Continuing my inquisitiveness in nonprofit boards from the previous blog, I have focused on the most important part of boards and governance, the essence of any board – “the composition of a board”. Board composition depends on the nature of the organization. It is generally influenced by the organization’s mission and vision, terms of office for directors, the size of the board, and most importantly, the board’s experience and skills.
I have come across so many articles, but something that struck me as not just insightful, but also very relatable, was “Spotting and Fixing Dysfunctional Nonprofit Boards“ by Alex Counts. After working with boards of different structures and nature in the nonprofit sector, my perception and analysis of an unsuccessful board exactly matched Alex Count’s observation of dysfunctional boards. I agree with Alex’s three categories: Rubber Stamp Board, Micromanaging Board, and Balkanized Board.
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“Rubber Stamp Board – This type of board approves whatever management proposes and often plays the role of cheerleader. These organizations tend to be run by charismatic chief executives who value their autonomy and assemble a board with the expectation that its members are compliant and mainly serve as “window dressing” to reassure external stakeholders. Micromanaging Board – This board takes on key management functions in addition to its proper governing role. The staff becomes disempowered and often passive (or passive-aggressive) in the face of repeated intrusions into what they rightfully expect would be their areas of authority. Balkanized Board – These boards consist of people who are concerned about only one part of the organization—often the program they support financially. They typically avoid trying to see how all the pieces of an organization fit together, leaving that task solely to the chief executive. The fragmentation can be dangerous when an organization’s revenues shrink, and priorities must be reevaluated quickly and holistically.” Spotting and Fixing Dysfunctional Nonprofit Boards by Alex Counts
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In this blog, I am using Alex Count’s categories – rubber stamp, micromanaging, balkanized – as the problems, and building my idea of creating a competency-based board as the solution. These boards can lead to board effectiveness and satisfaction. My idea of a competency-based board incorporates the various departments of a nonprofit organization, and is built around addressing each with the help of a competency-based leadership style.
The table below demonstrates the types of dysfunctional boards, the common problems that arise out of these flaws, and a high-level solution – which will be explained in length moving forward.
| Types | Problem | Solution |
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Rubber Stamp Board
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Board needs to show commitment and integrity towards the mission, goals, and vision of the organization
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Micromanaging Board
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Board’s role is to oversee. It needs to be planned and deliberate in its approach while monitoring the execution of strategies.
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Balkanized Board
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Board needs to be experienced and knowledgeable to be able to provide innovative insights and recommend unique solutions to challenges.
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Building the right board and increasing its effectiveness is directly related to the right amalgamation of skills and experience. It also requires an understanding of the board’s competencies, which includes individual capabilities and their alignment with the strategic direction of the organization.
ASAE Foundation’s “Body of Research on Governance” conducted a study to understand the selection practices of an efficient board. Their research included “Board Member Competencies and Selection: Helping Associations Build a Stronger Board”. According to this study, there are five core skill areas: group skills, interpersonal skills, personal leadership skills, technical skills, and personal attributes. Based on these five core skill areas, I have created a framework to support my idea by combining required board member competencies, various departments of a nonprofit organization, and related governance roles and responsibilities.
| Core Skills [The What] | Group | Interpersonal | Personal Leadership | Technical | Personal Attributes |
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Competency [The How] |
Strategic Leadership, Problem Solvers, Adaptable, Creative | Good Communication, Relationship Building | Strategic, Decision Making, Analytical | Industry Knowledge, Professional Experience | Time, Commitment, Integrity, Willingness, Passion |
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Area/ Department |
Governance, Leadership Development | Brand Development, Public Relation, Fundraising | Strategy Development, DEI | Finance and Risk Management, Human Resources | Applies to all the areas/ departments |
| Board Competencies | Governance Competencies | Technical Competencies | Behavioral Competencies | ||
| Problems Addressed | Micromanaging Board | Balkanized Board | Rubber Stamp Board | ||
To avoid micromanagement, the board needs to have members with governance competencies. Governance is a blend of policy, strategy, and operations that allow the leadership team to take action and make accountable decisions. Governance competencies include strategic leadership, which allows the board to plan from a governance perspective, and performance reviews of the Executive Director/CEO, which helps the c-suite to possess greater communication skills, adaptability, problem-solving ability, and compliance.
To deal with balkanization, the board needs to have members with technical competency, which is an individual’s technical skills and experience. This includes industry knowledge, professional experience, and experience in more technical areas like finance, risk management, strategic planning, risk management, etc. This will allow the board to be more inclusive of different parts of the organization in the oversight function without being overly dependent on the Executive Director/CEO.
Finally, to increase board engagement, behavioral competencies play a major role. These competencies are a board member’s attributes, like an ability to positively influence situations, commitment, passion, honesty & integrity, and high ethical standards. These personal attributes are critical to a boards’ successful operation.
The composition of a nonprofit board involves both structural and cultural issues. Its effectiveness depends on obtaining the right mix of competencies and experience. This varies significantly between organizations. That’s why it is crucial that, before the appointment or nomination of board members, senior management considers these competencies, evaluate what competencies and skills each incumbent director possesses, and considers the character of prospective directors and their fit with the current board culture.
Reference
- Brown, W. Mark, E. FASAE.CAE. Recruit the Right Board: Proven Processes for Selecting Critical Competencies. 2019.
- Counts, A. Spotting and Fixing Dysfunctional Nonprofit Boards. Stanford Social Innovation Review. October 2020. Available at https://ssir.org/articles/entry/spotting_and_fixing_dysfunctional_nonprofit_boards#bio-footer