Nonprofit Boards and
Governance Review
Orienting Board Members
to their Responsibilities for Strategic Thinking
(Part 4 of a 5 part series)
By Terrie Temkin,
Ph.D.
NonProfit Management Solutions, Inc.
Part 4 of
How To Build A Strategic Thinking Board
Those who have been following this series
know that a strategic thinking board is essential
in today's environment. However, such boards
do not just appear. An organization must ensure
that its bylaws promote strategic thinking
and that it recruits people with the capacity
for thinking strategically. However, I have
seen some of the most brilliant strategists
reduced to yes-men and women because of an
organization's culture. The orientation is
one of the first places that an organization
has the opportunity to officially stress its
need and desire for strategic thinking.
Traditionally, board members are introduced
to an organization's mission in an orientation.
This remains essential. They will be hard pressed
to think strategically if they do not know
or do not buy into the raison d'etre of the
organization because it provides the primary
screen through which all decisions must be
filtered. No activity -- even the pursuit of
a grant -- should be adopted if it doesn't
fit the organization's mission. The same is
true of vision, values, goals and the rarely
considered but critical Duty of Care.
Vision
Vision refers to how you expect the community
to look --how you expect it to be better --
once the organization has achieved its mission.
It must be widely shared. Think how easy it
becomes to make strategic decisions if everyone
responsible for making the decisions has the
same picture of this desired future in his/her
head.
Unfortunately, most board members don't envision
the same future even when an organization has
a succinct and carefully crafted vision statement
that each can spout. Why? Words can be -- and
therefore will be -- interpreted in many different
ways. If you want to create a strategically
thinking board take the time to have everyone
describe -- I like to have them draw -- his
or her interpretation. Then, work to merge
the pictures until you have everyone operating
from the same image. One of my proteges uses
a computer program to meld these!
Values
Organizational
values, like vision, allow board members
to focus their
energies in a
unified, strategic way. Drawn up to specifically
speak to your organization's responsibilities
and its philosophy regarding clients and the
community -- these are not the generic, "We
shall be honest and have integrity in our dealings." --
they serve as guiding principles for all decisions.
For
example, a values list for an organization
that deals with domestic
violence might include
the belief that every person deserves to return
to a safe environment at the end of the day,
every day. Let's say that the board was faced
with making two decisions. The first was between
building a program that builds self-sufficiency
so that people can make it on their own outside
the abusive relationship or building a program
that provides emergency shelter. The second
was between opening the program to men as well
as women and children or concentrating on women
and children. Regarding the first decision,
the board would have to lean in favor of investing
its resources in the self-sufficiency model
because the value statement includes "deserves
to return to a safe environment -- every day." Regarding
the second, it would have to plan for abused
men as well as abused women and children because
the value statement says "every person" has
a right to a safe environment.
The use of organizational values keeps personal
agendas at bay. It also ensures that generation
after generation of board members makes its
decisions strategically around the same core
principles.
Goals
I may be suggesting that traditional strategic
plans don't work, but I am not suggesting that
we throw the baby out with the bathwater. Goals
are still important. After all, Lewis Carroll's
Cheshire Cat taught us along with Alice that
if we don't know where we are going, any road
will take us there.
Each year the board should identify a limited
number of organizational goals (2 - 5) to be
accomplished during the year that will bring
the organization closer to the fulfillment
of its vision. At the same time, it should
identify a similar number of goals for which
the board itself should be responsible. The
board's goals should be related to the organizational
goals. The more specific each of these goals
is in terms of what is to be achieved and by
when, the more strategic the board can be in
its direction.
A discussion of accountability is also appropriate
at this time. Let people know how progress
toward these goals will be assessed, how people
will be held accountable for achieving or not
achieving them, and the consequences if the
goals are not achieved.
After the board has been oriented to mission,
vision, values and goals it should be oriented
to its legal duties: Duty of Care, Duty of
Loyalty, and Duty of Obedience (the last is
often incorporated in Duty of Loyalty). When
these are presented, it's helpful to emphasize
the organization's expectations under each
category. You should also share any tools or
techniques the organization uses to ensure
the board members' adherence to its legal responsibilities
and expectations, such as a board commitment
letter or forms for disclosing conflict of
interest. Given our subject of creating strategic
thinking boards, I will concentrate on the
Duty of Care in this article.
Duty of Care
As mentioned earlier, board members have a
legal responsibility to make informed decisions.
This means that they must understand context,
have sufficient data and thoroughly explore
the issues at hand. In order to accomplish
these three responsibilities -- which are all
critical to a strategically thinking board
-- there are a number of things board members
must be expected to do.
The first -- in no particular order -- is
to be able to read a financial statement. Statistically
very few board members feel comfortable doing
this, so one of the first things that might
be covered in an orientation is a segment on
understanding and interpreting financials.
The second is to become familiar with whatever
dashboard the organization uses. Each organization
should have a set of indicators that are presented
at each meeting that give board members an
instant read on the status of the organization,
much like a dashboard on a car gives a driver
an instantaneous idea of how fast he or she
is driving, whether the engine is running too
hot, or how much gas remains in the tank. Indicators
might include the number of clients served
in relationship to capacity, projections and
the previous month's figures or the relationship
between revenues and expenses. Being attuned
to such current indicators allows board members
to make strategic decisions for the future.
Third, board members must also be knowledgeable
about any decision-making screen that the organization
uses in addition to mission, vision, values
and goals. Sometimes called a decision tree,
this screen provides a list of criteria --
often weighted -- against which the board can
measure the options it comes up with. For instance,
an organization might determine that the cost
of an option is more of an influencer than
the time it might take or the staffing it would
require. A list of criteria a board can use
to think more strategically was provided in
Part I of this article.
Fourth is to come to meetings prepared. This
means that board members have read any briefing
papers that were sent prior to the meeting
and called in with questions or requests for
additional information.
Fifth is to ask questions. Perhaps you might
give board members a cheat sheet with the types
of provocative questions that will stand them
well in a number of different situations. Some
sample questions are: What's driving our desire
to go in this direction? Are the drivers valid?
How will this decision impact our clients?
How will this impact our image in the community?
What are the downsides of this?
Also key to Duty of Care is the expectation
that board members will openly share their
knowledge, ideas and reservations, as well
as respect the knowledge, ideas and reservations
of others. Also, that they will engage in sufficient
dialog to feel comfortable hat they are in
fact reaching the best decision. This means
that they must have an expectation of confidentiality
-- that what is said in the boardroom will
stay in the boardroom. It also means that they
have to understand that meetings may run more
than the customary timeframe and that they
are expected to stay and hash out the resolutions.
Putting all these pieces together in the meeting
itself is the subject of Part 5, the last,
of this series. Stay tuned.
Editor's Note: Our thanks to Terrie Temkin
her contribution to Nonprofit Boards & Governance
Review. More information about Terrie
can be found at: http://charitychannel.com/resources/Detailed/600.html
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