The role of a Board member in non-profit organisations

Chairing and Facilitating, The International Community | 0 comments

For the last five or six years I have been the Chair of the Board of a Foundation (Stichting in Dutch), a non-profit organsation, and with a group of new Board members we have recently been discussing the role of the Board. I’ve been on the Board of three other non-profit organisations in the past and have also been on the Board of two commercial companies, one in The Netherlands and the other in Belgium.

Indeed there are many similarities whether it is a private company or non-profit. For me the two main themes for a Board member should be providing oversight and perspective.

Oversight especially of the finances, ensuring that the organization is financially sound, that the organisation is following its own rules, auditing-type questions are asked, and that the accounts are correctly done and properly reported.

Perspective in terms of mission and strategic direction, which are also areas where a Board should play a strong role.

We have a paid Executive Director, so there are parallels with a CEO in a for-profit organisation, and obviously the Board should select and appraise this person.

And the Board should also ensure legal and ethical integrity, checking that standards are being met.

There are also differences however. Being on a non- or not-for-profit Board carries many of the responsibilities of a commercial or for-profit company, in addition to additional burdens.

Guardianship of the organisation is an integral part of the role of a non-profit Board member. For example ensuring the mission is fulfilled and that the people it is meant to serve gain genuine benefit. Non-profits are usually financed with money donated by individuals or grant-making bodies, in our case also local government, given in the expectation that it will be used responsibly for the correct purpose.

Board members also bring their own reputation with them, even more so than on a commercial Board. They will become associated with the Foundation’s or Charity’s reputation.

There are other dangers of being on the Board of a non-profit.

Clearly Board members of any Board should not micromanage executives or even manage and especially not the day-to-day running. I love the phrase (from the wonderful Lucy Marcus), and I wish I had thought it up, of Board members being ‘hands on, not hands in’.

This can be difficult for some non-profits. Whether it is a Charity or a Foundation, the role can get blurred.

Board members might step in and help with a number of other tasks in addition to pure finance, such as helping out with fund raising, marketing, legal advice, being involved in management decisions or simply by being an extra pair of hands. They may even be expected by their Management to do more than they really should, to help out. Especially as it is all in aid of a ‘good cause’.

In my current Foundation we have weathered a difficult few years, especially in terms of finance and cash-flow. The Board therefore did get much more closely involved in the management and running of the non-profit to use all the available skills to help ensure its future and navigate through the crisis.

Now however, with more financial stability, and celebrating 30 years of existence, we again need to step back and no longer be an extension of the management team.

Oversight is important and some distance is required to do this properly. One should not get so involved in stepping in that it is no longer possible to remain objective and speak up when required.

Which after all is why my new Board has been discussing their future role. Hands on, not hands in.

 

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