Friday, June 17, 2011

Resourcing Board Governance: Be Careful What You Call Yourself

Nonprofit board members may be unpaid but they are NOT volunteers. As I work with nonprofit boards across the country, especially faith-based ministry boards, and reflect on my own experience on NP and ministry boards, I have learned that the typical board thinks poor. Because they think of themselves as "volunteers," everything (except perhaps the audit, which is often required)regarding their governance is done on the cheap. Little do they know how much they are costing the organization for which they are accountable. They are unwilling to invest in themselves to improve their own governance, even become excellent if they tried. They seem not to realize they are as much a legal component of the organization as the CEO's office, or the financial section. Not only that, they, collectively, are accountable for the organization. They are NOT volunteers as one normally thinks of volunteers. In fact, if they get it wrong, they can suffer consequences, meltdown, front page notoriety, fines, bankruptcy, etc. Their job is to lead the organization, but most boards do not know how to do that, and they do not know they do not know. So they lapse into reacting and asking questions as they review whatever has been put before them, typically financial reports. Governance is providing both direction and protection. To do that well does mean some investment. However, considering the vital role the board (should) play, the relatively small percentage of the organization's budget good governance costs pales compared to the importance a good board can bring in value to its organization.