Members as Champions of Great Governance

According to the Leading With Intent, 2017 National Index of Nonprofit Board Practices Survey^{Disclosure 1}

1. Boards are no more diverse than they were two years ago and current recruitment priorities indicate this is unlikely to change.
2. Boards are starting to embrace their roles as advocates for their missions, but stronger leadership is still needed.
3. Strong understanding of programs is linked to stronger engagement, strategy, and external leadership-including fundraising.
4. Boards that assess their performance regularly perform better on core responsibilities.
5. Chief executives and board chairs agree that the board has an impact on organizational performance, and that two particular board characteristics matter most: the board’s understanding of its roles and responsibilities, and the board’s ability to work as a collaborative team toward shared goals (Board Source, 2017).

Board members as champions of diversity

Not-for-profit boards influence every aspect of the organization. And while there’s no absolute standard for the number of directors or members, most states in the U.S. require a minimum of three board members. Board size will vary depending on your constituency, operational budget, staff size, mission, and fundraising needs. But it should include leaders representing various community businesses and industries.

Diversity is all about varied perspectives, relationships and experiences. Legal, finance, human resources, real estate, media, medical, advertising, government, hospitality, education, technology and religious fields serve as partners for not-for-profits in both lending their expertise and their volunteer leadership. A strategic board composition that includes racial and ethnic diversity equips your organization to plan for the future, manage risk, support current needs, and operate within the complex society in which we live. A well run, productive and diverse board is one where new talent is embraced and existing board members feel fully engaged.

The benefits of board diversity include the ability to be reflective of the community, responsive to environmental shifts, inclusive in its decision making, and dynamic in its function. Recruiting new board members is typically a collective effort—shared between the board and the organization’s staff. And the ways to source diverse prospective board members are numerous. In addition to contacting existing corporate sponsors, individual supporters, key business leaders, and existing volunteers, you should also seek board engagement from your constituents, industries not yet represented on your board, and institutions that align closely with future strategic goals.

Board members as engaged leaders

When a new board member joins your organization, it’s critical that you host an orientation covering operations, governing documents, and board member responsibilities.

A board member orientation might include reviews of the following items, which may be supported by a Board member agreement of understanding of roles and responsibilities that requires a signature. We cover some of these items in more detail later in this document.

1. The not-for-profit’s mission, history, values and a tour of the facility
2. Contact information of current board members and key staff
3. Board member roles and responsibilities
4. Key policies
5. Governing documents
6. Summary of Directors and Officers Insurance Policy
7. List of committees and who serves on them
8. Calendar of meetings and events
9. Introduction to key stakeholders

One way to spur immediate board engagement is to assign new members to a committee as a part of the onboarding process. Understanding their particular passion and expertise will facilitate a well aligned placement. Some common committees of a not-for-profit board are Finance, Investment, Fundraising, Program, Nominating, and Planned Giving.

For committees overseeing the finance and investment functions, the ‘Truist Investment Committee Report Card’ is a helpful tool in assessing investment committee dynamics.

To access the investment committee report card, you can visit the Investment Committee Toolkit at truist.com or contact one of our advisors.

This tool allows you to review the investment committee’s function as it relates to committee members, governing documents, meeting frequency, and other key performance indicators.

Annually reviewing existing programs and committees with all board members is a best practice that helps keep board members more actively engaged.

Board members as informed advocates

New board member should be presented with the following governing documents of the organization: Bylaws (including provisions covering internal policies and procedures), Articles of Organization/Incorporation, and General Policies. Remember too that one of the most significant board powers is the ability to hire, fire, evaluate, and compensate the CEO/executive director. Board members provide vital oversight, insight, and guidance to the CEO/executive director on the organization’s daily management.

Board members who are familiar with the organization’s bylaws are best positioned to support the mission through strong fiduciary oversight.

The following key provisions are typically included in the bylaws:

• Types of Officers that serve on the board
• Executive committee powers
• Terms, powers and succession of officers
• How vacancies are filled on the board as well as the Executive Director/CEO
• Term limits
• Meetings to be held
• Quorum requirements
• Number of members/directors required to approve an action
• The person (s) responsible for reviewing the organization’s financial statements and dispersing organization’s funds
• The process of amending by-laws

Other governing documents to review include the organization’s Conflict of Interest Policy, Gift Acceptance Policy, Attendance Policy, Whistleblower Policy, Financial Policy, and Investment Policy. A helpful practice is to have the staff and board members all sign an acknowledgement of the policies.

Board members as effective fundraisers

Contributed income is a crucial revenue component for any not-for-profit organization. For some, however, it’s the only revenue source. Income diversification should be a top priority. Without it, your organization becomes vulnerable if contributed income from any source is on a declining trajectory. Lower contributed income could necessitate program cutbacks and staff reductions—or even force you to merge with a healthier partner or shutter operations.

Board members play an active role in attracting and retaining financial resources for the not-for-profits that they serve. In fact, it’s a board member’s fiduciary duty to provide direct, personal charitable support, and/or leverage their network and relationships to generate institutional or individual support.