Stanford Social Innovation Review

Yes, your board meetings should be open to the public. However, when discussing personnel matters or litigation, the board can go into executive session. The chair would then announce, in general, what was discussed and then resume the open meeting. The executive session should be included in the meeting agenda, and best practice is to give public notice of all board meetings. That can be accomplished on your web site. We run an announcement on our station.

As you grow, you'll find that governance becomes more formalized. It can be challenging to go from a "worker bee" board that's involved with both the singing part of things to the fiscal oversight, strategy and programmatic review that a board does. But the increased structure will serve you well in the long run.

It's very common to get an organization started, especially a small one, under an established nonprofit. You'll have to operate just like a nonprofit in order to not jeopardize the status of the umbrella one. It's important to be clear with the management and board of the host nonprofit what the relationship will be. It can range from full service support, including your office space, for a specified fee, to just being a fiscal agent for grants and donations. You might also agree on a specific period in which this arrangement will be in effect, perhaps a year or six months while your application for nonprofit status is being considered, you are forming you steering committee (which can morph into your board), and completing other tasks involved in starting a nonprofit.

It’s not very hard to obtain nonprofit status. You can do it at the federal or state level. There’s some desire to have one process for both, but I don’t believe that’s in place at this time. The process for state nonprofit status probably varies, but you should be able to google “nonprofit status” and your state and find out how to get the forms. I did it a few years ago for a statewide organization that I belong to, and it took me less than eight hours of work over a couple of months.

I have served on several regional and nationwide boards, but most of my experience has been with local ones. I think that there are some differences, but board recruiting and keeping your members engaged are pretty much the same at any level.

You will find strong board members in a couple of ways. The first way is to sift through people who are already passionate about your organization and have the appropriate skills. While you are in transition to being national, it will be very helpful to have some core members around whom you can build a national board. The second way is to identify people who have a passion about the issue your nonprofit addresses, and possess the skill set you need. You will want to use a number of methods for identifying these people—everything from asking your current stakeholders for suggestions, to looking at the websites of similar organizations to see who is on their boards, to looking at the leadership of the top firms in the sector you serve (for instance, we like to have several leaders from the technology sector on our public TV station’s board).

This talent scouting is something that you should do all of the time, keeping a file of prospective board members. Your partner in this work should be the nomination committee of the board. Coordinating the identifying and recruiting will probably be a staff function, but taking responsibility for recruiting a strong board as you transition is the board’s responsibility and one of the most important things they are doing as you grow. Get a weak board, and you’ll suffer for years before you can fix it. Get a strong one, and your organization is probably going to come out of the transition phase in great shape.

Before you recruit anyone, you should establish the criteria for the people you seek. We review our criteria annually as we seek our new slate of nominees, and alter it as the organization’s strategy and the environment in which we operate change. Four or five critical skills or abilities are probably enough. You measure each person under consideration, and develop a depth chart. Be aspirational in seeking people who have the potential to be board leaders; it is part of succession planning. I try to help our nomination committee recruit people who will be in the top third of effectiveness as board members. That way your board is always getting better. Once you have about twice as many potential board members as you need, start with cultivation efforts, whether that’s inviting the person to organizational events, sending materials, or using other ways to help them become more familiar with what you do. This can be a short period, like several months to a year or more. Then we have the person with the strongest relationship make the ask. Usually, as the CEO, I pair up with the board member or other person who is making the invitation. We invite them to our station to show them what we do. We also create a briefing book which has board member duties, strategic plan, expectations for financial support, annual report, by-laws, audited financials and board meeting dates. We talk about the interest of the potential board member in the work we do, trying to probe the passion level, learn about nonprofit board experience that our background checks haven’t turned up, and go over the briefing book materials, which they can review at their leisure. The person with the relationship makes the invitation.

I would suggest that you look at the books about board development and pick one that you like, share it with others in management of your organization, and with the leadership of your board. You may also want to seek out organizations that have gone from local or regional to national, and have some peer to peer conversations. You could also search on the internet for people who are writing about this issue.

My own experiences lead me to believe that it's important that you are phsyically together several times a year, and that you work hard as the national board takes shape to do some teambuilding work to get to know and trust each other. When you have that in place, you can work electronically. If you don’t do that, I’ve seen boards limp along without coming together as a group, and not much gets accomplished. The board leadership and the senior managers also need to be willing and budget for travel to connect with the board members where they live. I try to see our own board members quarterly in their communities, and that strengthens our relationships for the work we do on behalf of our organization. We have e-mails that go out with weekly updates about our work product—which is television programming and outreach—but I also drop them an e-mail about halfway between board meetings to let them know what is going on. When you start doing some of these things regularly, I think you’ll be comfortable with the board, and the nervousness will go away.

The board's responsibility is to hire the CEO, support the CEO, and if necessary, fire the CEO. It's up to the CEO to operate the organization, which includes evaluating the senior managers. It would be wise for the CEO to seek feedback from board members who work closely with particular senior managers. But the board wouldn't evaluate senior staff directly.

At the minimum, the board leadership should evaluate the CEO annually. I like to have some sort of formal check-in halfway through the year, too. At our organization, we link the staff reviews to accountability for the organization's progress toward goals, which helps underline the fact that that we derive our individual goals from the goals of the organization.

Boards approach the evaluatory process in a range of ways. Some have a committee on compensation and governance, which does the evaluation. At our place, the executive committee does it. Some do it as a committee of the whole. I think a smaller group can be more focused and frank in their assessment. But it is important to seek feedback from all of the board members.

There's nothing magical about an evaluation. In our organization, we have one form for managers and another for line workers. Both involve a self-evaluation, and the supervisor fills out a planning form, too. Each person describes the primary responsibilities, greatest achieivements in the evaluation period, areas for improvement in the next year, a handful of goals, and training that would be appropriate. We like to have at least two training opportunities that relate to job duties, and two that improve technical skills, since technology is impacting the workplace.

When I evaluate one of my senior managers, I ask for informal feedback from peers and that person's direct reports. (We do a formal 360 degree evaluation every three years for our senior managers.) We also do an annual staff survey in which every staff member comments on his/her department head in four categories, the division head, and me. So I have that feedback in hand for the evaluation. And, as I stated above, if the senior manager works closely with one or more board members, I'll ask for feedback. For instance, I'll ask the finance committee chair about the working relationship with the CFO.

So a good evaluation of a CEO examines the standard skills that you desire in a nonprofit leader (evaluation forms are pretty easy to find on the web or through HR service firms) and should include vision; ethics; communication, planning, evaluation, and other core skills; recognition of significant achievements; areas for improvement; whether training was completed; and individual goals for the year met. Ours is about three pages long, has check off boxes for ratings, and space for specific comments in each category. As for the goals, I believe there should be no more than six, and they should relate to the organization's goals. I draft mine, and the executive committee reviews them and usually adds a couple. They often include one or two relating to our nonprofit's financial performance, a couple about use of services we offer, and something which advances the organization strategically. I like to have a couple of stretch goals. All goals need to have a deadline for accomplishment and be quantifiable, that is, measured with a number. And the deadlines should be spread out. If all of your goals are supposed to be accomplished in the first quarter of the year, you're probably not thinking far enough ahead.

All of this is prelude to having a candid conversation with your CEO about how she/he is doing. All of us, whether you are a rookie or a veteran nonprofit leader like me, need a good evaluation process and candor from our supervisor(s). My feedback comes from the board chair, and I look forward to the conversation every year. We also do a half-year check-in with the board on the organization's progress toward its goals, and I review my own progress at that time, too. All staff members have the same half-year sit-down with their supervisor. By doing it formally twice a year, we avoid surprises at the year's end, and make sure we're all moving in the same direction to advance our nonprofit. A solid review process is one of the greatest ways a board can support a CEO. It takes time and must be a priority for all board members. But doing this well will pay dividends for your leadership and all of the people whom you serve.

It’s great that you’re thinking strategically about the knowledge and skills you want represented in your board members. So many nonprofits fall short of thinking about whom to recruit and end up with boards who are less useful in terms of meeting the organization’s goals. That said, you’ll find that life doesn’t quite provide candidates in the proportions that you lay out. And you need more than one attribute per board member. All should have a passion for the work your organization does. All should make financial support a priority, even the ones coming from constituencies. They may not be able to match the dollars of the average board member, but they need to be giving at a “sacrificial” level.

Your mission and your by-laws can serve as a guide for the categories. The mission should talk about what you’re doing and with whom you’re doing it. The by-laws will describe standing committees, so you’ll need people with specific skills to do a great job in the committee work. If you create standing committees on 1) oversight for the programs you provide, 2) development, 3) strategic planning, and 4) finance and governance, then you'll have good matches for the four categories you listed.

I’m not aware of a source that would help you define the categories. You might find some models in books about high-functioning boards. But you’re off to a pretty good start already, and I’d just go ahead and execute your concept. By the way, I tend to favor a few more board members with development skills and a few less in the other three categories. For most nonprofits, it’s challenging to raise funds, and if you’re going to have a little imbalance, better to have it in development than to have too many people with financial expertise (unless you’re broke and the board’s focus is on getting out of hock).

I think you have a legal question that’s also an ethical one, and poses practical problems as well. I would refer you to counsel who can advise on the legalities. My sense is that taking oneself out of decisions affecting the sibling might observe the letter of the law. But look at the problems it could create for staff members and the organization as a whole.

It’s tough enough that a major donor has a sibling in the management of the nonprofit. Questions could be raised about whether actions by the management person are affected by the donor’s desires, whether the siblings are exchanging information about the organization that’s not appropriate, and whether the situation is having a chilling affect on the rest of the staff. If the donor joins the board, it would only be more of an issue. And besides the actual conflict, there is the perception that something untoward could be happening.

That could compromise the organization’s effectiveness internally, but the bigger risk is the public's perception. Donors, the media, and people using the nonprofit’s services may lose confidence in it, even if the siblings and everyone else involved acts responsibly.

I don’t see an upside to this. While preventing him from joing the board may unnecessarily limit the donor’s opportunity to serve the nonprofit, it’s a small sacrifice compared to the problems it might cause.

I'm not in a position to judge whether your governance structure is sound. It may be what the founders wanted, and so they drafted the bylaws to reflect their desire. If you have concerns about the practical aspects, I suggest you consult an attorney with expertise in nonprofit law to see whether the bylaws are sound. If they are sound, then you are stuck with them, unless a number of the founders, as described in the bylaws, want to change them. Based on my experience, this is an unusual structure for nonprofit governance, as there will be challenges as the founders pass on, unless the bylaws address that problem as well.

I sometimes joke that board terms ought to be 18 months. It takes about a year for a volunteer board member to get up to speed, unless you have a really strong orientation program. The next year is usually pretty good, and then some board members seem to lose focus and tail off. The great ones have passion all the way through, but how many superstars are out there?

One year is definitely too short. There are some boards that are using one-year terms for first-time board members; if things go well, the person is invited to do two more. But my experience is that the first year is a learning curve for most folks. Two or three years seem to be the norm. A lot of boards allow members to serve two terms. Our by-laws allow two terms of three years, and then a third term after a year or more off the board. The record for hiatus may be held by a former board member of our nonprofit who was on for two terms in the late 70’s, and then came back for a third when he retired a few years ago. He was great the third time around.

I have to admit that I have never heard of a Chief Volunteer Officer. But there are lots of articles and books on the role of the board, and many have portions devoted to leading the board. I have used Jossey-Bass and BoardSource books before. I’d just do an online search and select a couple that look like they’re on target. Or go to your local nonprofit resource center if you have one and thumb through the materials they have. You could also network with some of the board chairs of the well-managed nonprofits in your area. A little coaching might be more useful than reading about board leadership.

The role of each board member should be clear from the time you recruit him or her. A summary of board responsibilities is part of our new board member orientation. One board member actually went so far as to summarize what in the by-laws is relevant to board member responsibilities. When a couple of the board members seemed to have forgotten their duties a few months ago, I pulled out the summary and attached it to the board packet for the next meeting, saying that there had been a question about duties and that they are spelled out in the document. It had a salutary effect.

In my experience, setting annual goals for the board as part of the organization’s goals is effective. Schedule time at your board meetings every three or six months to review progress toward goals. Last year we took another step and created annual goals for every committee. These are derived from the organization’s goals, and like all good goals, are quantifiable (can be easily measured) and time certain (have a deadline). We review committee goals halfway through the year and again at year’s end. You can also have each committee chair rate the committee members annually and share those ratings with the board leadership. We also put out a grid of board attendance each year.

You can also have individual annual goals for each board member. We take a portion of each annual retreat for the board members to state what they expect to do in terms of time, talent, and financial support in the upcoming year. And we give these planning sheets back to them at the end of the year, when each board member does a self-evaluation. Some boards have just one-year terms for new members, and then the board leadership discusses with the board member whether they want to and should continue for a two-year term. Others have a probationary period for the first year of a three-year term, and a check-in at the end of that first year.

If you have some or all of these steps in place and some members are still nodding off, then I’d suggest a survey like one our board recently took from a national organization that focuses on nonprofit boards. It asks questions about the primary areas of responsibility, testing to see if the board members know what is expected, and whether they were getting the information they need from staff. They also rate their own performance in each area. Fiscal oversight, strategic planning, the mission and fundraising are some of the items addressed in the survey. Then show the results to the entire board and have a frank discussion about the results. If that’s too painful for you or the board chair, hire a consultant to do the survey, interpret the results, and facilitate the discussion. By the way, the board leadership should be the ones enforcing the expectations, not you or the executive director. If that’s not happening, you have a leadership issue. Peer-to-peer works best in keeping the board functioning at a high level, just as it does in fundraising itself.

If it makes you feel any better, this same national firm studied my industry and concluded that boards in our sector generally tested low on fundraising. So you’re not alone in looking for something like No Doz to cure the problem.

I can recommend the BoardSource survey. I’ve taken it twice now, once as a board member of a regional planning organization, and last year as part of our organization’s board development process. It takes about 20 minutes to complete, but the questions are comprehensive, and you end up with a lot of good information that highlights the areas in which your board is functioning at a high level, and the areas that need attention. From the survey that our board took last fall, we’ve made a number of changes in how we plan and do the board’s work. We also found that in most areas we were following best practices. That's useful to know, too.

You raise several issues that I’ve recently heard discussed by board members and managers who are trying to increase the effectiveness of their boards. There is no magic number for the members of a nonprofit board. But when I was teaching nonprofit management, I looked into this question, and 8-14 seems to be the right range. At a meeting on board effectiveness this year, a BoardSource consultant cited a similar range--10-16 or so, I think. When you go above the teens, I think you’ll run into problems managing the board, and conducting meaningful discussions at meetings. In my experience, the executive committee ends up making all the decisions, while the board meetings are just window dressing.

There is one model in which I’ve seen large boards--for fundraising purposes. In those cases, the board doesn’t meet very often, the staff works closely with the members on fundraising, and the executive committee makes most of the decisions. I’m on two large boards right now. One is a chamber of commerce and the other is a university foundation. The real decision making comes at the executive committee level, and the board meetings involve mostly listening. They fail to take advantage of the expertise around the room.

As for conflicts of interest, best practice is to have a policy in place, and on an annual basis, have board members either declare conflicts or state that they have none. Conflicts are usually an issue when a board member is doing business with the organization, but they can include any situation in which the board member’s ability to make a decision in the best interest of the nonprofit is compromised because she or he could stand to benefit. Conflict of interest policies are fairly common and you might find a range of them via the internet or by contacting peer nonprofits. You could select one that fits your needs, or consult a lawyer who specializes in nonprofit boards.

If you actually are operating under a sunshine law, then there probably are requirements for public notification, or at least general practices to guide you. However, sunshine laws are generally aimed at government bodies, not nonprofits. If you’re attempting to honor the law's spirit rather than an actual law, here are some things you might do:

1. Communicate the meeting dates and times to stakeholder groups on a regular basis, generally a week or more before each meeting. This could be by newsletter, e-letter, on your Web site, or by other regular communications with those you serve, staff members, advisory boards, donors and/or others who have an interest in your nonprofit and the services it provides.

2. Put the commitment to have open meetings in your by-laws, and develop policies about public comment, including how long the public comment period will be, and how long each member of the public can speak. My experience is that few members of the public actually are interested in attending open board meetings. But when you have a “hot” topic, it is very helpful to have guidelines in place so all who attend are heard and treated fairly, and you are still able to get other business done as well.

3. After each board meeting, post a summary of your action items and significant reports on your website or places where stakeholders can easily view them so interested people can see what the board has been working on. The summary can include when and where the next meeting will be held, and you can state your policy on open meetings, too.

4. Public notice can be given through the media. Some Web sites and print media have calendars of events where your meetings can be posted. You could buy ads, but that’s pretty expensive and my experience is that the cost doesn’t match the increase in public participation.

Best practice is for nonprofit boards to have conflict of interest policies in place. The general thrust is that any time a board member has a relationship with the organization that could benefit him or her personally, the conflict has to be declared and the board (or leadership of the board) decides whether it is acceptable or not. pplying for a job with the organization while on the board is definitely within the realm of conflict. It’s also ethically wrong because it puts the board members making the decision in an unfair position. I’m not a fan of former board members going to work for nonprofits in general, but it happens more often than one might expect. There should at least be separation so the decision is made in an ethically sound way.

Generally, you need to reach a certain point in the size of your annual budget, or want to apply for a grant that requries the nonprofit undergo an annual audit. A million dollar budget might be a good milestone. Many firms that conduct audits have a nonprofit practice. Some have a nonprofit rate, too. I would suggest that you ask some of the larger nonprofits in your area for a recommendation.