The State of the Nation: Board Culture, Practices and Performance

Boards that describe themselves as being a collaborative team working toward a common goal are also more likely to report they specifically incorporate time for socializing among board members. That’s just one of the fascinating insights to be found in Leading with Intent: 2017 National Index of Nonprofit Board Practices published by BoardSource. The report and presents the results of a national survey of board chairs and executives from 1300 nonprofit organizations across the US and illuminates current trends and dynamics in board composition, practices, performance and culture. In this issue of iBossWell Updates, we’ll explore some of the high-level take-aways, including a few surprises, the report reveals.

1. Diversity: Everybody’s talking about it but not much change is occurring.
The survey response tells a surprising and disheartening story. The survey asked: How satisfied are you with the racial/ethnic diversity of your board?

• 65% of NP Executives reported being somewhat or extremely dissatisfied
• 39% of Board Chairs reported being somewhat or extremely dissatisfied

NP executives responding to the survey reported that board diversity is Important or Very Important when it comes to:

• Understanding the changing environment from a broader perspective (89% reporting)
• Developing creative new solutions to new problems (84% reporting)
• Understanding the client populations served by the organization (82% reporting)
• Planning effectively (77% reporting)
• Enhancing the organization’s standing with the general public.” (80% reporting)
• Increase fundraising or expand donor networks (72% reporting)

Yet when asked about priorities for board recruitment only 30% of ED/CEO’s and 28% of board chairs rated demographics as a high priority.

Clearly, there’s a disconnect between how NP executives and board leadership view the importance of diversity around the board table, and perhaps more disturbing, there’s a disconnect between what people are saying is important, and what they’re doing about it. That’s not just unfortunate, it could threaten the ability of a nonprofit organization to fulfill its mission. As the Leading with Intent report summarizes, “A board that is homogeneous in any way risks having blind spots that negatively impact its ability to make the best decisions and plans for the organization. The blind spots created by a lack of racial and ethnic diversity are particularly concerning, as they may result in strategies and plans that ineffectively address societal challenges and inequities, or even reinforce them.”

2.) Boards are more actively embracing their role as advocates and ambassadors, but they need guidance. Survey results tell us the majority of boards are successful at completing fundamental board work—understanding the mission and providing financial oversight. When it comes to advancing their external responsibilities, fundraising, advocacy, community building/outreach, NP executives and board chairs graded their boards as only a C to C+. When asked to identify the top areas for performance improvement for their boards both groups rated outreach/ambassadorship and fundraising in the top two areas for improvement.

A key take-away from the survey data is that the difference in how effectively boards advance these external facing roles is closely related to how well defined the process for advancing these efforts is, and how clearly the role and expectations for board member participation are outlined and communicated.

• Only 15% of nonprofits have a written protocol to guide how they will — and will not — engage in advocacy.
• When fundraising expectations are clearly articulated during board recruitment 52% of NP executives report their boards are actively engaged in fundraising.
• When fundraising expectations are not clearly articulated during recruitment, only 12% of NP executives report their boards are actively engaged.

Given the importance of fundraising for the vast majority of 501c3 organizations, and the growing importance of advocacy across the nonprofit sector, one immediate and high impact change board leaders can make is to ensure all board recruits understand how they will be asked to support these efforts before they actually commit to joining the board. Establishing an annual calendar/agenda for board development that includes skill building in all areas of fund development, from researching potential donors to making asks, and in advocacy, should be a high priority focus for organizations that want to increase the engagement and effectiveness of their boards.

3. The better a board understands your programs, the stronger their engagement, strategic thinking and external leadership will be. The results of the Leading with Intent survey show a strong correlation between a board’s knowledge of an organization’s programs and its overall performance in several critical areas: strategic thinking and planning, commitment and engagement, and fundraising and community outreach. Boards that have weak knowledge of an organization’s programs are less capable of thinking strategically, less able to balance short-term and long-term needs, less committed to the organization, and less engaged in governance, fundraising and outreach.

Boards cannot lead if they don’t understand an organization’s work. To ensure board members are well-prepared for that role, the report authors outlined several practices they urge all nonprofit organizations to embrace to build and advance the knowledge and skills of those sitting around their board tables:

• Comprehensive orientation for new board members including
• both an orientation to their role as a board member and to the organization and its work.
• Focused educational sessions or “Mission Moments” included as a regular feature of board meeting agendas to deepen understanding of the organization’s mission, programs, and impact.
• Opportunities for ongoing education and discussion about the board’s role and how best to leverage its full leadership potential.
• Board materials that provide context and background to support effective engagement, deliberation, and decision making without overwhelming members with unnecessary or irrelevant detail.

4.) Boards that assess their own performance regularly perform their core responsibilities more effectively. Boards that assess themselves regularly, and especially those that have assessed their performance within the past two years, were graded more highly by their NP leaders and board chairs across all areas of board performance. 58% of survey respondents reported their boards have conducted a formal self-assessment at some point—up significantly from the 23% who reported doing so in 1994—only 40% of respondents reported having done an assessment in the past two years. Those that assessed themselves within the past two years were rated more highly in several key categories of performance:

• Evaluating the chief executive.
• Adopting and following a strategic plan.
• Monitoring organizational performance and impact against strategic plan goals.
• Understanding board roles and responsibilities.

Board assessment is the starting point for understanding what is working well and identifying what needs improvement or what should be changed. Perhaps most importantly, a board assessment process provides valuable insight into topics for board development as well as into potential changes that may be needed to meeting structure, agenda, or reporting to enhance the engagement or effectiveness of the board.

5.) The board’s understanding of its roles and responsibilities, and the its ability to work as a collaborative team toward shared goals, are perceived as central to its ability to positively impact organizational performance. The survey shows a strong relationship between perceptions of the board’s impact and how NP executives and board chairs rate board performance in the areas of: thinking strategically as a board, adopting and following a strategic plan, and monitoring organizational performance and impact against goals or objectives in the plan. While more nonprofits report having written strategic plans, the survey reveals that transforming those strategies into action remains a challenge for many boards:

• 84% of organizations report they have a written strategic plan.
• 64% say their board is good at thinking strategically.
• Only 54% report their board is good at monitoring organizational performance against the strategic plan.
• Just 26% report that board meetings focus on strategy and policy versus operational issues.

The boards with the highest impact make strategy an ongoing board function. They regularly:

Explore what is happening in the organization’s operating environment.
• Establish performance/progress indicators as part of strategic and operational plans to help them track and understand what is working well and where expectations are not being met.
• Are attuned to feedback and use it to understand market/community changes and to support adjustments or adaptations in programs, services or operations to meet changing needs.

“Leading with Intent” presents a wealth of information as well as thought-provoking opportunities for reflection about board culture and practices. The report raises many of the questions and ideas the iBossWell team often helps clients wrestle with as part a strategic planning process or during board development work. The highest impact boards and organizations are the ones constantly searching for ways to improve their work, their practices, their thinking. In this report, BoardSource and the Leading with Intent team provide context for the current state and powerful food for thought about how to raise the bar in the future. To find the full report visit the Leading with Intent website.

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