Board Roles and Responsibilities
When I work with boards, their challenge often lies in knowing their roles and responsibilities and what remains the purview of the chief executive – whether that person holds the title of CEO, executive director, or president. I find that organizations invest precious little time educating their board members about their roles and responsibilities, let alone educating their chief executive. No wonder many do not know who should do what!
Simply put, the board has three main roles: set the organization’s direction, ensure sufficient resources, and provide oversight. But what do those mean?
Setting the organization’s direction simply means that the board retains responsibility for the overarching framework under which the organization operates. Philosophically, this means that the board develops (and confirms and edits) the organization’s mission and vision statements and assures that all its programs emanate from this mission and move the organization toward its vision. However, they cannot and should not set the mission and vision in a vacuum; success requires close collaboration and coordination with staff and a high degree of knowledge of the organization and its sector – something else I see sorely lacking in many boards.
Strategically, the board sets the organization’s direction by working with the staff to develop the tactic, objectives, and action steps required to achieve the organization’s vision. Commonly, this responsibility gets summarized as the board retaining overall responsibility to develop the organization’s strategic plan or strategic direction, again in close consultation and collaboration with staff. I firmly believe that change should happen with people not to them. This means that if the board runs off on a retreat and returns with a strategic plan that they hand the staff to implement, it will not only likely have significant errors, but staff will have no buy-in or incentive to work hard to achieve its goals and milestones.
Ensuring sufficient resources means that the organization has (1) a capable leader, (2) adequate funds, and (3) a good reputation.
The capable leader means that the board hires, fires, and regularly evaluates the work of the chief executive. Many boards I see understand the hiring and firing part but fail to regularly evaluate their chief executive. Those evaluations should look at all aspects of his or her job: work with the board, staff, finances, community, etc. Often effectively gathering that data means interviewing or surveying different constituents and an objective review of organizational data.
Adequate funds means that board members contribute financially to the organization, work with staff to develop the fund development plans and support those plans as they can, develop investment and other financial policies, and closely and carefully monitor the financial health of the organization. It also means assuring sufficient investment in the finance development functions of the organization. As it relates to fund development, I prefer that board set the standard that members include this charity as one of their top three in terms of donations rather than requiring a set dollar amount which feels too much like “pay to play” to me. It also leaves some very capable board members off the roster if they do not have the financial means to pay.
Assuring that the organization has a good reputation comes partly in the oversight role outlined next, but also by working with staff to project a positive public image of the organization. Some of this comes from assuring adequate resources for the communication and marketing functions of the organization – again something that often gets relegated to the back burner. They too should share information about the organization within their circles, and while never lying, project that positive image. Within the board room, you want open, honest, and vigorous debate, discussion, and disagreement, but the board should emerge unified around whatever final decision results. Any dirty laundry should stay behind closed doors.
Perhaps the most important responsibility of the board comes in its oversight of the organization. If you notice that when a nonprofit suffers a significant scandal, often the board chair resigns along with the chief executive and anyone else found culpable. Why? Because for that scandal to occur, the board failed in its oversight role. Part of oversight comes in understanding and following their roles and responsibilities. It also means that the board holds themselves and each other accountable for its actions through regular evaluations of the board and board members (does your board do this?) and calling out damaging behaviors of board members or the board. Evaluating and holding the CEO accountable also falls under this umbrella as does monitoring and evaluating programs. Again, this occurs with staff, but the board should not rely solely on the evaluations of the staff who have a vested interest to demonstrate the value of their programs and hide any problems, especially those that come from mis- mal- or nonfeasance. Having someone knowledgeable of the types of programs that the organization provides has real value here as they can call “BS” or ask probing questions if things do not seem right.
Finally, and perhaps most importantly, the board provides financial and risk management oversight to assure that no criminal or unethical behavior occurs with the finances and that the organization has adequate protection against loss, physically and financially. Closely related, the board provides legal and moral oversight of the organization. As noted in the last blog post about the board’s duties, the board has a duty of obedience which means that they need to know, understand, and assure that the organization adheres to its legal responsibilities.
One last caveat as it relates to these roles and responsibilities. The board needs to retain a 20,000-foot view of the organization and not micromanage. For example, financial oversight means having the policies and procedures in place to minimize the chances of and catch any financial mismanagement. It does not mean that the board needs to scrutinize or approve every purchase. The treasurer gets empowered to conduct a deeper dive into the financials as outlined in your policies, but the whole board does not need to waste time at a board meeting on this level of detail.
Anything not specifically allocated to the board becomes the responsibility of staff through the chief executive.
How does your board stack up? Do they stay in their lane when it comes to their roles and responsibilities? Do they fulfill each of these responsibilities sufficiently to assure the health and success of your organization? If not, how can your board improve?