Why telling boards that governance matters, matters

Okay, so there aren’t many nonprofit boards that live up to the “Platonic ideal” of good governance. But then,  the ideal is tough to achieve — and even harder to maintain – in any area of human endeavor.  As the saying goes, “the spirit is willing, but the flesh is weak.”

That’s why I’m inclined to cut boards a break. And for the most part, the boards with which I’m privileged to work in my consulting practice do not disappoint. In fact, I’ve yet to meet even one person who has signed on for board service with the intent of doing a bad job.

However, I’m not naive. I know that not everyone in nonprofit circles shares my hopeful view of board governance. Case in point, a discussion starter on one of the several LinkedIn groups that I follow. The author – a self-proclaimed “social entrepreneur” – lobs the following complaint in the direction of volunteer boards.

. . . most nonprofits are saddled with the burden of a constantly rotating volunteer governing board whose members are largely uninvolved in the organization’s daily operations (particularly fundraising). Worse, they are largely unaffected by their own poor performance compared to their peers on for-profit boards (whose incomes will be affected if their company under-performs).

Wow! With friends like these, nonprofit boards don’t need enemies.

BOARD CHAMPIONS WANTED

Rather, boards need champions who believe that good governance is possible and that it matters – especially when the work is done with hearts toward God. I’ve seen with my own eyes that the quality of governance has a profound effect on the organization’s overall effectiveness and by extension, on Kingdom goals.

As I say often in my teaching and writing, board work within the context of a faith-based organization is more than a response to a legal requirement. It is also a practice of faith. To borrow a definition from my friend and fellow board champion David Tiede, governance is the stewardship of powers (exousiai) to accomplish an organization’s mission for the sake of the Gospel. When approached with a ministry heart, governance can be a powerful instrument for God’s action.

PUSH ON IN PURSUIT OF THE IDEAL

So ignore the naysayers. Board members must be told (often) that how they govern is key to the organization’s overall effectiveness and fidelity to mission. So what if boards don’t always live up to the ideal. That’s no reason to give up the cause. We need to keep on believing that good performance is possible – and needed.

Talk back: What is your experience with boards of faith-based nonprofits? Am I too optimistic in championing the impact for good of a board’s work?

Comments

  1. Nice article — and thank you for continuing the conversation that I started on my blog. I think that we agree more than you expect, though I appreciate your focus on that one paragraph from my blog as a launchpad to start a new article of your own.

    My point was not that we should give up on boards, and certainly not abandon the idea of governance. Rather, the primary point of that article to highlight the particular need that nonprofits have for “bridge-steppers,” in the words of the article’s main source, Patrick Esquerre. I brought up the items you quoted as examples of the particular reasons for this.

    I am not against boards. Many are high-functioning, and most of their members are there for the right reason (although it is indeed naive to think that 100% are). However, the governance architecture that oversees nonprofits is flawed. While I generally focus my comments on human service nonprofits (as opposed to arts, etc.), I defend my point that most boards are comprised of people who do not understand the reality faced by the organization’s clients; this is simply the nature of such entities, which are more typically comprised of the donors than the recipients of services.

    Additionally, my point regarding boards not facing the ramifications of their actions is a very harsh one, but a true one. If a nonprofit board makes a series of bad decisions that result in the shuttering of the organization, their lives are largely unaffected other than socially/emotionally. Whereas for-profit board typically have major financial ramifications if their company folds, their non-profit peers simply stop showing up for their board meetings, stop taking conference calls… and stop being asked for money.

    The ramifications of such a failed board’s actions are felt by its clients (who no longer receive services) and by its employees (who no longer have a job). And yet while the former are occasionally represented on boards, they rarely hold more than 10% of board seats. And the latter are generally forbidden from being placed on the board — indeed, the tax filing for nonprofits requires them to report the income that their board members derived from the organization in order to ferret out any possible “conflict of interest.”

    I’d like to put forth the argument that such people do not have a conflict of interest, but a vested interest in the organization’s success. Obviously, matters such as compensation and employee benefits would need an impartial governing structure to review and accept changes, but that is such a rare occasion that it seems odd to formulate the entire governing structure of an organization in such as way as to avoid this dilemma.

    (Sorry to write a reply longer than my original blog. 🙂 )

    Looking forward to continuing the conversation!

  2. Jeremy, Thank you for your thoughtful response. I’m glad to hear that you are not against boards and have in fact met many that are high functioning.

    Your assessment of board members as not understanding the reality of the persons served by the organization is exactly why ongoing board education is so important. As for boards being made up of donors, I hope so — and that includes board members who are also clients. I expect 100 percent as givers.

    When it comes to the ramifications of inferior board work, boards of nonprofits are legally responsible for fiduciary care of the organization. That’s why there is directors and officers insurance.

What's your take on this topic?

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