Over the last number of years, Credence has received an increasing number of requests to support not-for-profit boards with board training. To prepare for the training, Credence asks boards what they are wrestling with so we can tailor our training accordingly. While each board faces unique challenges, there are several common questions that many boards wrestle with. This article reviews some of these questions, along with tips for addressing them.

There are three types of not-for-profit boards: advisory, operational (or ‘working boards’), and governance.

a. Advisory boards do not have on oversight or fiduciary responsibility over the organization. As the name suggests, they are advisory only, providing insight and support to the organization, often on an as needed basis.

b. Operational boards, also known as working boards, hold fiduciary responsibility for the organization while also doing the work of the organization. Operational boards are common during the startup phase of an organization.

c. Governance boards hold oversight and fiduciary responsibility for the organization but do not engage in the operations of the organization. For governance boards, there is a clear line – staff engage in operations; the board engages in governance; and the executive director acts as the bridge between staff and board. Governance boards are common in most not-for-profits that are no longer in the startup phase. Governance boards are the focus of this article.

One of the most significant struggles for governance boards is navigating the line between governance and operations.

This struggle commonly emerges because of board inexperience, organizational stress, and/or conflicted allegiances among board members (emerging from close relationships between board members and staff or between board members and organizational constituents). Even the most experienced board members can find themselves wrestling with this line.

Where is the line between governance and operations? Stated most simply, in governance boards, responsibility is divided in the following way:

Board

• hire and oversee Executive Director
• set and approve the organization’s vision, mission and strategic direction
• engage in strategic conversations
• provide financial oversight
• approve the budget
• cheerlead the organization

Executive Director

• hire and oversee staff
• build an effective staff team
• oversee action on the Board’s vision, mission and strategic direction
• engage in strategic conversations
• oversee the budget and financial health of the organization

Staff

• operationalize the Board’s vision, mission and strategic direction
• do the “work” of the organization
• prepare the budget
• manage financial details

What is clear on paper, however, is often less clear in reality. For example, if some constituents are unhappy with the organization’s direction and have a close relationship with some board members, these constituents can feel they have special access to the board, putting their friends who are on the board in an awkward situation. Or, when organizations are facing operational challenges, board members with ideas for how staff can address these challenges can be tempted to step into operations.

There are several strategies board members can employ to “stay in their lane.”

1. Regular Board Training: Board training can act like a reset button, helping boards remember and recommit to their governance responsibilities. Effective board training helps to demystify the board’s roles, helping board members to grasp more deeply what it means to fulfil their “duty of care” and abide by their “duty of loyalty”. Board training often includes a clear articulation of how boards are meant to relate to staff – especially when board members also volunteer for the organization. For some boards, it can be helpful to provide board members with training regarding how to read budgets and how to engage budget conversations as many board members are intimidated by budget conversations and do not know how to ask good and meaningful questions related to the budget.
2. Designated Governance Roles: It can be helpful to ask the board’s governance committee (or, in smaller boards, one or two key individuals) to hold the board accountable to the line between governance and operations. Rather than shutting down conversation, these individuals can raise the question: “Is this a governance or operations matter?” When boards are asked this question on a regular basis, members become accustomed to raising this question themselves.

3. Generative Conversation: Board members want to be useful. When boards are not given generative questions to wrestle with, they will slip into operations. When the topics under discussion involve “rubber stamping,” or are mundane to the degree that they don’t appear to be moving the organization forward, board members will focus on topics that are more engaging – operations. Board executives can ensure that each meeting includes a generative governance-oriented conversation where the wisdom and insight of board members is necessary for the organization to thrive.
4. Effective Board Chair: Effective board chairs play a pivotal role in helping their boards navigate the line between operations and governance. This includes: (a) ensuring meetings are led efficiently and effectively; (b) calling board members “back” when they stray into operations – whether during or between meetings; (c) building an effective agenda that helps board members keep governance responsibilities in focus; and (d) establishing a meaningful relationship with the ED – so the ED feels supported and is held appropriately accountable for their work.

Governance work is necessary and can be joyful! Maintaining a clear focus on the board’s role both makes the best use of board members’ time, and helps boards fulfill their governance duties – duties that are necessary for the organization to thrive.

Supporting Leaders. Engaging Teams. Transforming Organizations.

Looking to strengthen your Board’s effectiveness? Credence offers training to support governance, vision-setting, strong CEO/Executive Director relationships, and effective Board meetings. Connect with Credence for more information.