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Chapter 1
Effective Boards
of Directors
An excellent nonprofit organization has a well-functioning board of directors. The board has the responsibility of setting policies for the organization and hiring staff to implement these policies. For a board to function effectively, it should meet several criteria:
♦ Its bylaws are current, are followed, and meet the needs of that organization.
♦ Procedures are in place for getting excellent board members.
♦ Steps are taken to keep excellent board members, and to remove board members who are not meeting their responsibilities.
♦ Board members know their responsibilities and carry them out effectively.
♦ The board functions through a well-planned committee structure.
♦ Board meetings are conducted in an efficient manner.
A. Bylaws
Several items should be clearly spelled out in the bylaws:
1. Number of board members
There is no optimum number of board members. The size of the board should depend on the specific needs of the organization. If the board’s role is limited, a small board might be more appropriate. However, if extensive board time is required for fund-raising, or if the board has a large number of functioning committees, then a much larger board is in order.
The number of board members is set in the bylaws. One effective technique is to set a minimum and maximum number of board members and to allow the board to determine its size within these parameters. Then, the board can start small and add members as the need arises.
Another technique is to allow the board chair to appoint a number of individuals to the board with board approval. In this way, if additional board members are needed to meet specific needs, these members can be added quickly.
2. Term lengths and limits
The term of board members must be included in the bylaws. Board members should have fixed terms of office. One common practice is for all board members to have three-year terms, with one-third of the members being elected each year.
Having set terms is a good way to assure board continuity. It also provides an effective procedure for removing unproductive board members. At the end of their term, board members who are not productive are simply not renominated.
Some organizations limit the number of terms of board members and officers. If an organization has difficulty finding excellent board members and officers, the number of terms should not be limited. A board member or officer who is functioning effectively should be able to continue to serve. Of course, a board member or officer who is not meeting his or her responsibilities should not be reelected at the end of the term.
However, if an organization has a number of excellent candidates willing to assume board and officer positions, limiting terms might be considered. If the bylaws include term limits, however, it is always a good idea to give the board flexibility. For example, even if a board limits terms of board members or officers, the board should be permitted by majority vote to waive the provision in individual instances.
In addition, not every board member must be a voting member. Many boards include past presidents or current committee chairs as non-voting board members. Other boards include board members or officers who cannot run again (because of term limit provisions) as non-voting board members.
3. Election process
The election process should also be clearly spelled out in the bylaws. Many organizations have a Nominating Committee that is responsible for recommending new board members to the full board, and for recommending a slate of officers. The Nominating Committee often is chaired by the immediate past president of the organization, since that individual knows who has contributed to the organization in the past.
The Nominating Committee should carefully review the service record of each individual the committee wishes to consider renominating for either board membership, or for an officer position. Has the potential nominee attended the large majority of board meetings? Has the nominee served as an effective committee member? Have they actively participated in fundraising? Fulfilled their duties as officers? If so, the individual should be renominated. If not, he or she should be thanked for past service, but not be renominated.
Most Nominating Committees recommend only one individual for each board of directors or officer position. This is a decision that should be made by each individual board. Would contested elections help or hurt that particular organization?
Additional candidates for board membership or officer positions can be nominated either in advance or from the floor at the election. In some organizations, the officers are elected by the full membership. In others, the board of directors elects its own officers. Many organizations elect their officers to two-year terms, although one-year terms are quite common.
Boards should also consider forming a standing Board Development Committee and assign this committee the functions previously performed by the Nominating Committee. See Section B, on page 26, for a discussion of the functions of a Board Development Committee.
4. Officers
The elected officers of many organizations are similar:
♦ President or Board Chair. Leads the meetings of the organization. Appoints committee chairs. Either signs or co-signs checks, or delegates this duty to another individual. Often supervises the executive director.
♦ Vice-President or Vice-Chair. Assumes the duties of the president or chair in his or her absence. Often is given specific responsibilities either in the bylaws or by vote. Automatically becomes the next president in many organizations. Many organizations have several vice-chairs with specific duties. A particular vice-chair may oversee the functioning of several committees, for example.
♦ Secretary. Either takes minutes at the board meeting or approves the minutes if taken by another individual. May be responsible for all correspondence relating to board membership.
♦ Treasurer. Responsible for the finances of the organization. Usually makes financial reports to the board and signs checks.
5. Amendments to bylaws
It is important that each organization has flexibility in changing its bylaws to reflect the needs of that organization.
A Bylaws Committee should meet periodically to review the bylaws and make recommendations for revisions.
A common method of assuring flexibility is to permit the board of directors to revise the bylaws by majority vote at any meeting, as long as the specific wording of the proposed bylaws change is submitted to each member in writing prior to the meeting.
B. Getting good board members
Many organizations are finding it more difficult than ever to get excellent board members. This is due to factors such as the proliferation of nonprofit boards, the fact that individuals often relocate to other communities, and the increasing number of women in the workforce.
Therefore, a board should establish a Board Development Committee as a standing board committee. This committee would assume all the roles played by the Nominating Committee. It would have as its responsibility not only obtaining quality board members, but also of keeping them.
1. Responsibilities of the Board Development Committee
The Board Development Committee should strive for a diverse board and list the types of characteristics desired, such as:
♦ Expertise: Some board members should have personnel management, fiscal, or legal expertise.
♦ Ages: It is helpful to have senior citizens represented as well as young people.
♦ Races and religions: All major races and religions in the community should be represented on a diverse board.
♦ Geography: Individuals should be selected from all parts of the geographic area served by the agency.
♦ Income levels: Having wealthy individuals on the board will help with fund-raising efforts, but individuals with low and moderate incomes should also be included.
♦ Backgrounds: It would be helpful if some board members have corporate backgrounds, some are government leaders, and some serve on the boards of other nonprofit groups.
♦ Users of the service: Boards should include representatives of the client population being served. On some boards, current clients are included, while in others, former clients are considered for board membership.
The Board Development Committee should search throughout the year for individuals with these characteristics. Board and staff members should be encouraged to recommend individuals for board membership. Individuals who have volunteered to serve the organization by assisting in its programs should be considered for board service.
The Board Development Committee should contact community groups to obtain lists of possible board members. Senior citizen groups, youth groups, chambers of commerce, and ethnic organizations could be among those requested to recommend possible board nominees.
2. Board member responsibilities
Each board member should receive a list of responsibilities. These should include:
♦ Attending board meetings on a regular basis and participating on at least one board committee.
♦ Personal contribution to fundraising campaigns.
♦ Participation in board special event fundraising activities.
Prospective board members should be interviewed in person by a member of the Board Development Committee. If possible, they should be interviewed by an individual who knows them. The prospective board member should be asked questions to ascertain if they support the mis...
