caws How To Be An Effective Board Member Bob McLean, CPA Executive Vice President

Transcription

1 caws How To Be An Effective Board Member Bob McLean, CPA Executive Vice President 1

2 The Agenda Welcome and introductions Benchmarking survey from 2014 Association structure Board roles and activities Legal duties and risks Responsibilities and relationships Officers, committees and meetings Risk management The Agenda Strategic plan Volunteer leaders Executive directors Consensus and knowledge based governance Success Q&A and discussion 2

3 Boards should not manage so much as provide a focus: to guide the long term goals of the organization John Carver 2014 Session Survey Results 3

4 Regional Board Service How long have you been on a regional board? One year 7% 26% Two years 36% 16% Three years 15% Four or more years I haven't begun my service yet Time Commitment Does your board service take more or less time than you anticipated? 69% 20% 11% More Less About what I About what I expected 4

5 Board Training Have you had any formal board training? 42% 58% Yes No Job Descriptions Do you have an up to date job description for your board position? 38% 62% Yes No 5

6 Job Descriptions Have you seen your executive director s job description? 29% 71% Yes No Nonprofit Board Service Have you ever served on a nonprofit board prior to your current/upcoming service? 33% 67% Yes No 6

7 Annual Goals Do you know your board's top two or three goals for the upcoming year? 33% 67% Yes No Strategic Plan Does your regional association have an up to date strategic plan (<2 years old)? 24% 76% Yes No 7

8 Budget Do you know the amount of money in your association's reserve account within 10%? 9% 91% Yes No How will you judge your success as a board member at the end of your term? 1. Regional goals were accomplished 2. Membership engagement 3. Membership growth 4. Membership & Board feedback 5. Invitation to serve again 8

9 What are your two or three biggest fears or trepidations in becoming a board member? 1. Lack of experience 2. Time 3. Making life changing decisions What one piece of advice would you give an incoming board member? 1. Be committed & passionate 2. Ask questions & speak up 3. Set reasonable expectations of yourself 4. There is a lot of personal satisfaction you gain out of board work 5. Set goals for yourself 6. Have fun! 9

10 What do you know now that you wish you had known prior to running for a board seat? 1. Nothing 2. The amount of time and work that would be involved 3. I would have benefited greatly from board training 4. How fulfilling it would be 5. History of the association 6. The dynamics of my regional board 7. How hard it is to get volunteers What has been your biggest surprise about board service? 1. The engagement of the board is inconsistent from board member to board member 2. How (well/poorly) the association is run 3. How fulfilling it would be & the personal relationships I have formed 4. None 5. The dynamics of the board drive how much gets done 6. The lack of volunteers 10

11 Successful Association Leadership The Association Community There are 1.4 million nonprofit organizations in the United dstatest The average number of board directors is 19 About 26 million people serve on boards Associations do a relatively poor job of training board members Most board training tends to be on the job 11

12 Typical Association Structure Articles of incorporation Bylaws Policies and procedures Strategic plan Business plan and budget Leadership and Management Management is doing things right Planning and budgeting Order and control Consistency and reliability Leadership is doing the rightthingsthings Vision and direction Motivation and inspiration 12

13 Effective Leadership Behaviors Integrity Courage Initiative Energy Optimism Perseverance Balance Ability to handle stress Effective Leadership Behaviors Integrity Courage Initiative Energy Optimism Perseverance Balance Ability to handle stress Self awareness Situational awareness 13

14 Self awareness Successful Leadership What are my strengths and weaknesses? What is my impact on the situation? How do I change this if it seems necessary? Successful Leadership Situational awareness The group with which I work The person or people to whom I am responsible The organization(s) in which I work The environment in which I operate The marketplace The legislative framework Available resources Finance, knowledge, ideas, people 14

15 It is hard to lead a cavalry charge if you think you look funny on a horse. Adlai Stevenson 10 Tenets of Association Leadership 1. The members want to belong to your regional 2. By far, the majority of people who will contribute to your success are volunteers 3. Management structures and styles used to run your business are not applicable to successfully leading a regional 4. The higher up you are in volunteer leadership, the less you have in common with your members 15

16 10 Tenets of Association Leadership 5. It is OK to set the bar high As long as your standards are understandable, well communicated and directly related to the mission of the regional 6. Trust members and staff to do the right thing assume good intent 7. Let the members drive build consensus at the member level 10 Tenets of Association Leadership 8. Promotional products suppliers and distributors ib t will exist without t your regional association Your role is to remove, not create, barriers to success There are other choices including doing nothing 16

17 10 Tenets of Association Leadership 9. The more members agree with and feel connected to your regional, the stronger your association becomes Agreement and connection are driven from the bottom up (not top down) 10. Accept, preserve and forward the gift of leadership You have leadership authority because members grant it to you Your role is to create and nurture new volunteers And One More. You will not be able to make everyone happy. If you are, you may not be challenging your regional enough 17

18 Success Looks Like This Inspired leadership Active strategic plan Competent executive director Engaged board and volunteers Active, two way communication Consistent decision making process Success Doesn t Look Like This Lack of defined goals and clarity Dictatorships Stale leadership Annual president s agenda Indecisiveness Apathy 18

19 You do not lead by hitting people over the head. That s assault. Not leadership. Dwight D. Eisenhower Board Service 19

20 Board Legal Duties Duty of Care: expectation that a board member exercises reasonable care when making decisions Good business judgment at all times Due diligence in decision making Board Legal Duties Duty of Loyalty: expectation that a board member remains fithfl faithful and loyal lto the organization Avoid conflicts of interest and personal agendas 20

21 Board Legal Duties Duty of Obedience: expectation that a board member remains obedient bdi tto the central purposes of the organization and respects all laws and legal regulations Faithful to mission and goals Obedient to governing gdocuments Risk and Precautions Antitrust Avoidance Have an antitrust avoidance statement on file Let legal counsel review activities and minutes Apparent Authority Committees and volunteers may not usurp the authority ofthe chief electedvolunteer Policy to restrict stationery for staff and chief elected officer 21

22 IRS Issues Risk and Precautions Unrelated Business Income Tax (UBIT) Public request for tax returns and documents Why Board Orientation? To share information about association leadership To focus on the strategic direction, mission and goals of your regional association To encourage questions and explore opportunities for success and growth To manage risk associated with leadership To prepare you for success 22

23 Board Responsibilities 1. Determine and understand the organization s mission i and purposes 2. Select the CEO or executive director 3. Support the CEO/ED and assess his or her performance 4. Ensure organizational planning and goal setting 5. Manage the organization s resources Board Responsibilities 6. Determine, monitor and strengthen programs and services for members 7. Promote and protect the organization s image 8. Ensure legal and ethical integrity in the organization 9. Help recruit new leaders 10.Assess and measure organizational performance 23

24 Board Staff Relationship Board focuses on governance; being visionaries; ii i strategically t moving forward Staff manages the day to day operations Consider it a partnership, alliance, collaboration between board and staff to achieve the goals of the organization Avoid micromanagement Practical Steps for Board Service Attend all board meetings Start and end the meetings on time Study and understand the mission statement, bylaws, policies and goals Prepare for meetings by reviewing the agenda and supporting documents Treat information and discussions as confidential 24

25 Practical Steps for Board Service Promote the organization to others Recruit future leaders to help govern the organization Stay current on issues and trends impacting the organization and membership Get involved and lead committee work Make contributions and assist with fund raising President / Chairman Board Officers Chief elected officer of the organization Presides over meetings or designates others Interfaces with chief staff officer Leads performance reviews of board and chief staff officer Appoints committees in accordance with bylaws and policies and procedures 25

26 Board Officers Vice President / Incoming Chair (sometimes) Serves in the absence of the president/chair Performs duties identified in the bylaws and policies and procedures and as assigned by the president/chair Secretary Board Officers Oversees the custody of all corporate records, except financial records Monitors the accuracy and timely distribution of meeting minutes Performs duties as identified in the governance documents or as assigned by the president/chair Often chairs the bylaws/governance committees 26

27 Treasurer Board Officers Oversees all funds and financial records Prepares an annual budget for approval Keeps records of all income and expenses Responsible for filings required by law associated with the finances Performs duties assigned by the president/chair or outlined in the governance documents Board Officers Past President / Immediate Past Chair Adds continuity to the board, especially during transition Assists the elected president/chair as needed Often chairs the nominating committee or other committees as assigned 27

28 Board Committees Executive Committee Conducts board business between board meetings Authorized by bylaws and restricted by established policies and procedures Allows important business to be conducted as issues arise with short notice Financial Responsibilities The board should carefully review all financial reports The treasurer should prepare and propose an annual budget The treasurer, with staff assistance, will present a financial report for the previous period at each meeting An annual audit should be performed by an independent accountant 28

29 Committees Most organizations utilize committees They help the board and staff get work done They identify potential and future leaders They serve as a way to segment and serve the interests of subgroups and members Committees Standing: found in the bylaws and ongoing Ad hoc and task forces: appointed as needed and disbanded upon completion of a task or project Work groups, councils, special interest groups: specific in nature 29

30 Preparation Board Meetings Notices and materials will be distributed in advance of the meeting Review the agenda to determine how you should prepare for the discussion Prepare any written reports and provide to staff in advance of the meeting Whenever possible, formulate and ask your questions before the meeting Agenda Board Meetings The agenda is prepared with the input of the chief elected officer, staff, the board with consideration of current issues, member needs and pending business If you have input for the agenda, provide it to the chief elected officer or staff tffwell in advance of the meeting 30

31 Rules of order Board Meetings Procedural rules are used to maintain order at meetings All persons must be recognized by the chair before speaking Time limits may be set on certain topics Learn the basics of rules of order to be sure motions and procedures are understood to your benefit Risk Management 31

32 Risk Management There are risks associated with board service Insurance is one way to limit risk Develop a risk management strategy to protect the organization The Volunteer Immunity Act may not cover all risks associated with association service Risk Management Volunteer Immunity Act: Volunteer Protection Act passed in 1997 Adopted by most states Indemnifies volunteers if they act on behalf of the organization with good judgment Does not cover criminal activity or negligence gg Does not prohibit lawsuits Does not eliminate the need for insurance 32

33 Common Insurance Coverages General liability covers property damage Directors and officers liability (D&O) covers the actions of the leadership, antitrust violations, wrongful hiring, etc. Meeting cancellation covers canceled meetings and the loss of anticipated profits Fidelity bond covers employee theft Risk Management Strategy Eliminate the activities of the organization that t cause risk ik Do you hold meetings and shows in an area frequently targeted by hurricanes? Do you serve liquor at meetings? Can you reduce the risks or insure against claims? 33

34 Risk Management Strategy Evaluate the risks Eliminate risks as much as possible Purchase insurance to minimize risks Constantly review the potential risks and work to minimize them Strategic Plan 34

35 Strategy only delivers promises. People and process deliver results. Deloitte Consulting Why A Strategic Plan Organizations use a strategic plan as a road map for the leadership and staff tff A strategic plan should be updated annually or at least every other year The plan allows members and prospects to see the director of the organization and better understand the ROI of joining Your promise to the membership 35

36 Strategic Planning Process Determine the value of creating or updating an existing iti plan Identify an experienced facilitator Include key stakeholders in the planning process in addition to board and staff Conduct a member survey to determine strengths, weaknesses, opportunities and threats Strategic Planning Process Set aside a day or two specifically for planning an outside tid setting is best Draft the plan and circulate it for additional input from key stakeholders Formally adopt the plan and promote it as the future direction and services of the organization Promote and implement the finished product 36

37 Strategic Goals Limit the number of goals to 4 6 so that resources are not exhausted and success in achieving them is more likely The goals should incorporate strategies as to how the goals will be achieved The goals and strategies should include tasks assigned to committees, volunteers, staff and outsourcers Specific Measurable Attainable Relevant Timely S.M.A.R.T. Strategic Goals 37

38 Strategic Plan The position of president/chair and board member is larger and much more important t than the people who occupy the seats Built from the outside in The association s promise to the members Focus success success measurement Eliminate personal agendas Volunteers 38

39 Leaders don t create followers, they create more leaders. Tom Peters I start with the premise that the function of leadership is to produce more leaders, not more followers. Ralph Nader Volunteer Recruitment Know why your organization wants volunteers Design valuable volunteer assignments Develop and implement your recruitment plan Do not wait for members to volunteer YOU CHOOSE the best person for the job Recruit volunteers one to one In person, on the phone, written communication 39

40 Volunteer Recruitment Prepare yourself to answer questions about what htis involved and be specific Make jobs less demanding through task forces vs. standing committees. Ask members to commit short blocks of time Consider asking one person to tackle a task or issue rather than a group Take time to ask how can we do it better? Rewarding Volunteers Say thank you often, loudly and publicly Say thank you right away. Don t wait for the annual dinner Say thank you to bosses and spouses who have given up time with the volunteers 40

41 Create Job Descriptions Your regional association should have written and updated dtdjob bdescriptions for each of your key leadership roles The RAC website has job descriptions for RAC president, board and delegate positions Volunteer Management What do you do when a volunteer doesn t f perform? 41

42 Volunteer Management 1. Volunteers don t always work out. As a volunteer leader, it is your responsibility to address the issue so others and the project don t suffer 2. Volunteer leader rather than staff should address the non performance 3. Yes, you may fire a volunteer 4. See #2 Volunteer Management What do you do with past volunteer leaders? Create a formal plan for addressing the contributions and needs of past leaders Mentor and trainer Past presidents council Former board member group New member welcoming committee 42

43 The Executive Director Executive Director 1. Hiring and managing an executive director is one of the most important tfunctions of the board 2. Key in shared authority, responsibility and participatory governance between staff and volunteer leaders 3. Bridge the difference between association and business culture 43

44 Executive Director 4. Management values of staff executive must be understood dand compatible with the culture of the association 5. Executive Director tenure is likely to exceed the tenure of any current board member future groups with different needs Know Your Executive Director Term Full or part time Shared or exclusive services Reporting structure Evaluation process Up to date job description Expectations 44

45 Professional Association Executive Reduces professional conflict of interests Preserves objectivity Eliminates identity crisis Conscientiously fulfills board responsibilities Maintains appropriate board and member relationships Experienced in running associations Skills And Experiences Not for profit tax issues and legal issues Financial management Generation of non dues revenue Long range and strategic planning Association organization and operations 45

46 Skills And Experiences Adult continuing education and program development Governance and board structure Member recruitment, retention and satisfaction Marketing, communication and public relations Meetings and expositions management Performance Reviews Quality of work Quantity of work Knowledge of job Communication Initiative and resourcefulness Assertiveness and motivation Cooperation Attendance Planning and organization 46

47 Decision Making Ideal consensus Consensus Unanimity the group is of one mind Practical consensus The minority are willing to go with the majority view because they recognize that the decision meets the needs of the majority and those to whom they are accountable 47

48 Practical Consensus Practical consensus exists when the following conditions have been met: 1. All members of the group have been heard fully, frankly and respectfully 2. All members have been honest in their views and feelings 3. All views have been considered without prejudice Practical Consensus Practical consensus exists when: 4. All relevant information has been shared equally among the group 5. The majority have made every possible effort to mitigate disadvantage to the minority 6. Group members are willing to sacrifice their personal positions for the sake of the whole group and those to whom it is accountable 7. Members act as if the decision were their own 48

49 Good boards spend their time using information, not collecting it. Have information collected before the discussion and decision. Glen Tecker Knowledge based Governance In knowledge based organizations, who makes the decisions i is not nearly as important as the quality of information on which the decisions are made 49

50 Knowledge based Governance Four steps: 1. Discovery sufficient information by the proposing party 2. Dialogue before deliberation 3. Deliberation 4. Decision/policy vs. management Step 1: Discovery Proposing party answers four questions relevant tto desired ddecision: i What is known about stakeholder needs and wants What is known about the capacity and strategic position of the organization What is known about current realities and evolving dynamics of the industry What are the ethical implications of the choices 50

51 Step 2: Dialogue Board and senior staff talk together as equal partners Personal observations and perspectives shared Occurs with no expectations about shaping or changing the opinions ofothersothers Provides only perspective on why people believe as they do Step 2: Dialogue Purposefully uses open dialogue to illuminate issue A process of inquiry is used to: Understand the basis of opinions Clarify choices Examine advantages and disadvantages Consider risks and consequences 51

52 Step 3: Deliberation Decision making discussion Participants attempt to influence, advocate and create consensus for a particular point of view Boards typically use this mode in their deliberations Step 4: Decision Ensuing motion (if any) should be constructed to focus on the strategic t level lof what, htnot how Helps articulate decisions in a way that promotes the distinction between policy (what) and management (how) 52

53 Success Did you work the plan and move it forward? If you didn t have a plan, did you create a plan? Did you develop a stronger, more productive staff/volunteer relationship? Did you nurture and develop future leaders? Success Did you implement and use a consistent, knowledge based ddecision i making process? Did you build consensus? Did you make sure the association s policies, procedures and documents are in order? 53

54 Thank You! The board experience should be a positive one The board is the caretaker of the organization The board speaks as a whole and no board member should have more input or authority than others Always ask questions as they arise Thank you for serving! Questions? Robert McLean, CPA Executive Vice President bobm@ppai.org (972)