How Effective is Your Not-For-Profit Board of Directors?

By Kristin Clayton, CPA

Is your not-for-profit board effective? Many would answer that question no. I get to sit on both sides of the table as I serve as treasurer for a board and also work with many boards in my role as external auditor.

Here are a few ideas I have seen boards implement over the years to improve their effectiveness:

• Update the onboarding process. If there are not clear expectations from the beginning you will have trouble with accountability and engagement later. Take it beyond just handing them a board book. Provide an overview of the organization and structure, ask them to sign a commitment to number of meetings, active participation, fundraising goals, committee participation, etc. Set up a lunch with management and the Board President to discuss these items and get engagement and commitment from the very beginning.
• Require board training as part of onboarding process. There are many organizations that provide these services. MHC&S would be happy to discuss a board training to cover fiduciary duties for your board or finance committee. We can also offer other options for more extensive training either in-house or by an outside organization.
• Make the Board President or Chair responsible for setting the tone. Select a leader for the Board that is comfortable with holding people accountable. This is easier if those commitments are signed in an agreement up front with the board member. The leader of the Board needs to have strong people management skills and a thorough understanding of the Organization.
• Select board members with diverse backgrounds and experiences. Identify the key skills you would like to have as a resource for your organization (legal, finance, marketing, fundraising, member relations, etc.) Different skills, backgrounds and experiences will allow for many perspectives when problem-solving and brainstorming.
• Set term limits for board members. Fresh ideas and new passion for the Organization will keep inspiring and motivating the remaining board members and management. Once term limits are up, consider an advisory or alumni committee to keep those members engaged that would like to continue with the Organization.
• Set goals as part of strategic planning. The Board should set goals annually as part of the 3-5-year vision for the Organization. Those goals should be reviewed annually to evaluate progress and success.

Both in my role as treasurer and as an auditor working with management and boards of not-for-profit organizations I have noticed that there is always room for improvement. Even the most organized and well-run boards still sometimes aren’t as effective as they should or could be. I hope the tips shared above may help you implement some new strategies for working with your Board.

Kristin Clayton, CPA | Senior Manager
KClayton@MHCScpa.com