Staffing (Size, Joining, Recruiting, Informing, Communicating, Rewarding, Removing)
One of the most important aspects of Board operations is Board staffing. Just like the careful staffing that is usually done with employees, Board members should be carefully selected, trained and evaluated, as well. In for-profits, Board members and leaders must appreciate the strong value that Boards can bring, rather than tolerating Boards as if they are some necessary evil to be avoided at all costs. In nonprofits, Board members and leaders should not approach recruitment and selection as if they are somehow lucky just to get Board members who will show up at Board meetings. Board members and leaders in those organizations must act as if they deserve a very dedicated and participative Board -- that attitude alone can make a huge difference in achieving highly effective Boards.
There are different perspectives on staffing. Some people believe that Boards should be staffed primarily with the expertise needed to establish and achieve current strategic goals (this is functional staffing). Others believe that staffing should also achieve a wide diversity of values and perspectives among members on the Board (diversification staffing). In nonprofits, members are also sought who have strong passion for the mission (passion-driven staffing). We're learning, though, that passion alone is not enough -- Board members also must have the time and energy to actively participate in the Board. Yet another pespective is to get members who represent the major constituents of the organization (representative staffing).
Ironically, many people perceive for-profit Boards as being more established and effective. Yet nonprofit Boards very often have highly involved members who take a very strong role in establishing strategic plans and in ensuring that those plans are achieved. Board members of for-profit and nonprofit organizations have much to learn from each other.
Establishing a system
Establishing and maintaining a board information system is the joint responsibility of the board chairperson, board members, the chief executive, and staff members who work with the board. The board should discuss
• what information it needs to do its job
• how often it wants this information
• in what form it needs the information
Given this board feedback, the staff can establish the content, format, and frequency of information they will provide the board.
Characteristics of good board information
Barry S. Bader, a consultant and author specializing in hospital governance, identifies seven guidelines for developing effective board information:
1. CONCISE
Is the information communicated as quickly or as briefly as possible?
2. MEANINGFUL
Is the information presented in relationship to a significant factor, such as a goal set by the board, past performance, or comparative data?
3. TIMELY
Is the information relevant to the current agenda?
4. RELEVANT TO RESPONSIBILITIES
Does the information help the board or board committee discharge its responsibilities?
5. BEST AVAILABLE
Is the information the best available indicator of the situation or condition being described? Can better information be provided?
6. CONTEXT
Is it clear why this information is important?
7. GRAPHIC PRESENTATION
Could the information be presented better graphically than in words?
Basic ingredients of a board information system
Every board must decide for itself exactly what information it needs. For most organizations, however, the following checklist is a starting point.
At least two weeks before each board meeting:
• Agenda
• Information about issues for discussion, when appropriate
• Financial information
• Committee reports
At least two weeks before the board meeting at which it is discussed:
• Annual budget
• Audit report
• Strategic plan
After each board meeting:
• Minutes
• Notice of next meeting
Monthly:
• Financial report
• Significant published articles about the organization
Quarterly:
• Financial report
Regularly, when appropriate:
• Memo from chief executive summarizing current activities, accomplishments, and needs
• Updated material for board handbook
• Advance copies of publications, brochures, or promotional material
• Annual report
How do we become a nonprofit organization?
Forming a Nonprofit Organization: A Checklist
Every nonprofit organization must have a carefully developed structure and operating procedures in order to be effective at fulfilling its purpose. Good governance starts with helping the organization begin on a sound legal and financial footing in compliance with the numerous federal, state, and local requirements affecting nonprofits.
• Determine the purpose of the organization. Every organization should have a written statement that expresses its reason for being. Resources: Board members, potential clients and constituents.
• Form a board of directors. The initial board will help translate the ideas behind the organization into reality through planning and fund-raising. As the organization matures, the nature and composition of its board will also change.
• File articles of incorporation. Not all nonprofits are incorporated. For those that do wish to incorporate, the requirements for forming and operating a nonprofit corporation are governed by state law. Resources: Your secretary of state or state attorney general's office.
• Draft bylaws. Bylaws — the operating rules of the organization--should be drafted and approved by the board early in the organization's development. Resources: An attorney experienced in nonprofit law.
• Develop a strategic plan. The strategic planning process helps you express a vision of the organization's potential. Outline the steps necessary to work toward that potential, and determine the staffing needed to implement the plan. Establish program and operational priorities for at least one year. Resources: Board members; planning and management consultant.
• Develop a budget and resource development plan. Financial oversight and resource development (e.g., fundraising, earned income, and membership) are critical board responsibilities. The resources needed to carry out the strategic plan must be described in a budget and financial plan. Resources: financial consultant.
• Establish a record keeping system for the organization's official records. Corporate documents, board meeting minutes, financial reports, and other official records must be preserved for the life of the organization. Resources: Your secretary of state or state attorney general's office.
• Establish an accounting system. Responsible stewardship of the organization's finances requires the establishment of an accounting system that meets both current and anticipated needs. Resources: Certified public accountant experienced in nonprofit accounting.
• File for an Internal Revenue Service determination of federal tax exempt status. Nonprofit corporations with charitable, educational, scientific, religious, or cultural purposes have tax exempt status under section 501(c)(3) – or sometimes section 501(c)(4) – of the Internal Revenue Code. To apply for recognition of tax exempt status, obtain form 1023 (application) and publication 557 (detailed instructions) from the local Internal Revenue Service office. The application is an important legal document, so it is advisable to seek the assistance of an experienced attorney when preparing it. Resources: Your local IRS office, an attorney.
• File for state and local tax exemptions. In accordance with state, county, and municipal law, apply for exemption from income, sales, and property taxes. Resources: State, county, or municipal department of revenue.
• Meet the requirements of state, county, and municipal charitable solicitation laws. Many states and local jurisdictions regulate organizations that solicit funds within that state, county, or city. Usually compliance involves obtaining a permit or license and then filing an annual report and financial statement. Resources: state attorney general's office, state department of commerce, state or local department of revenue, or county or municipal clerk's office.
Other steps:
• Obtain an employer identification number from the IRS
• Register with the state unemployment insurance bureau
• Apply for a nonprofit mailing permit from the US Postal Service
• Obtain directors' and officers' liability insurance
What are the basic responsibilities of nonprofit boards?
Ten Basic Responsibilities of Nonprofit Boards
1. Determine the organization's mission and purpose. It is the board's responsibility to create and review a statement of mission and purpose that articulates the organization's goals, means, and primary constituents served.
2. Select the chief executive. Boards must reach consensus on the chief executive's responsibilities and undertake a careful search to find the most qualified individual for the position.
3. Provide proper financial oversight. The board must assist in developing the annual budget and ensuring that proper financial controls are in place.
4. Ensure adequate resources. One of the board's foremost responsibilities is to provide adequate resources for the organization to fulfill its mission.
5. Ensure legal and ethical integrity and maintain accountability. The board is ultimately responsible for ensuring adherence to legal standards and ethical norms.
6. Ensure effective organizational planning. Boards must actively participate in an overall planning process and assist in implementing and monitoring the plan's goals.
7. Recruit and orient new board members and assess board performance. All boards have a responsibility to articulate prerequisites for candidates, orient new members, and periodically and comprehensively evaluate its own performance.
8. Enhance the organization's public standing. The board should clearly articulate the organization's mission, accomplishments, and goals to the public and garner support from the community.
9. Determine, monitor, and strengthen the organization's programs and services. The board's responsibility is to determine which programs are consistent with the organization's mission and to monitor their effectiveness.
10. Support the chief executive and assess his or her performance. The board should ensure that the chief executive has the moral and professional support he or she needs to further the goals of the organization.
What are the legal responsibilities of nonprofit boards?
Under well-established principles of nonprofit corporation law, a board member must meet certain standards of conduct and attention in carrying out his or her responsibilities to the organization. Several states have statutes adopting some variation of these duties which would be used in court to determine whether a board member acted improperly. These standards are usually described as the duty of care, the duty of loyalty and the duty of obedience.
Duty of Care
The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the duty of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.
Duty of Loyalty
The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.
Duty of Obedience
The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.
What are the responsibilities of individual board members?
Individual Board Member Responsibilities
• Attend all board and committee meetings and functions, such as special events.
• Be informed about the organization's mission, services, policies, and programs.
• Review agenda and supporting materials prior to board and committee meetings.
• Serve on committees or task forces and offer to take on special assignments.
• Make a personal financial contribution to the organization.
• Inform others about the organization.
• Suggest possible nominees to the board who can make significant contributions to the work of the board and the organization
• Keep up-to-date on developments in the organization's field.
• Follow conflict of interest and confidentiality policies.
• Refrain from making special requests of the staff.
• Assist the board in carrying out its fiduciary responsibilities, such as reviewing the organization's annual financial statements.
Personal characteristics to consider
• Ability to: listen, analyze, think clearly and creatively, work well with people individually and in a group.
• Willing to: prepare for and attend board and committee meetings, ask questions, take responsibility and follow through on a given assignment, contribute personal and financial resources in a generous way according to circumstances, open doors in the community, evaluate oneself.
• Develop certain skills if you do not already possess them, such as to: cultivate and solicit funds, cultivate and recruit board members and other volunteers, read and understand financial statements, learn more about the substantive program area of the organization.
• Possess: honesty, sensitivity to and tolerance of differing views, a friendly, responsive, and patient approach, community-building skills, personal integrity, a developed sense of values, concern for your nonprofit's development, a sense of humor.
What is the job description of a board chair?
• Oversee board and executive committee meetings
• Serve as ex-officio member of all committees
• Work in partnership with the chief executive to make sure board resolutions are carried out
• Call special meetings if necessary
• Appoint all committee chairs and with the chief executive, recommend who will serve on committees
• Assist chief executive in preparing agenda for board meetings
• Assist chief executive in conducting new board member orientation
• Oversee searches for a new chief executive
• Coordinate chief executive's annual performance evaluation
• Work with the nominating committee to recruit new board members
• Act as an alternate spokesperson for the organization
• Periodically consult with board members on their roles and help them assess their performance
What is the job description of a board vice chair?
• Attend all board meetings
• Serve on the executive committee
• Carry out special assignments as requested by the board chair
• Understand the responsibilities of the board chair and be able to perform these duties in the chair's absence
• Participate as a vital part of the board leadership
What is the job description of a board secretary?
• Attend all board meetings
• Serve on the executive committee
• Maintain all board records and ensure their accuracy and safety
• Review board minutes
• Assume responsibilities of the chair in the absence of the board chair, chair-elect, and vice chair
• Provide notice of meetings of the board and/or of a committee when such notice is required
What is the job description of a board treasurer?
• Maintain knowledge of the organization and personal commitment to its goals and objectives
• Understand financial accounting for nonprofit organizations
• Serve as financial officer of the organization and as chairperson of the finance committee.
• Manage, with the finance committee, the board's review of and action related to the board's financial responsibilities.
• Work with the chief executive and the chief financial officer to ensure that appropriate financial reports are made available to the board on a timely basis.
• Assist the chief executive or the chief financial officer in preparing the annual budget and presenting the budget to the board for approval.
• Review the annual audit and answers board members' questions about the audit.
No comments:
Post a Comment