Managing a board of directors can be the most difficult and time-consuming challenge for a nonprofit CEO. There are relationships to nurture, information to share, and politics to navigate. Coordinating the activities of a board with the operations of a nonprofit is like choreographing a complex dance routine.
How can you make this challenge less formidable? By ensuring that board members understand their role with the organization. The members of the board and the members of the staff together make up a team with the goal of advancing and achieving the nonprofit’s mission. The team is most effective when everyone understands and fulfills their roles.
The board’s role is that of fiduciary responsibility and guiding the strategic direction of the nonprofit. The board is not responsible for day-to-day management — they hire a CEO to do that. This is a separation of duties that is very important for organizations to achieve to be as effective as possible.
If a CEO is not allowed to do what they were hired to do — run the organization — at best, they will be ineffective. At worst they will leave the organization, creating temporary disruption in leadership for the nonprofit.
Board members should remember that:
- The CEO manages the budget — the board evaluates the CEO’s ability to effectively manage the budget as well as the overall finances of the organization.
- While significant adjustments to the budget should be approved by the finance committee and/or Board, a CEO needs the flexibility to reallocate funds within the budget to improve the organization’s effectiveness.
- Staffing — other than the hiring of a CEO — is the CEO’s responsibility.
Likewise, board members serve with a certain expectation, and most do not want to run the day-to-day operations of an organization. Board members should focus on:
- The overall financial health of the nonprofit
- The impact of the nonprofit toward achieving its mission
- Strategic initiatives
- Evaluation of the CEO’s effectiveness
- Being public ambassadors for the nonprofit
What are some strategies for preventing role confusion?
- Careful agenda planning. One way to clarify roles is to design a board meeting agenda that clearly maps out topics that a board should be addressing. Stay clear of topics that may draw board members into the weeds.
- Summary level financial reporting. When the staff provides the board with high-level financial reporting and key metrics on a dashboard, the board members can focus on the financial health of the organization rather than individual accounts. Leave the detailed review to the treasurer or finance committee.
- Annual board orientations. A board orientation is an excellent opportunity to reinforce the role of the board as well as help new board members become familiar with key aspects of the organization, including the key mission programs, financial reports, expectations of board members, and important policies.
What is an exception to the high-level role of a board?
Some smaller nonprofits need board members to play active roles in the operation of the organization. Board members – who typically are very passionate about the organization’s mission — may fundraise, organize events, and even handle the accounting. It may be the only way these smaller nonprofits can survive until they can secure additional financial resources. As the nonprofit grows and begins to add paid staff to assume key responsibilities, the organization needs to begin to transition its board to a higher-level role, allowing the employees to handle the day-to-day operations. This can be difficult to do initially because of the emotional stake board members have had in the organization, but it is a necessary step in the nonprofit’s evolution.
By clarifying the roles of the board and the hired staff an organization can create a high-functioning team that effectively and efficiently achieves the nonprofit mission and enhances the impact for the stakeholders served.