The board’s role in strategic change

I’ve said it before and I’m happy to say it again. A board’s ability to provide strong governance really does matters to an organization’s success. In fact, I believe that an organization can be no stronger than its board – at least in the long term.

BUT DON’T JUST TAKE MY WORD FOR IT. 

Consider the following from the folks at the Nonprofit Finance Fund. Based on work with hundreds of nonprofits, they’ve identified 10 characteristics of organizations that succeed in making strategic changes. Notice how often the words “board members” appear in the list.

  1. Leaders [including board members] who see the whole of the organization and who understand that long-term success in carrying out a group’s mission is more than the sum of its programs or projects.
  2. An entrepreneurial mind-set: an openness to exploring and investing in new services, technologies, and ways to do business.
  3. Top executives and board members who have a firm grasp on the link between financial performance and the ability of a group to carry out its mission effectively. They rely on data (quantitative and qualitative, programmatic and financial) to inform decision making.
  4. A commitment to planning and self-reflection, including a management team that knows how and when to seek the advice of outside advisers for strategic planning, producing financial models, and measuring results.
  5. Adaptive capacity: a culture that values nimbleness, a willingness to test new ideas and make course corrections in the face of errors, obstacles, and new information.
  6. Board members who understand that social returns require taking risks, risks often involve losses, and experimentation can be costly.
  7. A record of strong financial performance, characterized by operating surpluses year after year, sufficient levels of working capital, and the gradual accumulation of one or more reserve funds.
  8. Access to flexible and “patient” capital in relation to the proposed plan for transformation and the size of the organization. This enables the organization to cover costs until it can support itself with reliable revenue.
  9. A strategy for generating reliable and regular streams of revenue and a commitment to hiring talented people.
  10. A continuous focus on results among board members, top leaders, middle managers, and all other staff members.

Is your board up to the challenge of leading through strategic change? Or is the board holding the organization back? Think about it.

What's your take on this topic?

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