The perspectives in this article have been informed by some of my work with not for profit Boards as an interim Executive Director and fair to add, some 25 years of providing oversight to transfer payment agencies.
By way of context, social services in Ontario are governed mostly through volunteers serving on NFP boards. On balance, I think as a province we have been pretty well served by this model. But there is room for improvement.
Social Services funding has grown to billions of dollars. Agencies have become increasingly complex to administer. Governments are more intrusive; there is more regulation and more legislation to comply with. Third party reviewers are running rampant and they have been given more authority than ever to investigate.
Volunteer Board members either have full time jobs and are pursuing their own careers or are retired and leading busy lives. As you might expect, they lean heavily on their Executive Directors to operate their agencies
Executive Directors are generally a committed lot, but are often stretched and are leading organizations without sufficient infrastructure.
Boards are sometimes not organized to provide effective oversight of their Executive Directors. Their governance model often has not been recalibrated to reflect today’s highly centralized and accountable environment. On occasion, there is an over-reliance on “Carver-like principles” that are far too weighted on policy and setting strategic direction with not enough emphasis on monitoring results
NFP Boards generally would do well to be more engaged and more results focused, especially in the key areas of finance, human resources, and program delivery.
They also need to adopt tools to better supervise their Executive Directors. Unlike in government or in other large bureaucracies where there are many “Bosses” looking in, our agencies for the most part rely on Boards of Directors to support and provide guidance to the Executive Director. There are no other layers. Without an engaged Board, the Executive Director can quickly feel pretty isolated at the top.
Here are some critical success factors that will help Boards become more effective in their role as “Bosses”.
- Boards need to have good knowledge of their organizations so they can show leadership in setting priorities.
- Boards need to implement regular reporting on all agency priorities. This can be easily achieved by implementing a Balanced Score Card where senior management can report regularly on the status of their departmental objectives.
- Boards should not only rely on information they receive from their Executive Director. They need the benefit of hearing “other voices” from both inside and outside the organization including clients, staff, funders and other community stakeholders.
- Board members need to be visible and have a good awareness of the health and culture of their agency. Boards that are too far removed are often unaware when their agencies are getting into trouble.
- Boards need to review the adequacy of internal controls and pay particular attention to Executive Director controls on spending and sign-off processes.
- It is critical for Boards to do regular supervision with their Executive Director and have a robust performance management system in place.
- Engaged Boards will be in a better position to support and provide guidance to their Executive Director. They will also be able to take on an advocacy role on issues the Executive Director is trying to move forward.
- Boards need to take ownership of Board member recruitment. They should never delegate this function to their Executive Director.
- Boards need to commit enough time to their governance role. This is not a two hour per month job—but rather requires a commitment of at least six to eight hours.
The stakes for not for profit boards in social services are high — they are governing complex organizations, often serving vulnerable people. They are responsible for the stewardship of millions of dollars. Liability and risks are inherent. They can’t afford to cruise at twenty five thousand feet. In today’s world, Board’s must pay increasing attention to their role as the “Boss’s Boss”.
