Board Beyond Belief

A board is a flat slab of wood or other material used for some specific purpose. Second it is an organized body set up for a specific purpose: to advise, oversee, govern and exact accountability from a business, a charity, or other type of organization. In some of the boards I've served I can't really tell that there's much difference from the first definition to the second.

But I also think some people who run nonprofits, my area of specialty, have about the board they want or deserve - despite their protestations. In their cups more than one of this type has confided to me that they view their board as an expensive nuisance that contributes less than it should in time, money or smarts and demands more than it should through micro-governance, bird-brained schemes and high maintenance. These executives usually have a poor to awful relationship with their chairperson and other trustees.

The very best boards I've seen are well led at the top and respectful of management. They understand governance, pay attention, show up and are clear in their expectations of management; if not generous to a fault the board members are strong contributors.

The not so good boards are most often founder dominated."Fish rots from the head down," says the ancient proverb. Board members and management go along; no one wants to cross the founder. New ideas and new ways disappear into committees that never meet. Sometimes it is hard to feel the stiletto or even know where it went in.

The best nonprofit CEOs I've worked for have figured out a modus for dealing respectfully and candidly with the board chairperson; they make sure the board's membership rotates and that there is reasonable enforcement of term limits. They are transparent in their dealings with the board, they are accountable, they consult and both offer and seek advice. They are tough-minded and most of all they have humor.

Then there is a vast middle: In the board room tarries people who should have left - toes up or otherwise; often the board is observably passive/aggressive. Meetings are stunningly soporific because of the baffle-them-with-bullshit style of deliberate information overload, incomprehensible financial reports, suffocating detail about the golf event and no time left to discuss "program."

This is the question I ask myself: if this organization's board did not exist what difference would it make? If I'm not sure I have a board beyond belief!

Mind The Gap ...

It's sometimes said that trustees of nonprofits check their brains at the boardroom door. Otherwise sophisticated men and women - people who are successful in business, or who can manage money or who bring critical skills to an organization don't apply the same rigor to nonprofit governance as they do to their own business affairs.

There may be occasional good reason to place that charge on board members. I have seen dereliction from both the perspective of the consultant advising boards as well as from the vantage point of a person with long experience serving on nonprofit boards. One reason board members may act casually is because they trust management to do the real work and they rely heavily on the information management gives them - or doesn't.

This brings me to ACORN, the national association of community organizers. On its web site - but only after national press attention apparently forced it - Maud Hurd ACORN's president issued this statement:

“ACORN now begins a new chapter as its founder and chief organizer, Wade Rathke, is moving on from the organization he founded in 1970. The ACORN Board recently learned that Wade’s brother, Dale, misappropriated organization funds eight years ago, and as a result, the Board decided it was in the best interests of ACORN for Wade Rathke to step down as Chief Organizer. Eight years ago an enforceable restitution plan was obtained. Regular payments have been made over the intervening years, and arrangements are now in place to return the rest of the misappropriated funds."

The operative phrase here is of course "recently heard." How could it be that the board members just learned of an eight-year old crime? One answer is management did not tell them. A second answer is that in relying on management's good faith nobody asked any questions. But even when questions are asked there is no guarantee that the truth will out.

Having recently gone through a financial crisis as treasurer of a nonprofit I know first hand how hard it can be for a trustee to really know what's going on. Each month the finance committee of this organization received detailed financial information and each month I would ask management the same question: "any surprises?" And each month I was assured there were none. Until in the dog days of last summer a million dollar short fall turned up. Luckily - after a thorough and costly forensic investigation - incompetent accounting and not crime turned out to be the root cause.

If I had known what questions to ask, I'd have asked them. I suspect that would have been true of ACORN's board as well. Boards don't always know what questions to ask and managements are sometimes not forthcoming. Mind the gap .