Friday, 28 October 2016 16:39

How Nonprofit Boards Differ from Corporate Boards and Why It Matters Featured

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Let’s face it — nonprofit Boards can be hard work! 

As a start in our series on Board management, I thought it would be interesting to take a look at how corporate Boards and nonprofit Boards differs.  It’s an interesting frame of reference that can uncover and explain some of the unique challenges of working with nonprofit Boards.

So, here are just three ways in which nonprofit Boards differ from corporate Boards:

  • They aren’t paid.
  • They are in it for the long haul.
  • They fund your work.

They aren’t paid. So what?

Well — at its heart the biggest issue with the fact that they aren’t being paid, is that they typically have competing priorities. In a big corporation the Boards are paid, which means there are many people for whom being a Board director for a few organizations is their full-time job. They not only take it seriously, but they have the time to dedicate to making sure they have read the Board notes, thought about their questions and stepped up.

But for many nonprofit Board members, this is definitely NOT their only gig. They are also typically holding down a full-time job, may be managing a family, and may also be on more than one Board, or be volunteering with at least 1-2 other organizations. That means that pragmatically, there will be times when they need to choose between attending your meeting, or attending to their own paying clients.

Implications: Most nonprofits can’t afford to pay their Board, and no one is expecting you to. It also doesn’t mean you need to expect less of them, but it does mean you need to make it easy for them to work with you. What can you do?

Simple, you can:

  • Streamline communications (one email with all the key points, not lots of separate emails)
  • Schedule Board meetings a year ahead of time. (Get them in the calendar so people can work around them)
  • Lay out clear expectations (Do you have a give/get policy? What attendance is expected at meetings, at events? Should they be hosting their own events? Etc.)
  • Make sure you set up the systems to allow people to check in with how they are handling their multiple commitments and step-down graciously, if and when their schedule gets too busy.

They’re in it for the long haul

Wow! Yes, they are. I do lots of Board work, and I’m constantly amazed by how many people have been with the organization since its inception. They were friends or neighbors of the founder, they were asked to join when it was just an idea, and here they are, after all these years. Talk about commitment!

When I do Board surveys I ask about Board tenure, and I have a category, “more than 20 years”, and there are LOTS and LOTS of folks who fit in that category. While some corporations also have lots of older Board directors, this is generally discouraged and it compares to the average tenure on corporate Board of around 7 years.

Is it good, or bad??

It depends. People who have been on for that long share a lot — passion, a deep understanding of the organization. Their networks have grown and matured as the organization and its work does, so the reach they have from themselves out into their community and back to the organization is often deep and robust. These people can absolutely be your most passionate and loyal advocates, no question.

But on the flip side — Board members get tired. There’s only so many years you can invite the same people to the same gala; or hit up friends for donations. The secret is having a balance. Give people a chance to recommit, and take a break if and when they need it (3 cycles of 3 years per cycle with a 1 year break, is a practice that works really well).

They fund the work of the Executive Director.

If you’re the executive director or CEO of your organization, then you’ll be very aware that the Board is often paying your salary, or a good share of it, out of their own pocket. This means they often expect to have real strategic oversight of the organization.

Of course they should have strategic oversight— it’s an important part of their job description, but it can be tough to find the right balance between strategic oversight and having someone breathe down your neck. And the truth is, it never does anyone any good to be micro-managed. So how do you help a Board find the balance? A lot of it comes down to the way you set goals and share information.

Boards often get bogged down in the details because that’s all they have. If you’ve ever sat in a meeting while some Board member drills you going $50 over the allocated printing budget— my sympathy goes out to you. It’s not fun, and it’s not productive. But if you reflect on that meeting, it may be that the only concrete information the Board had about how the organization was going were the financials. You need to give them more to work with.

Ideally you have some kind of a simple set of charts that you come back to that show how you’re tracking against your goals. And by goals — I don’t just mean your financial goals, and not even your input measures (like how many training programs you’re running, or how many people have been through your program), but how are you actually changing the lives of your clients?

Of course it takes a while to get to this point. You need to have a clear strategic aspiration — you need to be clear on the outcomes you’re seeking. You also need to have some way of tracking your impact. But even before you get to that perfect system, anything you can do to share more about the actual mechanics of what you’re doing will be helpful.

You also need to remember to help guide the conversation — don’t forget, you’re not just reporting to the Board — they are there for you! Ask them for help on the things you’re grappling with. PR? Branding? Social Media? Technology? Making a decision about whether to hire or fire someone? All of that stuff is exactly what your Board is there to support you with. The more you manage and lead the conversation, the less likely they are to slip back into micro-management.

Nonprofit Boards can be a pain, but when they are working well, your Board be one of your greatest allies and assets. Hang in there, and good luck!

Last modified on Friday, 28 October 2016 18:01
Liana Downey

Liana Downey is an experienced management consultant, who has consistently delivered results for clients on critical topics around the world. Liana is an expert advisor to the Australian Department of Prime Minister and Cabinet. Prior to establishing Liana Downey & Associates, she led McKinsey & Company's Australian government and social-sector practices, and holds an MBA (Public Management) from Stanford University.