January 15, 2016

A Nonprofit Board or a Group of Dead Fish?

Bridgespan Partner David Simms writes about how many nonprofit boards are poorly managed and proposes steps to make them more effective.

By: David Simms

(This weblog post originally appeared on the Harvard Business Review website.)

I write this just after returning from an energizing meeting in San Francisco with Bridgespan's board. We wrestled with important strategic issues about, among other things, how (and how fast) to expand our global work; how to modify our operating model to increase our impact a hundredfold over the next 10 years; how to increase diversity among our staff and board; and how to use online engagement and social media to its full potential. The discussions were robust, the collective wisdom sharp, the group engaged.

I know this isn't always the typical experience in nonprofit boardrooms.

During a conference I attended last month at the Omidyar Network, one of the CEO participants described the nonprofit board at one of his prior organizations as "an aquarium of dead fish." Many of the nonprofit executives in the room laughed out loud — I suspect partly out of nervousness. That description hit maybe a little too close to the mark.

What some board members tell me, when pushed, is that they tolerate things on a nonprofit board that they wouldn't stand for in their day jobs. The boards don't ensure that the organization has a sound strategy, they tolerate mediocrity in management, they don't hold the organization accountable for results, and they don't ensure that resources are adequate to accomplish goals. The president of a very large community foundation went so far as to tell me that "the overwhelming majority of boards in this region are broken." He was characterizing the governance of more than 7,000 nonprofits.

Why is this? Nonprofit organizations are tackling critically important issues — improving our schools or the environment, for instance, enhancing our civic life, or working to fight disease. They have smart board members who care about these issues. People take time out of their busy lives — away from friends and family — to sit in on meetings. These volunteers obviously aren't looking to fail in their roles as board members; even with the best of intentions, it just seems to happen.

I don't have an answer. I don't know why so many nonprofit boards aren't succeeding in their governance roles. But I do know what makes for a truly engaged board and valuable, productive meetings.

First and foremost is leadership. The chairman sets the tone and works with the executive director to set the agenda for each meeting and the rhythm for the topics to be discussed over the course of the year. Note that the agenda doesn't focus on "informing" the board; rather it engages them in discussions about central issues.

Second, a high-performing board brings a great diversity of experiences. They come from extremely successful careers in business, law, nonprofits, academia, and elsewhere. They are carefully vetted before being asked to serve, and they make their attendance at every meeting a priority — they want to be there.

Third, engaged board members do their homework before the board meetings. They review the organization's financials, study reports on performance, do their committee work, and prepare questions. Which brings us back to the first point: balancing a modest amount of financial reporting and overview of program accomplishments with a more generous amount of collaboration and discussion. In Bridgespan's recent meeting, the board members asked insightful and, frankly, very tough questions. They shared their experiences from their very different but highly relevant backgrounds. And they engaged in "generative thinking" where we needed it.

So what would you add to this list? What sort of dynamics do nonprofit boards need to cultivate to succeed — and avoid resembling an "aquarium of dead fish?"

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