ch. 4, unit 2

Buildings and grounds

For nonprofits that own or manage their own facilities or property, this committee would monitor their condition, recommend maintenance and repairs, and plan renovation projects. If there were no board members with architectural, contracting, or building experience, the committee can solicit outside help.

Who leads NPO?

Partnership between the board and the CEO as ideal, but different views on exactly how this partnership should be constructed and how it should operate

Financial Secretary

Person who manages financial records and receives financial records

ex officio

Seats designated to be held by and individual who holds a certain office or position

Board Responsibilities: Legal

The Sibley Hospital Case (1974) Intermediate sanctions (1996) Sarbanes-Oxley Act (2002) Form 990

Special events/activities

This committee develops special events for the organization.

Marketing/Public Relations

This committee would be responsible for establishing a marketing plan to promote the products/service/programs of the organization. This often entails creating some kind of working relationship with the media and the broader community

excess benefit transactions

a persons level or type of compensation is deemed to be in excess of the value of the person's services

conflict of interest

a situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity. it is necessary for boards to put procedures in place in order to handle this situation properly can not use their position to benefit themselves

Intermediate sanctions (1996)

addresses 2 extremes of ignoring the NPO when it engages either in excess benefit transactions and/or revoking its tax status. pentalize offenders rather than entire organizations. ->disqualified persons

Form 990

annually reported return that certain federally tax exempted organizations must file with the irs.

private inurement

any insider(board member, officer of the organization, etc...) can not unreasonably benefit from the organization's funds

purposive-rational model

based of Max Weber's theory of bureaucracy, conceives the board at top of hierarchy and CEO merely as its agent

generative mode

board is engaged in creative, out-of-the-box thinking in which visionary leaders often engage. "coming to understand things in new ways" May lead to paradigm shifts. essential foundation for setting education and goals

Governance as Leadership

board should assume a leadership role that blurs the distinction between policy and implementation, focusing everyone's attention on "what matters most" includes 3 modes of governance (fiduciary mode, strategic mode, and generative mode)

Governing boards

boards that hold ultimate responsibility for ensuring that the organization serves its mission and for the overall welfare of the organization itself

Duty of Obedience

comlying with laws and requirments when implementing actions for its mission

better terms for advisory boards to avoid confusion with governing boards

councils

The Sibley Hospital Case

court case which established... -Duty of Care -Duty of Loyalty -Duty of Obedience

panel on the nonprofit sector

created by organization independent sector. offers recommendations and principles for good governance and ethical practice

Duty of Care

exercising due-diligence and monitoring and supervising the organization

Sarbanes-Oxley Act

federal law that set new standards on all US public boards and their management and public accounting firms. requires top management must individually certify the accuracy of info or face the pentalty. 2 provisions: Destruction of documents Protection for whistle-blowers (individuals who report the wrong doing of others are protected under the law)

corporate secretary

has responsibility for the maintenance of the organizations official documents and records

Parliamentarian

keeper of order

Duty of Loyalty

members put interests of NPO above own interest

Policy Governance Model

need to establish and enforce a clear line between the board's responsibility for policy making and the executive's responsibility for implementation

Janus metaphor

nonprofit boards are positioned on the boundary between the organization and its external environment Inward-looking role in fulfilling fiduciary responsibilities on behalf of the membership or society Outward-looking role in meeting responsibilities to the organization itself and advance its interests

social-contructionist model

official and intended goals, structures, and procedures may exist only on paper actual goals structures and procedures emerge and change as participants interact and socially construct the meaning of ongoing events

Treasurer

the person who will deal with the financial aspects of the organization. (S)he will spear-head the creation of the organization's budget and make sure that expenditures do not exceed revenue

board-centered leadership

when CEOs leadership is designed in a way to support the board in its governing responsibility (CEO supports and facilitates of the boards work)

fiduciary mode

when board operates in this mode it concentrates on tangible assets, faithfulness to mission, performance accountability, and obedience to law (so basically generally addressing its legal responsibilities)

working board

where volunteer members of the board have a hands-on role and perform all the organizations operations, from fundraising, to balancing bank accounts, to creating programs

potential Claim Areas for Directors, Officers, or Trustees

Acquiescence in conduct of fellow directors engaged in improper self dealing Acts beyond organization powers Acts of executive committee Approval of organization acquisition with resulting loss of organization assets Attendance at Director's meetings Conflicts of interest Disclosures of material facts Dissemination of false or misleading info Failure to detect and stop embezzlement Failure to file taxes as required Failure to supervise the activities of others properly False or misleading reports Fraudulent conduct

Board Responsibilities: Functional

Appoint, support, and evaluate the CEO Establish a clear institutional mission and purpose Approve the organization's programs Ensure sound financial management and the organization's financial stability Establish standards for organizational performance and hold the organization accountable Set direction and policy for a nonprofit organization

other types of Board Committees

Audit Committee/ Fund Development Special events/activities Planning Buildings and grounds Program Committee Personnel Committee Membership Marketing/Public Relations

criteria for Successful Committees

Clearly defined tasks to be accomplished Established times lines Committed Chair Committed Committee Members Time for the Committee members to meet Resources

elected boards

Common in member-serving and advocacy organizations Governing board elected by the membership of the organization; can lead to a "popularity contest" Membership terms of an elected board may be brief/ turnover Skills of board members may be uneven CEO must have a high tolerance for uncertainty Board members less likely to become stale, uninvolved or homogeneous in their membership

twelve Principles that Power Exceptional Boards

1. Constructive partnership 2. Mission driven 3. Strategic thinking 4. Culture of inquiry 5. Independent-mindedness 6. Ethos of transparency 7. Compliance with integrity 8. Sustaining resources 9. Results-oriented 10. Intentional board practices 11. Continuous learning 12. Revitalization

Planning

A committee designed to coordinate short and long term planning.

Personnel Committee

A committee designed to oversee aspects of human resource management, especially as it relates to the evaluation of the Chief Executive Officer. The committee might recommend salaries, create staff salary levels, review and create benefit packages, and handle grievances when board involvement is necessary.

Membership

A committee designed to oversee aspects of membership development.

Program Committee

A committee designed to promote and oversee the programs of the organization. This committee might have to work very closely with staff; therefore, its members must exercise caution as to not meddle in areas of management.

Audit Committee/ Fund Development

A committee that develops policies pertaining to fund raising, investment policies, or resource development. can also be the Finance Committee.

BoardSource

American nonprofit organization founded in 1988. Its mission is "to inspire and support excellence in nonprofit governance and board and staff leadership

Vice Chair (or Vice President)

Assumes the duties of the President/Chair when the chair cannot fulfill duties

board Responsibilities

Board members are "fiduciaries of the organization's resources and guardians of its mission" Board members are accountable "for everything the organization does and how those things are accomplished"

advisory boards

Boards that lack legal responsibility for governing their organizations are not governing boards

executive psychological centrality

CEO's are SEEN as responsible for the organizations success or failure

"Psychological Centrality and Board-Centered Leadership"

CEOs should accept the reality of their "psychological centrality" in the organization and provide "board- centered leadership"

Secretary (or clerk, Corresponding Secretary, Secretary)

organized and have the ability to record information accurately, including keeping minutes of the board meetings.

boards

planning entities. holds responsibility to make sure organization is following its mission and doing what it is suppossed to be doing

give-or-get policy

requiring each board member to with personally give or get funds from others to total the minimum amount needed

Chair (or President)

should be someone who has knowledge and manage the activities of the board. It is suggested that the board president/chair have some type of experience with the board prior to assuming office. A strong president will set the work standard for the board and keep them on track with their tasks and committee work. A strong president will serve as a buffer between disgruntled trustees and the executive director, mediate tensions and help to resolve conflict. A weak president, however, may allow the creation of various factions, create personal agenda, and try to secure too much power for him/herself.

three models of Board-CEO Relationship

-Policy Governance Model (Carver, 1990) -Governance as Leadership (Chait, Ryan, and Taylor, 2005) -"Psychological Centrality and Board-Centered Leadership" (Herman and Heimovics, 2005)

Executive Committee

Consists of the officers of the organization and committee chairs, typically Provide guidance for the nonprofit between meetings of the governing board. The duties of the executive committee are and should be explicit (e.g., only during emergencies can they make policy decisions. Create a discussion agenda for the full board for the next meeting. Rule: The executive committee should report and make recommendations to the whole board. Officers serve along with committee chairs and the Executive Director (who is ex-officio)

Nominating

Critical role is to identify future leaders of the organization Facilitate the election process & eliminate any conflict between the nominees and organization

types of Governing Boards

Elected boards Self-perpetuating boards Appointed and hybrid boards

Do Not's of Board Members

Engage in the day-to-day operations of the organization Hire staff other than the chief executive Make detailed programmatic decisions without consulting the staff (-> board should stay more policy oriented)

types of Board Committees

Executive Committee Finance Nominating

advisory boards and councils

Have no legal responsibility or authority for governance of an organization Members may provide a nonprofit with technical assistance/expertise, assist with fundraising activities, serve as advocates or ambassadors in the community May or may not be formally established in the nonprofit's bylaws Role and parameters should be formalized with guidelines that outline the responsibilities of the council, etc.

the Challenge of Nonprofit Governance

Janus metaphor Complex responsibilities require diverse qualities in the individuals selected to serve on the board

Self-Perpetuating Boards

New members are selected by the existing members of the board who recruit them according to criteria established by the board In a new nonprofit, the initial board members are known as "founding board members" who then develop bylaws, etc., which outline how the organization will be governed Creates a relatively stable situation for the organization and its CEO as board members change less frequently; boards recruit new members with skills/ expertise needed at the time Board needs to maintain diversity to guard against becoming homogeneous

board Orientation

Overview of Organization's history Bylaws, Articles of Incorporation Mission, Vision and Goals Strategic Plan Roles & Responsibilities of Board Members Roles & Responsibilities of Executive/Staff Organizational Structure and Policies Review of Board Structure Copy of Board Members List Review of Major Activities Copy of Annual Report Office Procedures Fiduciary Requirements/policy Minutes & budgets of current fiscal year

problems with Measuring Board Effectiveness

Reliance practitioner wisdom rather than science Lack of a substantial body of research on nonprofit board performance Lack of a single definition of board effectiveness Board effectiveness is "whatever significant stakeholders think it is, and there is no single objective reality"

Finance

Should work closely with the financial officer of the nonprofit and the executive director. Oversees the critical role of financial oversight Advises the board and the organization about the financial affairs Can help with fundraising and event planning

criteria for Effective Boards

Strong nomination and recruitment process Election of strong officers Strong and complete orientation process Continued Board Development/Education Evaluation of Board Performance Updated Board Job Descriptions

board Composition

Typically boards are between 10 and 20 members. Note: a board with more then 20 members should be cautious about its ability to conduct business and remain accountable. Boards should also exercise due diligence to select members that will representative with regard to gender, age, ethnicity, skill sets, education and etc. Too much emphasis in one area can create a one-sided boar

Terminology for boards (depends on specific organization)

-Board of trustees (mainly used by educational, cultural, and medical institutions) -Board of governors -Governing council -Board of directors (usually for NPOs who are chartered as corporations and members of the governing board are directors of the corporation) Other terminology

typical Board Officer Positions

-Chair (or President) -Vice Chair (or Vice -President) -Treasurer -Secretary (or clerk, Corresponding Secretary, Secretary) -Financial Secretary -Parliamentarian

Board Roles Responsibilities

1. Ensure the mission is carried out 2. Meet fiduciary and financial mgt duties 3. Contribute to the organization's bottom line 4. Respect other board members 5. Respect and support staff 6. Enhance the public image of the organization 7. Recruit other volunteer leaders to serve 8. Maintain high ethical standards 9. Maintain board confidentiality 10. Recognize conflicts of interest 11. Set the organization's overall program from year to year - engage in planning 12. Strengthen its own effectiveness as a board

strategic mode

when operating in this mode, boards go beyond fiduciary responsibilities and create a true strategic partnership with management. Addresses matters like the organizations long-term directions and goals

Appointed and Hybrid Boards

• A typical model for public organizations such as universities • Members selected through appointment by some authority such as the governor of a state, etc. • In hybrid boards, some members may be elected and some appointed or serving ex-officio • Hybrid boards can keep organizations responsive to their constituencies as well as better accountability • Appointed or hybrid board members may lack the commitment to the organization and may not fully participate in the work