Non-Profit Questions
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6034-Session6-Boarddevelopmentrev4-5-18.pptxPPPA 6034 Managing Nonprofit Boards
Session 6
Board Development and Reform
Key Topics
Building a board team
Board self-assessments
Board reform
Enlisting and Engaging Board Members
Enlistment process – criteria,
expectations, who invites
Orientation
The board book
Meeting formats: what matters most
(versus show and tell)?
Meeting planning and consent agendas
Committee structure
Self assessments, retreats
Board culture – role of the chair
3
Some Causes of Board Dysfunction
False consensus bias
Social loafing
Groupthink
Social conformity
SOURCE: Trower, 2013
Principles of Board Thinking (Trower, 2013)
Metacognition – ability to analyze one’s own thought process (necessary to strike balance between existing world views and rethinking core assumptions)
Hedgehogs versus foxes – Hedgehogs view the world thorough one single lens; foxes draw on a large body of experience
Boardroom lions versus humble hounds – Lions relentless for change; hounds spend a lot of time on metacognition
Trower: Board needs a mix of hedgehogs and foxes, lions and humble hounds
Obstacles to critical thinking: fear of being wrong; being certain; diagnosis momentum; loss aversion; delusions of human rationality; framing
Five Dysfunctions of a Team Patrick Lencioni
Resolving Board Conflicts (Terry’s Hierarchy)
Purposes
Power
Structure and procedure
Resources
7
Board Self Assessments
BENEFITS
Move from micromanagement to focus on governance
Build more engaged board
Develop board teamwork
TIMING
Transition from working board to staff leadership
Transition in CEO or board chair
Passive, low-performing board
Strategic planning process
Disagreements or controversy
Board Self Assessment Options
Regular meeting (board improvement segment)
Mini-assessments (surveys)
Formal assessment/governance audit
(survey, consultant, retreat)
Individual Board Member Assessment/Evaluation
Board member letter of agreement/contract
Periodic or annual
On end of term
Self-evaluation and peer evaluation
Board chair assessment (by board members or consultant)
Initiating and Managing Board Change
Identify champions and co-conspirators
(role of the chair)
Board-led [but CEO role (explicit or behind the scenes)?]
Strategic recruitment
Board education (articles, speakers, etc.)
Create task force or governance committee
Blue-ribbon commission or committee
Consultant
Trouble! Two Well known cases of board reform
American Red Cross – 2006
Smithsonian Institution - 2007
ARC Case, 2006
Why undertaken
Perceived performance failures after Katrina, Congressional criticism
Methodology
Held governance summit with experts, appointed 7-member panel to undertake governance audit
Focus of audit
Size and composition of board; organization and functioning of committees;
roles of board and management; audit practices
Key issues
Charter designate board chair as “principal officer,” confusion with President role
Charter says board “manages,” led to involvement in operations
Chapter reps on board (30 of 50) had chapter rather than national perspective
ARC Recommendations
Amend bylaws to clarify board role as strategic and governance oversight
Clarify that the board “oversees” management, does not manage
Focus board meetings on in-depth discussions
Reduce board size from 50 to 12-20
Change to self-perpetuating board; government officials to become advisory council rather than ex-officio members of the board
Redefine Nominating Committee as Committee on Governance and Board Development, to do regular assessments
Board gets to recommend board chair for appointment by POTUS
Say that board elects CEO (in past was nominated by chair, elected by board)
Redefine committees
Strengthen whistleblower and audit policies
Define Regional Chapters to oversee local chapters
Clarify role of local boards
Smithsonian Governance Review, 2007
Why undertaken
Controversy over spending by previous Secretary, Congressional pressure
Methodology
Formed governance committee and independent review committee
Focus of review
Accountability and governance best practice
Key issues
Flow of information to the board
Access of CFO, General Counsel, and IG to the board
Audit, whistleblower, board oversight
Smithsonian Recommendations
Clarify role of Chancellor (U.S. Chief Justice) and chair of the board
Board to meet more regularly
Revise committees
Refine process for executive compensation
Nominating Committee to become Governance and Nominating Committee
CFO attend board meetings, have direct access
Annual public forum, increase input to the board
Rein in Smithsonian Business Ventures (to follow same policies on expenses)
Create dedicated staff office to support the board
Smithsonian governance website
(See also various GAO reports available on Web)
