The Flourishing Culture Podcast Series Building an Excellent Board of Directors June 13, Bob Andringa

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1 The Flourishing Culture Podcast Series Building an Excellent Board of Directors June 13, 2016 Bob Andringa Al Lopus: Hello, I m Al Lopus. Thanks for joining us today. What is the role of the board of directors when it comes to stewarding the health of a Christian nonprofit s employee culture? Does the board have a role in and responsibility for monitoring the health of the staff culture? Well, to help us with that question we look forward to a conversation with a leader who has literally written the book on the topic. In fact, the name of the book is Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board. Our guest is even better known as a respected leader in Christian higher education. He was the president of the Council for Christian Colleges and Universities for 12 years and had a significant impact on the governance in Christian higher ed. CCCU is an association of 175 distinctly Christian colleges and universities in 24 nations. Some would say he retired 10 years ago, but our guest says he was re-fired as he coaches nonprofit CEOs and their boards. Adding to his re-fired life, he has also founded a new organization called Network Life. This new organization is fueled by his passion that Christian students form communities in apartment complexes near secular universities to live and learn together as Christ followers. It s my pleasure today to introduce Bob Andringa. Bob, welcome to our podcast today. Bob Andringa: Hi, Al. It s an honor and a pleasure to dialogue with you about one of my favorite topics, really an important one for moving governance from good to great in as many ministries as we can. Al: Bob, tell us a little bit about yourself. What fuels your passion these days? Bob: Good question. My wife would say I have too many passions for my age, but one of my mentors, whom you knew, Ted Engstrom, former president of World Vision International, modeled staying involved learning, giving, sharing, serving, writing, and speaking until he died at age 90 a few years Best Christian Workplaces Institute 1

2 ago. Ted also frequently reminded me that the best phase of life would be after leaving a salaried position and being able to make choices around each of our sweet spots. So first, I m still learning a lot about walking with Jesus every day. That s always challenging and exciting. Among my priorities today, in addition to what you mentioned about encouraging ministries to form student discipleship groups, living together most often in apartment complexes, I m also focused on mentoring younger CEOs and networking other Christian consultants who help ministry boards so I can slow down for an exit ramp from travel and consulting. The last one I ll mention is we re working with a few large churches here in the Phoenix area to discover ways to unleash the amazing talent of people between the ages, roughly, of 55 and 80 who are looking for meaningful volunteer work, turning in success, perhaps, for significance, as Bob Buford might say. Al: I love Bob s book on halftime. You mentioned Ted Engstrom. Gosh, I remember not too many years ago, in Ted s last years, seeing you and Ted walking to a CLA conference on governance as you were teaching other leaders about governance. You were working together on that. You could tell he was struggling even at that time with a walker, but he wanted to be involved right up until the end. Bob: He stayed involved right up to the end. He was my first coauthor of a book called The Nonprofit Board Answer Book. I would not have gotten into writing books if it were not for Ted, so I owe a lot to him. Al: Bob, tell us where you have seen Christian nonprofit boards progress over your career. When you work with a board, what are you trying to accomplish? What problem are you typically trying to solve? Bob: Good question. I would say that almost every board of directors is dysfunctional in some areas of governance. Few recognize the many ways a great board contributes to building a great ministry. There are probably a hundred distinct best practices I try to change, teaching and coaching boards about those, depending on where they are in their developmental cycle. All of them do many things well, and they do some things not so well, and a lot of best practices, frankly, they ve never heard about. Always the greatest expressed need in the surveys I ve done is to clarify roles. Board members want to know, What is our role as a board vis-a-vis staff, and what is the role of the board in relating to the CEO? What s the role of the chair? What s the role of committees? What s the role of other staff besides the CEO in governance? So clarifying the roles, I think, is almost always the number-one concern. So I start with that, and then I move as far as they want to go in mapping out their roles in strategic planning, fund-raising, succession planning, evaluation, search, and many other topics. The general problem, I think, is a lack of focused engagement. Board members are busy. They have other lives. It s too easy for boards in ministry, particularly, to just ignore and to forgive members who don t show up, who don t read the material in advance, who don t participate. Best Christian Workplaces Institute 2

3 I think that s unfortunate. It s too easy for boards to rest on their oars and to let the CEO lead the board. That s unfortunate, because the board should be leading at the top strategic level and allowing the chair to manage the board, not the CEO. CEOs have their hands full running the organization. Al: That s great insight, Bob. I don t mind saying, as I look back, that I consider you one of the fathers of the Best Christian Workplaces Institute. In our early years, you were a great encourager and recommended us to the presidents of CCCU institutions. In fact, CCCU was certified as a Best Christian Workplace under your leadership. I know you continue to refer us to organizations you re working with. From your perspective, what value does our engagement survey offer to Christian nonprofits? Bob: Well, it offers honest, credible, timely feedback about staff, and that s particularly difficult for boards to get. It s dangerous for a board to make judgments about the health of their organization based on anecdotal hearsay or a chance conversation with a staff member. I think any board would be impressed and grateful if their CEO took the initiative to get outside expert assessments of staff morale, trust, attitudes, communications, all of the things you evaluate. I did use your staff survey while I was at the CCCU, and it was incredibly helpful. Actually, to be honest, as the CEO, some of the results were difficult for me to see. Like most CEOs, I overestimated the condition of our staff. But we made significant changes for the good as a result of the report and your consultation with us, Al. I wish I had learned the value of these surveys earlier in my career. Just in the last couple of years, I recall watching a video on your website of Bill Hybels, whose books on leadership are well known, and he was shocked at what your staff survey revealed about staff morale and trust at Willow Creek. His modeling humility and addressing his own issues and watching the score go up each of the several following years is what every CEO should take to heart and hope to do. So if there s any hesitation to take these things, my experience is that as hard as the first one might be to look at, it s such a great investment, a modest investment, in building a healthy organization. There s danger in leading without knowing the condition of those you lead. So thank you for bringing so much value to hundreds of ministries now who use your tools. I think having competent outside evaluators is a must, someone who has done it before and someone who understands the diversity among faith-based organizations so you can give them wisdom on how best to improve based on your knowledge of many other similar ministries. So it s win-win, Al, and I would encourage every board to encourage their CEOs, and if CEOs are listening, I'd say to take a hard look at this. It ll benefit you as CEO, it ll benefit the board to have a sense of the health of the organization, and staff will obviously benefit in many ways as well. Al: Thanks, Bob. You mentioned the Bill Hybels example. I was just on conference with Willow again, and they ll be surveying this summer, as they do every year. I think this is the eighth year in a row. They re really taking this seriously. They look at it as their best practice. You re right. Bill Hybels is the real deal, as I describe it, because of what he was willing to learn from the survey. As the video shows, as he described at the summit in front of 100,000 people, it was hard medicine to take at first, but the benefits are outstanding. Best Christian Workplaces Institute 3

4 Bob, you ve said that great organizations have great boards. As you ve worked with them and had experience with various boards, what are some of the characteristics you see of great boards? Bob: Well, several come to mind. Great boards understand they have one agent, the CEO. They don t try to supervise, evaluate, other staff beyond their CEO. They understand there s a big difference between leading at a policy level and micromanaging or, for sure, just being a rubber stamp board. They really do understand governance and its partnership with management. Great boards are very deliberate in getting the right people on the board and into the key roles. They don t just ask, Who do you know who might want to serve on the board? They define where the board should be in the next few years, what it should look like, and they re very intentional about finding the people they define in advance. Great boards have a great chairperson who s willing and able to manage the board and let the CEO manage the organization. I think the board chair typically spends three times as many clock hours in that role as the typical board member, so we need chairs who really have the time as well as the talent to lead the board. Great boards ask the tough questions, and they don t delay in taking action when the data shows a decision is needed. That s a problem with ministries. It s kind of, We ll pray about it and the Lord will provide, or The Lord will give us direction, when in most of the board members businesses they would be much quicker to recognize, as Jim Collins says, the brutal facts and take action. Then, obviously, great faith-based nonprofits know that God is faithful, and they do seek through prayer and invite his leading on all matters before them. You want an organization, obviously, that has great integrity and honors God in everything they do, including governance. Al: Those are six great points, Bob. One agent, policy focus, having great people in the right role, having a great chair, being able to ask tough questions and take action. Yes, somehow we get into these board meetings and we re being polite and not asking the tough questions. Then keeping God at the center of the work in Christian organizations is always a challenge. One of the things I know you ve done a lot of work in is having a written board policy manual. What are some examples of policies that would apply to creating a healthy organizational culture, specifically? Bob: Well, I m a big fan of the board policy manual, shorthand BPM. It contains in one written document of maybe 15 to 20 pages everything a board must address at the level of policy, all in one place, not hidden over the years in a lot of minutes. It s the one voice, you could say, of governance, and it s reviewed and improved every meeting, so it s a living document. In my view, having a BPM that s reviewed several times a year and updated based on monitoring data that s defined in the BPM is the single best decision a board can make to operate with one voice in this written document. In the document, there are literally dozens of good practices that are tailor-made to that specific organization. Best Christian Workplaces Institute 4

5 The policies generally cover the mission, vision, values, and goals. They cover the policies of how the board itself functions and its committees. It has policies related to how the board relates to the CEO and staff, and then it writes what I call parameters around the major functions of the organization, finance and programs and fund-raising and so forth. So a good BPM covers everything a board has to address itself to in governance, and it s all in 20 pages normally. Al: All in one place. I ve worked with you on a board where a BPM has been in place, and it just makes everything clear. You don t spend and waste a lot of time on those issues. You stay focused on the strategy. Well, I bet you have many good stories of boards that are exceptional in your mind. What makes them so good? Bob: Well, I ve interacted with several hundred boards in their meetings, and probably the first impression I get in watching them is they have learned how to bring exceptional individuals and diversity of individuals in terms of talent and experience, mature faith. They have a passion for the ministry. They re not on there just for the honor of it, and they bring their experience relative to the mission to each committee and to the board. When you see a group of people like that, it s very impressive. They got that way because they decided Again with Jim Collins. Get the right people on the bus and in the right seats. They decided that s important, so they re exceptional in that. That comes to mind. They select a good chair. It s like the CEO who s only half effective. Sometimes you do see a chair who has been on the longest or maybe the major donor or maybe just someone everybody loves who really is not leading the board. In any group of volunteers The average-size board today is 15. It s been going down in recent years. Any group of 15 or more needs a strong leader, and that should be the chair, not the CEO. So that s another element of exceptional governance. Then they know how to guide the staff in giving them reports that are written for the board, not for staff, and they learn to do their homework between the meetings so they have adequate time for discussion during the meetings. Too many board meetings are filled with staff reports on things they send out in writing a couple weeks in advance, and they just sort of regurgitate that, leaving very little time for good discussion. Then exceptional boards set clear goals at the 10,000-foot level, I say. They expect and monitor good execution. Then exceptional boards know what success looks like in defining success in advance and then asking for those data points that tell them whether their decisions were wise a year or two ago or not, and if they aren t, exceptional boards make timely changes. I think exceptional boards are good fiduciaries of resources, and that s both human and financial, so the ministry is not always preoccupied with financial constraints. As you know, probably ever since the recession a few years ago, too many boards spend all their time in frustration and in not knowing what to do to get their budget in order. Some would say the most important goal of exceptional boards is to retain a CEO who has been uniquely prepared by God for their particular ministry at their point in time. When you get a good board working with a great CEO, it s just marvelous to watch. It's very impressive. Can I think of one board that scores a 10 on all of those variables? Probably not. But there Best Christian Workplaces Institute 5

6 are exceptional boards among the 400 or so with whom I ve had the privilege of working. I won't name them, but just thinking about this I can almost see them written on the wall. There are some exceptional boards, and we want all of the ministries to get there if possible. Al: You mentioned fiduciaries of human resources and financial resources. There are leaders and boards that say people are our most important assets, yet in Christian organizations I don t see very many boards that have a people committee or a human resources committee. Of course, every board has a finance committee or a resource development committee. I serve on the board of directors of a billion-dollar healthcare organization and chair the compensation and benefits committee, which is, in effect, our human resource committee. Is there room in Christian nonprofits to consider having a human resource committee on their board? Bob: Well, not many ministries are billion-dollar organizations like the one you re on. Yes, three or four boards come to mind that have that committee. Generally, they re going to be ministries of 100 to 1,000 staff, where they re looking at fair, across-the-board compensation systems. They re looking at evaluation systems for staff. They re using outside data to be sure that they re competitive. A good committee for a large ministry does that. In the smaller ministries, it s important for the board to be very clear to their CEO on what the board expects in the way of human resources. How do you do recruiting? How do you nurture and train staff you hire? How do you evaluate and compensate the staff within broad board guidelines? Today you would have to ask, is the staff diverse enough and are you helping bring unity to a staff that s getting more and more diverse? So whether it s through a committee or through clear expectations for the CEO, yes, people are the most important resource, but as you know, Al, salaries are generally low in ministries. Sometimes you hire people only because they re willing to work for $30,000 when they should be paid more. Often in ministries you downsized in recent years, so you re asking one person to fill maybe two jobs. In the budgeting, here s where a board can be important. You can allocate money for staff development and training. It s just amazing how little (maybe less than half of 1 percent) payroll is in many budgets in ministry. If they re our most important assets, then we have to invest in allowing staff to grow and learn and develop and mature. I would have to say that less than half of the ministries I ve worked with take that seriously. Al: I find that as the staff grows and as leaders grow, that s how the ministry grows. If there isn t focus on staff development and training, the ministry will plateau and become more irrelevant over time. Hey, one last question, Bob. As you know, we encourage boards to conduct a 360 review of their CEO on a regular basis. Is this something you would encourage, and why would you do that? Bob: Generally, Al, I m an advocate of 360s, but only if well done. What do I mean by well done? I ve seen boards look around the table and ask, Who would like to be the facilitator of a 360 on our CEO? So they go about it. They ve never done it. Relationships are already known. There s a culture there. So this person, thinking they re doing the right thing, might open Pandora s box. Staff start complaining, Best Christian Workplaces Institute 6

7 and boards start interfering, trying to be the ombudsman in solving staff problems that show up in a 360. It s well done when it s using an outside resource or a consultant, like Best Christian Workplaces Institute. I think it s almost essential in most cases that the board engage someone outside to do this. I think it s good for CEOs to even ask for it. I've read where about 25 percent of nonprofit CEOs are terminated by their boards, either asked to resign or outright being fired. I ve been part of that, consulting and hearing, getting s and phone calls from CEOs who were surprised that they were terminated. I say, Well, when was your last good evaluation? There s a pause, and they say, Well, I really haven t had one in several years. It s important to have honest feedback to the CEO so they can be aligned with their board in how things are going, where things should be heading, and they re on the same page, and 360s do that well. So I applaud you for doing that. In fact, as I ve thought about that, Al, I think we should think about having 360s for boards. We should think about giving the board anonymous input and then sort of hold up a mirror to them and say, This is what you have said about one another and about your board. I think that could be a great contribution. Al: That s a good idea, Bob. I appreciate that. Bob, thanks for being with us today. I certainly have enjoyed the time we ve had and what we ve learned. You ve really communicated the challenge, that there are many boards that are in some degree of dysfunction or disarray and how important it is to have clear goals and clear roles for the CEO, the chair, the committees; to have the people on the board with the experience they need, with a clear strong vital faith; to get the right people in the right seats, the importance of the chair and good work in between board meetings, and clear goals. That s oftentimes missing. This has been very helpful. Bob, give us one final thought you d like to leave with ministry leaders about their boards. Bob: Let me say to the board leaders, your ministry cannot exceed the level of excellence modeled by the board in fulfilling its governance role, so take governance seriously. It s not rocket science, but there are proven principles and practices that can be learned and implemented by thoughtful people. CEOs, your greatest legacy could be leaving behind a strong board that knows how to govern and not mess with management. You need to be in partnership with your board and not in competition with it to have a great ministry. Al: Thanks, Bob, for sharing your wisdom, insights, and stories, and thank you for extending your ministry to the leaders who are listening to this and benefiting from all you ve shared with us today. Bob: My pleasure, Al. The Institute is a great partner to hundreds of ministries, and those boards benefit from your work, not just their staff. I thank you. Al: Thank you, Bob. If you ve enjoyed today s episode, you can find a transcript at blog.bcwinstitute.org. We d love to hear about your feedback. Please take a minute and leave a comment on our blog post or reach out on social media (@BCWInstitute). Also, do us a favor before Best Christian Workplaces Institute 7

8 you go. Would you please click over to itunes to rate this program? It makes a difference for getting this material into the hands of the right people, and we would be so grateful. Let s remember your leadership is a gift. Let s work together to be sure Christian organizations set the standard as the best, most effective places to work in the world. We ll see you next time at the Flourishing Culture Podcast. Best Christian Workplaces Institute 8