How to Develop and Utilize an Effective Board of Directors

6/29/2021 - By Emily Lalas

A well-designed and utilized board of directors can greatly contribute to the success of a nonprofit entity. When recruiting directors, it is important to understand the purpose of the board, develop meaningful criteria for director selection and ensure that there are processes in place to fully utilize each director. The board’s primary responsibilities are to ensure that the organization is achieving its stated purpose, provide oversight and determine the strategic plan of the organization. When board members are not properly trained about their responsibilities or are not sufficiently engaged in carrying out their duties, the entire organization suffers. Here are five ways to better engage your board and ensure maximum utilization of your directors:

Selection Criteria. Since board positions are usually filled through networking, there is always a risk that directors will be comprised of the same types of professionals within the same demographic all sharing the same perspectives. This can quickly turn into a chronic case of falling into the “we’ve always done it this way” trap, which can cripple organizations from growing and evolving at a competitive pace. One way to combat this is by incorporating strong diversity goals and value-based director requirements into your bylaws. For example, an organization with the stated purpose of providing services to minority women may consider implementing a requirement that 3 out of 10 director positions must be filled by women of a racial minority. This ensures that the people the organization is striving to help are represented in the group that is making the decisions about how to best help them. Developing value-based director requirements involves relating the criteria used to select directors directly back to the values of the organization. For example, if the organization’s established values include acting with integrity, leadership through service and a commitment to diversity and inclusion, directors possessing certain skills or connections should not be selected unless it is first determined that they share, and actively live by, the organization’s established values. This will help verify that directors are a good fit for representing the organization well and effectively carrying out its mission.
Education. Although directors are usually selected due to their professional expertise, passion for the organization’s mission or valuable community connections, a surprising number of directors simply do not understand exactly what they have signed up for when agreeing to serve on a nonprofit’s board. Organizations should implement board member orientations to ensure that each director is informed of their responsibilities, expectations and the history of the organization. Additionally, organizations should ensure that open and honest information is being shared regarding current and future issues and needs that need to be addressed. This will help guarantee that each director understands their role and how to best devote their time to helping the organization.
Set clear expectations. One of the leading causes of disengaged board members is confusion regarding their specific role in their service to the organization. Setting clear expectations for each director is crucial to providing the support and dedication needed to help the organization succeed. For example, expectations regarding specific duties, fundraising and contribution requirements and participation in committees and fundraisers should ideally be discussed and communicated with potential directors prior to being voted in to confirm that all directors have a clear understanding of the commitment required to serve on the board.
Create a culture of participation and collaboration. Ideally, each director will have a unique skillset and a valuable perspective to bring to the organization. Yet so often, the primary responsibility for decision-making and strategic planning will lie with one to a few executive council members, with the remainder of the board defaulting to these decisions without asking questions to make sure that the decisions being made are truly the best decisions for the organization. A collaborative culture can be facilitated by specifying that the purpose of the executive council is to be the liaison for the full board. The executive council should not operate completely independent from the board. Term limits for directors and officers should be put in place to ensure that continued fresh perspectives are given a chance to lead and that no one person retains control of the organization for too long. Additionally, especially for larger boards, establishing committees with representatives to the executive council can help ensure that the collective expertise and opinions of the board are taken into consideration when making decisions. Committees should present recommendations to the board. All directors should be held accountable to provide feedback on committee recommendations, actively participate in meetings and should be solicited for input regarding any current organizational challenges.
Communicate and celebrate the wins. There are very few things more motivating than seeing the fruit of one’s labor. Celebration plays a large role in keeping directors engaged in the mission at hand. Whether it is through an annual dinner, interim reporting or some combination of the two, it is important to communicate program successes, accomplishments and significant milestones to the board and taking time to appreciate the success of everyone’s hard work. When people feel appreciated and see the difference they are making, the natural outcome is an increased desire to do more.

At the end of the day, most people agree to serve on a nonprofit board because they want to make a difference in their community. By investing the time and resources into developing policies and creating an engaging environment in the boardroom, organizations will be better equipped to utilize the strengths of their directors resulting in a greater capacity to further the organization’s mission and provide much needed services to our communities. That is the true win for everyone.

Questions?

If you have any questions about how to develop and better utilize your board of directors, don't hesitate to contact our Non-Profit team!

About the Author | Emily Lalas

Emily is a senior in the Audit & Assurance Services Department of Saltmarsh, Cleaveland & Gund. Her primary areas of expertise include providing audit and assurance services to the firm’s non-profit, construction, and governmental clients. Before joining Saltmarsh, Emily worked in bookkeeping and office administration for a regional law firm. Connect on LinkedIn!