Board Governance Road Map. CBO Sustainability Project - Governance Task Team

Transcription

1 CBO Sustainability Project - Governance Task Team Presented by the Provincial Partnership SARC - Saskatchewan Ministry of Social Services 2017

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3 Table of Contents 1. Introduction Key Components of High Performing Boards... 4 a) Establish a clear vision and mission for the organization... 4 b) Clearly define roles and responsibilities... 4 c) Develop a CBO governance policy manual and bylaws that provide guidance and information to help boards be effective decision-makers... 5 d) Make a commitment to the promotion of professional and leadership training... 6 e) Be actively involved in the development of the organization s strategic plan Governance Models... 7 a) Governance model comparison... 8 Policy Board (Traditional Nonprofit) Model The Working Board Model 4. Board Recruitment, Monitoring and Assessment... 9 a) Board recruitment... 9 b) Monitoring board performance c) Board self-assessment Board and Executive Director Professional Development...16 a) Key components of board development b) Methods of obtaining professional development c) Sources of professional development Summary...18

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5 1. Introduction The purpose of this Board Governance Road Map is to outline approaches to create and maintain a high performing governance board and to define key components and methods for monitoring board performance, including board self-assessment tools. It is intended to be a resource and a tool for Community Based Organization (CBO) boards to inform their governance practices and assist them in meeting best practices. In October 2014, MNP submitted a commissioned report on CBO sector sustainability to the Ministry of Social Services. The purpose of the research conducted was to identify direction for the Ministry to take to ensure the long-term viability of the CBO sector. The report identified five primary areas of focus to improve the conditions for CBO sector sustainability and recommendations for further work in each area. These areas of focus are: Outcomes Based Service Delivery; Quality Assurance (Standard-Based Approach); Attraction, Retention and Compensation; Shared Services and Governance. This document stems from the CBO Sustainability Project that was initiated to respond to the above areas of focus and addresses recommendations outlined in the Governance section of the MNP report. The shared vision of the CBO Sustainability Project is: Consistent delivery of services and programs that reliably deliver measurable clientcentred outcomes. A culture of continuous improvement and innovation that improves the quality of life for persons with intellectual disabilities and children in care. CBOs that are effectively resourced and supported to professional levels, with standards of practice and sufficient capacity to deliver. Continued evolution of a collaborative, trusted and open working partnership between CBOs and the Ministry. Through consultation with CBOs that hold contracts with Community Living Service Delivery (CLSD) and Child and Family Programs (CFP), the MNP report identified several trends impacting the effectiveness and efficiency of a significant percentage of CBO boards. There are challenges with board recruitment, including the number of board members, diverse representation of interests and balanced competencies. There is limited board training and barriers to training such as cost and time to attend. A need for governance training was identified as a priority. Training for Executive Directors (EDs) is also limited. 1 There is a need for renewal in some CBOs who are operating with outdated policies and procedures. A clearer understanding of the roles, responsibilities and liabilities of boards and their EDs is required. 1 CBOs are often managed by an ED, CEO and/or Manager. The term ED will be used throughout this document, representing all three titles. 1

6 Good governance is the foundation of any successful organization. Governance is defined in the MNP report as the processes, structures and organizational traditions that determine how power is exercised, how stakeholders have their say, how decisions are taken and how decision-makers are held to account. There are many different ways boards can structure their organization, strategically and operationally. The MNP report identified a preference towards a policy based governance approach while recognizing there are roles for other models including advisory, management and operational governance. The determination of the governance model is unique to the organizational circumstances including the size and complement of staff. What is essential in any structure is clear delineation of roles and responsibilities and policies to navigate. The Governance Task Team is one of several task teams within the CBO Sustainability Project working to ensure the long-term sustainability of CLSD and CFP funded CBOs. All task teams have representation from CLSD and CFP CBOs, SARC 2 and the Ministry of Social Services. The Governance Task Team s purpose and objectives are focused on providing strategies aimed at strengthening CBO board of directors, including the establishment of: Clarity regarding roles, responsibilities and liabilities. Awareness and access to training opportunities in order to competently fulfill their duties. Vibrant and engaged board leadership and volunteerism. The Governance Task Team is accountable to the CBO Sustainability Core Group, which in turn is accountable to the Provincial Partnership, and is comprised of Ministry of Social Services officials, SARC board members and senior officials. The Governance Task Team has a mandate to: Provide direction on governance best practice models, policies and practices. Establish key components of high performing boards to guide the development of organization standards. Identify different types of relevant governance models and their primary functions. Establish key components of board self-assessments. Outline essential elements of training for board members and EDs and linkages to relevant resources. 2 SARC is a non-profit association that works with Community Based Organizations to expand the potential and quality of services they provide. SARC offers CBOs best practices in a variety of areas, including training, consulting, services and leadership. In 1997, SARC and the Ministry of Social Services formally agreed to develop and maintain a relationship to work collaboratively on issues of mutual concern. This relationship is formally named the Provincial Partnership. 2

7 The Board Governance Road Map is organized around each of these deliverables. Each section of the document provides best and promising practice guidance, tools and resources for CBO boards and EDs. The Board Governance Road Map outlines key components of high performing boards, tools to strengthen and improve recruitment and self-assessment tools for monitoring board performance. Effort has been made to provide a common foundation of information on board governance for CBOs to build upon. The Governance Task Team recognizes that there is a broad range of governance capacity throughout the sector and that each board will be at different stages of its development cycle and may value and use the tools provided differently than another CBO. They also acknowledge and respect the independence and autonomous nature of each board. It will be up to each board and ED to determine what areas they individually and collectively need to develop further. Successful boards take time for reflection, planning and development to ensure they continually evolve and improve. 3

8 2. Key Components of High Performing Boards Organizational success is dependent upon strong governance. Boards are responsible for the governance of their organization. They are tasked with setting a clear direction and organizational purpose, and ultimately fulfilling that purpose. The following are key actions boards should take to meet their obligations to define and monitor their mandate, strategic direction, policies, roles, responsibilities and board development. a) Establish a clear vision and mission for the organization Key Objective: The board establishes a vision that sets the direction for the organization and is used to make decisions about priorities, actions and responsibilities. Adding to this work, the board should develop a mission statement that describes the organization s stated purpose. Specific actions include: The board works in collaboration with the ED to establish a vision statement that provides direction and leadership for the organization. Boards establish a mission statement that speaks to an organization s activity and purpose in their community. The vision and mission should be reviewed and evaluated to ensure alignment with the goals of the organization at a minimum of every three years. Boards acknowledge and promote a culture of leadership within their organization. b) Clearly define roles and responsibilities Key Objective: Board members understand the structure of the organization, their role(s) and the duties and obligations that are expected of them. Specific actions include: The board has a written and signed code of conduct which aids in building an environment of trust and the ability to bring forward ideas and/or concerns. This code of conduct includes specifics on confidentiality processes, board professionalism, conflict of interest and ethical conduct. Organizations have Directors and Officers Liability Insurance and understand what they are personally liable for and what is needed to protect the organization as a whole. Boards are aware of all applicable legislation to ensure the organization is in compliance. The board has clearly defined role descriptions for board members, the chair and ED. Boards acknowledge and understand the distinct role between governance and day-today operational functions. 4

9 The board understands its role as the employer of the ED and engages in regular performance activities. Boards establish and follow clearly defined processes for reviewing and monitoring financial reports. The board approves annual budgets that align with the organization s priorities and operational plan. The board understands its role in the creation, support and leadership of a personcentred culture within their organization and engages in continuous improvement activities towards the achievement of a person-centred culture. For example, selfassessment. c) Develop a CBO governance policy manual and bylaws that provide guidance and information to help boards be effective decision-makers Key Objective: Develop a policy manual and bylaws that require the formal approval and amendment by the board of directors. These documents should contain distinct policies based on the established governance model. Topics may include the board and ED relationship, monitoring and evaluation, laws and regulations and board processes. Specific actions and details include: The board and ED develop a policy manual that provides clarity on roles and responsibilities, laws and regulations, review and evaluation processes and strategic planning. The policy manual has a section that includes information on the hiring processes that the CBO board utilizes when hiring a new ED. The policy manual should specify policies related to board member activity, including frequency of meetings, information on bylaws, board attendance, criminal record checks, limitations within the Human Resources processes and board expenses. The policy manual provides guidelines on board decision making processes, including steps for presenting and voting on a motion. The board approves all governance policies and procedures and reviews them every 2-3 years to ensure that content is being updated and changes are being made as needed. 5

10 d) Make a commitment to the promotion of professional and leadership training Key Objective: Boards provide both professional and leadership training opportunities for new and existing members. Specific actions taken include: Board members have access to training opportunities that relate to their needs, roles and responsibilities. The orientation of new members occurs within the first quarter. The board has an organizational orientation process that includes information on the organization s programs and services, overview of intended roles and responsibilities, strategic planning, finances, funding cycles, contract agreements, performance targets/ reporting processes and succession planning. Board members and the ED acknowledge the importance and value of professional and leadership training and have established a training schedule and/or processes for ongoing development opportunities. e) Be actively involved in the development of the organization s strategic plan Key Objective: The board is actively involved in the development of a multi-year strategic plan, including the establishment of key objectives, action items, outcomes and performance targets that align with the needs of their community clients and stakeholders. Specific actions include: The board develops a strategic plan that identifies the organization s top priorities and/or goals, enables the organization to make effective decisions, and translates to work plans and actions that align with outcomes. The board works with the ED to secure and/or allocate resources, based on top priorities. The board reviews its organizational performance and strategic targets on a continual basis and has an established review and evaluation process. 6

11 3. Governance Models Governance is a set of structures, functions and practices that defines who does what and how they do it. 3 A governance model is a framework that describes how the organization makes decisions and delineates roles, as well as, responsibilities between the board of directors and ED. CBOs should align their policies under a specific governance model. There are several models of board governance. The two primary governance models present in the Ministry of Social Services funded CBO sectors are the policy board and working board. Details of each are outlined in the chart below. For the purposes of this document the term policy model is not specific to the Carver Model TM. The working board is most common when the CBO has limited funding for an ED position or other administrative functions. The delineation between a policy governance board and a policy board resides in the clearly defined policies of the former that establish the executive limits of the ED. Within the policy governance board, the board is ultimately responsible for policies, executive limits and board processes. The ED is responsible to the board, not for it, and reports on operational, strategic and tactical decisions as outlined in board policy. All personnel and operational responsibilities fall within the executive limitations of the ED. Boards are encouraged to adapt a governance model that fits within the unique circumstances of their organization. Many boards will have components of more than one model in order to work within the resources of their organization. Boards who create policy and establish direction while the ED takes care of day-to-day operations are considered to be following best practice. The Governance Model Comparison outlined on the next page can be used as a discussion tool for boards to determine the model they are currently using and where adjustments may be required. 4 3 Module One: Governance & Strategy - Ministry of Health Director Education & Certification Program, (Saskatchewan Ministry of Health, fiscal year). 4 Adapted from William Brown, Understanding Organizational Configuration and Models of Board Governance in Nonprofit Organizations, (United Way of Canada: Board Development.org, 2000); Kathleen Fletcher, Four books on Nonprofit Boards and Governance - Nonprofit Management and Leadership, (Wiley Periodicals Inc., 1999); Linda George, Board Models Comparison Chart - Board Basics Manual (United Way of Canada); John Carver, Boards that Make a Difference - 3rd Ed. (Jossey-Bass, 2006); John Carver & Miriam Mayhew Carver, Reinventing Your Board - 3rd Ed. (Jossey-Bass, 2006). 7

12 GOVERNANCE MODEL COMPARISON GOVERNANCE MODEL COMPARISON POLICY BOARD MODEL WORKING BOARD MODEL Board Functions (board development, recruitment, structure, etc.) Board Processes and Agenda (How the board does its work) Board-directed, ED-driven Board-directed, ED-influenced Board Board sets the agenda and process by consensus Business Management Operational Work Strategy, Planning and Direction Setting Board delegates to ED, but stays involved in operating detail Staff but often with advisory board committees Board sets direction with ED guidance, board often creates the plan Board directly involved Board Representing Membership Board Board Board defines big picture and operational detail Executive/Board and Staff Relationships Committees ED is subordinate to board, relationship is defined within policy Do much of the board work; report to board, extensive committee structure supported by staff; board reviews and approves operational reports and plans ED works for the board, relationship not clearly addressed, much cross-over for decision- making authority Board supports work of operations, board member workload heavier Board Role Executive Director Role Direction, oversight of operations, fundraising Guidance and support to the board, management of the business All issues, strategic and operational Implement board decisions Fiduciary Responsibility Financial Decisions Human Resources Monitoring for Accountability Board, but the ED has control of the mechanisms Treasurer and finance committee set policies and oversee, ED proposes, board reviews full financials Board sets personnel policy, ED reports primarily to chair but is accountable to the full board. Communication between chair and ED. ED is the only employee of the board. Committee oversight, review of historical results, board inquiries into areas of concern or interest Board Resource Securing Board and/or ED Either Board is largely in control of all financial decisions Board is responsible for all HR functions, as there is often limited/no staff Board, if at all Decision-Making Power Board with ED input Board, often uses grassroots or collective method of problem solving 8

13 4. Board Recruitment, Monitoring and Assessment Strong boards lead to strong organizations. Boards that place high value on attracting, recruiting and retaining members with diverse skill sets are more effective. In addition, boards that understand their role and purposefully monitor the overall performance of the organization, including how well the board is doing its job, are more successful. a) Board recruitment Board recruitment can be challenging. Vibrant boards have a plan and a process in place for board recruitment which they review on a regular basis. The responsibility of board recruitment is often assigned to a committee. Successful boards have a diverse skill set and represent the community they serve. It is useful for boards to complete a gap analysis to determine what competencies (skills, knowledge and abilities) could enhance the board s productivity and recruitment. Boards can develop a profile matrix, as shown on the next page, that outlines the different experiences and key competencies that should be represented on the board. The profile matrix needs to be adapted to accommodate the board s unique needs, clients and circumstances (e.g. legal skills, fundraising, partnership negotiation, building constructions, etc.). The needs and context of organizations change, so recruitment tools should be reviewed and updated regularly. Boards that have competency gaps should work to fill those gaps either through recruitment or professional development. A best practice for boards is to utilize an application when recruiting new members. This will provide the opportunity to collect information on the competencies about each applicant and to identify potential members that will fulfill specific needs within the board. Where deficiencies exist, recruitment of board members with specific skills sets should occur. Defined terms will help the board with developing and implementing a recruitment strategy. 9

14 Years on Board Sector/Connections Corporate Higher Education K-12 Education Local Government Media Religious Groups Small Business Social Services Technical Education Areas of Expertise Financial Management Fundraising Human Resources Law Leadership Marketing Planning Public Relations Social Policy Technology Representation Client Group A Client Group B Gender Identifies with Male Identifies with Female Age Over 65 Ethnicity Caucasian Indigenous Other Person A BOARD PROFILE MATRIX⁵ Current Members Person B Person C Person D Person E Prospective Members Person F Person G Person H 5 Adapted from Family Service Regina, Family Service Calgary, Family Services of greater Vancouver, Family Service Saskatoon, Catholic Family Services of Calgary, Canadian Centre of Accreditation, South Riverdale Community Health Centre and Accelerating Non-profit Success at accessed September 11,

15 b) Monitoring Board Performance It is best practice that boards establish a performance management framework. A board performance framework is the development and implementation of structured tools essential to aid the board in measuring fulfilment of its responsibilities. Measuring performance provides the board a tangible way to identify gaps, risks, areas of concern or needing further development or attention. It can also be a valuable process in assessing and acknowledging what the board and the organization does effectively. Some of the key areas of responsibility for a board to monitor include: Performance of the board on its core responsibilities Adherence to organization s mission and strategic direction Ensuring appropriate and effective leadership and resources exist Financial and risk management practices The establishment of key priorities Board composition and processes Boards that follow best practice routinely monitor and discuss performance of the board itself, of programs and the organization to inform the strategic plan, resource allocation, and evaluation of the ED. Involvement of the organization s clients/consumers/stakeholders should be part of the performance monitoring process. Successful organizations set key areas of organizational focus that align with their strategic plan and mandate. The board needs to clearly identify key performance measures, targets and outcomes to describe what will be achieved, how the organization will know it was achieved and what impact resulted from the effort. A performance framework that includes these key areas will allow the board to monitor its progress on delivering its mandate and strategic plan. Monitoring board and organizational performance raises the awareness of strengths and areas of development. Tools that monitor overall performance help the board recognize strengths and focus efforts on areas in need of greatest improvement to meet the organizational vision, mandate and goals. 6 The Dynamic Board: Lessons from High-Performing Non-profits (McKinsey & Company, May 2003). 11

16 c) Board self-assessment As previously referenced, a board has numerous areas that require monitoring, including its own performance. A board self-assessment tool can cascade into the board s performance management framework by identifying key areas that require concentrated work and improvement. Research has shown that boards of non-profit organizations who take time to regularly assess their performance are more effective than those who do not. Very often board members themselves and those who connect to the board on a regular basis, such as the ED, have many ideas about what is working and what needs to improve. One of the best ways to tap this potential source of information is to have board members and other key individuals complete a well-designed and thought out questionnaire covering all facets of board performance. When summarized and analyzed, the results provide an excellent basis for board learning and self-development. A board self-assessment is about the board assessing itself and how effectively it is doing its job. It is not a performance evaluation of the ED, the organization or even individual board members. Rather, it is an opportunity for the board to look at itself and ask, how are we doing as a board? The value of a board self-assessment comes when the tool leads to a healthy and productive discussion about the board s strengths and weaknesses, and results in an agreed upon plan to address weaknesses and build upon strengths. There are a number of topics boards can choose to conduct self-assessments on based on their individual circumstances including: General Governance Communications Board roles and responsibilities Strategic planning and vision Board structure and appointments Achievement of agency objectives Board leadership, teamwork Relationships and management relations Board team functioning Board meetings Succession planning Evaluations Policies 7 Leadership, integrity and ethics Stewardship and risk management On the following page, is an example of a board self-assessment tool that covers a number of the key components under the board s scope of influence. There are also a number of examples of board self-assessment tools and questionnaires online and through board governance articles and books. Organizations are encouraged to find a tool that reflects the board s scope of influence and further adapt to best meet the organization s needs. Boards should also establish a process and timeline that outlines how often a board assessment is done, how the information collected with be compiled and shared and what will be done with the results. 7 Adapted from the Family Service Regina and the College of Continuing Education, Board Self-Evaluation Questionnaire - A Tool for Improving the Governance Practices of Non-Profit Organizations (Dalhousie University, 2013). 12

17 A. How well has the board done its job? BOARD SELF-ASSESSMENT TOOL 8 1. Our organization has a multi-year strategic plan or a set of clear long range goals and priorities. Yes No Unsure 2. The board s meeting agenda clearly reflects the strategic plan or priorities. Yes No Unsure 3. The board reviews and approves the annual budget. Yes No Unsure 4. The board establishes, in consultation with the ED, the goals for ED achievement. Yes No Unsure 5. The board ensures that the organization s accomplishments and challenges are communicated to clients, members and stakeholders. Yes No Unsure 6. The board receives reports on how the organization uses its financial and human resources. Yes No Unsure 7. The board receives reports from each committee at least quarterly. Yes No Unsure How can the board be more effective in its role? Provide comments: B. How well has the board conducted itself? 1. Board members are aware of what is expected of them. Yes No Unsure 2. The agenda of board meetings is well planned so that we are able to get through all necessary board business. Yes No Unsure 3. Board members come to meetings and are prepared. Yes No Unsure 4. Board members receive reports in advance of the meetings. Yes No Unsure 5. All board members participate in board discussions. Yes No Unsure 6. The board does a good job of encouraging and dealing with different viewpoints. Yes No Unsure 7. All board members support decisions we make. Yes No Unsure 8. The board takes responsibility for recruiting new directors. Yes No Unsure 13

18 9. There is an orientation process for new board members. Yes No Unsure 10. Board meetings are fun, interesting and informative. Yes No Unsure 11. The board has a succession plan for the ED. Yes No Unsure Where can the board improve its performance? Provide comments: C. Board s relationship with the ED? 1. There is a clear understanding of where the board s role ends and the ED s begins. Yes No Unsure 2. There is good two-way communication between the board and the ED. Yes No Unsure 3. The board trusts the judgment of the ED. Yes No Unsure 4. The board has developed formal criteria and a process for evaluating the ED. Yes No Unsure 5. The board, or a committee of the board, has formally evaluated the ED within the past 12 months. Yes No Unsure 6. The board evaluates the ED primarily on the accomplishment of the organization s strategic goals and priorities. Yes No Unsure 7. The board supports the chair to provide feedback to the ED on a regular basis. Yes No Unsure 8. The board ensures the ED takes advantage of professional development opportunities. How can the relationship between the board and ED be strengthened? Provide comments: Yes No Unsure 14

19 D. Board member s understanding of the organization s business 1. The board members can clearly articulate the vision, mission and strategic priorities. Yes No Unsure 2. The board is knowledgeable and able to identify threats and opportunities to the organization. Yes No Unsure 3. The board is knowledgeable about the programming offered. Yes No Unsure How can the relationship between the board and ED be strengthened? Provide comments: 8 Adapted from Family Service Regina, Family Service Calgary, Family Services of Greater Vancouver, Family Service Saskatoon, Catholic Family Services of Calgary, Canadian Centre of Accreditation, South Riverdale Community Health Centre and Accelerating Nonprofit Success at accessed September 11,

20 5. Board and Executive Director Professional Development Learning organizations are successful organizations. Boards are responsible for ensuring they understand the development needs of their board members, as well as the ED. Boards need to be prepared to govern and equipped with the knowledge to fulfil their responsibilities competently. Establishing opportunities for board development is a form of investment in the success of the organization at hand. Development needs of a board will be unique based on the distinct knowledge, skills and abilities of its board members. a) Key components of board development To prepare boards to face the challenges and mitigate the risks associated with governing a nonprofit organization, there are five essential elements to cover as part of a board development plan: 1. General governance structures, functions and practices 2. Board roles and responsibilities 3. Board s role as employer of the Executive Director 4. Financial responsibilities 5. Legal responsibilities Through regular self-assessment and ongoing performance monitoring, boards can identify gaps within specific areas of responsibility and seek out learning opportunities accordingly. b) Methods of obtaining professional development There are a variety of methods boards can use to bring professional development opportunities to their board members and ED. There are barriers that can limit board attendance at learning sessions, including difficulty taking time away from work, geographical isolation and limited financial resources. Boards need to be creative and adaptable to overcome these barriers. Learning seminars, workshops, courses and webinars are available online. Establishing a peer-topeer or mentorship arrangement between existing board directors or with directors of another board is also a possibility. Many organizations are making investments in specific board members that have the time and ability to attend off-site courses. These individuals are then tasked with transferring their learnings to other board members. The professional development needs of the ED are complementary to that of the board, but focused on operational management and leadership. 16

21 c) Sources of professional development It can be challenging for boards to find the professional development opportunities required and at the frequency needed to maintain momentum as a learning organization. There are a few organizations in Saskatchewan that have stepped in to specifically meet the learning needs of non-profit boards and EDs. The United Way in Saskatoon and Regina, Chamber of Commerce, University of Saskatchewan Extensions Division, University of Regina, Johnson Shoyama and Leadership Saskatoon offer a wide variety of professional development. Depending on the specific needs of each board and their ED, further research into the offerings of each program should be pursued. SARC has developed and launched two leadership programs, ELEVATE and the Leap, that were specifically designed for non-profit boards and organizational staff. Further information on professional development for CBO excellence is available on the SARC website. Both CLSD and CFP CBOs can access SARC training. 17

22 6. Summary Good governance is essential to achieving an organization s mission and vision. The Board Governance Road Map was created to provide guidance to boards on how to optimize their performance to achieve their purpose and better meet the needs of the individuals they serve. Board members are accountable for governing the organization so that it can deliver on its mission. There are several parts of organizational governance that board members need to know and lead to be effective. These include: Implementing key components of high performing boards. Establishing a clear governance model, board policies and roles and responsibilities that align accordingly. Utilizing targeted recruitment strategies to round-out required board competencies. Developing board assessment tools customized to the organizational circumstance, regularly monitoring the effectiveness of the board and organization to make decisions and deliver on its mandate. Where limitations exist within the board, seeking out professional development opportunities to fill important knowledge gaps. The tools provided in the Governance Road Map can be adapted to meet the specific needs of each board. The Governance Road Map recognizes that boards are at different stages in their development and evolution, and that progress may be incremental. The important thing is that a board commits to the journey of leading and sustaining a high performing organization. High performing boards are more effective at recruiting and maintaining board members and achieving overall organizational success. Successful organizations create positive outcomes in the lives of the people they serve. 18