Book Preview #6: Building a Great Board of Directors

As mentioned in prior blog posts, I am sharing some of the 403 work and life lessons I derived during the process of writing Changing the World Without Losing Your Mind.  The book itself goes into seven dozen of these lessons in depth, through story-telling about how I came to have a particular insight and how I applied it.  As a free online resource, I am publishing a more complete list of the raw lessons.  If you send me evidence that you have bought the book, you can have the complete list on any particular topic, and if you send me evidence that you have bought at least three copies, I will send you all lessons on all topics. 

This section deals with building a great board of directors, which is covered in narrative form in chapter 12 in the book.  After a brief introduction below, I highlight 8 of my 22 most important insights about building a great board and nurturing it once you have it in the shape you want it.   

Let me begin with my depressing assessment: Most nonprofit boards are either entirely or somewhat dysfunctional.  There are surveys that back this up, including one by the Urban Institute in 2012 that spanned more than two thousand organizations.  But if you ask people who have served on boards or as senior staff of nonprofits, you will find rather quick confirmation of this sad state of affairs. 

A rather benign version of this dysfunction is where the board is supportive of the CEO but feels underutilized, and the CEO believes that while the board doesn’t interfere much, it also doesn’t add as much value as he or she would like (especially around fund-raising).  This level of dysfunction is usually stable until there is some crisis, where it can quickly devolve into finger-pointing, distrust, and mutual recrimination. 

Another relatively benign variation is where there is little open animosity, but rather spheres of influence where one or more board members cluster around certain areas (say, Latin American programs or a project they are funding) and don’t pay much attention to (and are certainly not conversant in or actively supportive of) any other part of the organization.  My mentor Susan Davis referred to this as a “balkanized” board, where few if any of the members feel a sense of ownership of the entire enterprise – leaving it to the CEO to be the lonely holder of the energy for the organization as a whole. 

The basic problem with most boards is that CEOs invest little in either the group as a whole or in the individual members (unless an individual board member also happens to be a major donor), while expecting more from them (individually and collectively) than they have a right to.  Board members then tend to respond to neglect from the CEO by becoming passive, delegating their authority to the chairperson, withdrawing, becoming argumentative when the opportunity presents itself, gossiping with like-minded board members, or engaging only in areas of interest (such as a program they like or are supporting financially, or a committee that makes them feel valued and valuable). 

For a non-profit organization to reach its full potential and to avoid most crises (and overcome those it can’t avoid), a high-performing board is a necessity.  I had this drilled into my head by some influential consultants and mentors, and my third board chair at Grameen Foundation who earned my trust and coaxed me into taking a leap of faith by investing heavily in my board.  The result was an outstanding group that I am prouder of with each passing year as I observe other boards.  I have since run another organization and served on the boards of several others, and their governing bodies span the gamut from almost entirely dysfunctional to reasonably good.  My top insights about building and maintain a high performing board are summarized in the remainder of this post.  

 1.      Make peace with the fact that there are few if any shortcuts in building a great board or governing body.  They are built one good member, one good meeting, and even one good agenda item at a time.

 2.      Most board members go through three phases: (1) orientation, (2) high engagement and contribution, and (3) coasting.  Your goal should be for them to get through orientation quickly (which will require effort), make the second period as long and productive as possible, and then ease them off the board when they hit the third phase, while making some modest effort to keep them involved as board alumni.

 3.      Encourage people on your board to speak their minds (even if their view is unpopular among other directors or in the minority), listen to others with an open mind, and to vote their consciences.  Contrary to the conventional wisdom, vigorous debate and occasional disagreement, tension and non-unanimous votes are generally not the signs of a dysfunctional board.  Rather, they are often signs of a high functioning board.  If people do not feel that they can be contrarian or vote for what they think is best, they may respond by disengaging or acting out.

4.      Give board members structured opportunities to show off to their peers how engaged they are in the organization and the quality of their ideas for improving it.  This will help spur friendly competition and accountability for being involved and contributing intellectually.

 5.      There are people who like you and your organization and will support it, but, if you probe enough, you will also discover that they don’t want to serve on your board even though you know they would be a great addition.  Rather than try to convince or manipulate them into joining the board, accept and respect their preferences and create a unique and customized way for them to serve that suits their engagement preferences.

 6.      The optimal size of a board and whether to have term limits are highly overrated issues.  Many small boards wish they were larger, without knowing the pitfalls, and many large boards wish they were smaller.  Likewise, many boards with term limits wish they didn’t, and vice versa.  Don’t get bogged down on these issues.    

 7.      If a member of a governing body reflexively and without serious consideration consistently either defends or attacks the CEO (or the entire staff) during meetings, he or she should be asked to step down (and possibly serve the organization in another way).  You want critical and independent thinkers who approach each issue that comes before them with curiosity and on the merits, rather than as a means to express loyalty (or disloyalty) to the leader.        

 8.      When someone leaves your board, make an effort to organize a farewell ceremony and gift that is calibrated to their length and quality of service, and their preferences.  Remember that sending someone off in a proper and respectful way is as much for those who stay on as for the person who is leaving.