Thursday, September 13, 2018

Best Board Books #7 - The Nonprofit Board Answer Book

You have questions—here are 85 answers from another must-have governance book in this series on the best board books.

Book #7: The Nonprofit Board Answer Book: A Practical Guide for Board Members and Chief Executives (3rd Edition), published by BoardSource  (Order from Amazon)

Peter Drucker, the father of modern management, said, “My greatest strength as a consultant is to be ignorant and ask a few questions.”

“Behind every good answer lies a good question,” says BoardSource in the introduction to the third edition of this jam-packed resource. Now with 85 questions and answers, it’s a must-have tool for both new and veteran board members as you inspire them to be life-long governance learners. Suggestion: bring it to every board meeting—and pass it around the room. It will be irresistible to your board members in their search for proof texts!

When you scan the table of contents, dozens of relevant questions will jump off the page—and tempt you to read the crisp, well-written two- to four-page answers. Examples:

Part One: Basic Board Functions
1. What are the basic responsibilities of a nonprofit board? 
5. What is the board’s role in strategic planning?
7. What is the board’s role in fundraising?
9. How does the board avoid the extremes of “rubber stamping” and micromanaging?

Part Two: Board Structure
13. What is the best size for our board?
19. What is the role of the board chair? 
21. How should we select our board officers?

Part Three: Board Member Selection and Development
23. How can we recruit active, involved board members?
25. What is the chief executive’s role in board recruitment?
32. What should we do about uninvolved board members?

Part Four: Board and Committee Meetings
41. How can we encourage debate while promoting civility in the boardroom?
42. What is the purpose of a board retreat?
44. How should staff members participate in board and committee meetings?

Part Five: The Board’s Role as a Fiduciary
52. What are the signs of financial distress in an organization?
54. What policies and practices should we adopt to manage conflicts of interest? 
57. Why should every board member make an annual monetary contribution?
58. How can we develop board members’ fundraising skills?
59. How can we generate revenue beyond fundraising?

Part Six: Board-Staff Relations
64. What is the ideal relationship between the board chair and the chief executive?
67. How should we evaluate the chief executive?
68. How do we set fair compensation for the chief executive and the staff?
70. What is the board’s role in relation to the staff?
72. How can we facilitate the end of a chief executive’s employment?

Part Seven: Organizational Change
75. What is the typical lifecycle for a nonprofit organization?
76. How do we ensure that the organization thrives after the founders depart? 

The first edition, written by Robert Andringa and Ted Engstrom (1916-2006), built the reliable rails for the second and third editions. This is an excellent resource.

BOARD DISCUSSION: Question 77 asks, “When should an organization consider revising its mission statement?” (Not this year! We just spent $5,000 framing it on the reception wall!) BoardSource recommends you review the mission statement’s relevance annually and “discuss whether new laws, dramatic economic or environmental shifts, other organizations entering the picture, or other changes may justify a revision.” When is the last time we have seriously reviewed our mission statement?

MORE RESOURCES: Check out the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson, including Lesson 39, “Invest ’10 Minutes for Governance’ in Every Board Meeting.” 

Thursday, September 6, 2018

Best Board Books #6 - Serving as a Board Member: Practical Guidance for Directors of Christian Ministries

As a reminder—the prompt for this current blog series is the question I’m frequently asked, “What governance book would you recommend we read before our next board and senior team retreat?” Here’s another nominee:

Book #6: Serving as a Board Member: Practical Guidance for Directors of Christian Ministries, by John Pellowe (click to order from Amazon)

My standard response to this question is to ask a series of questions. What books have your board members already read? Any new board members? Any stuck-in-a-rut board members? Do they need the basics on governance, or a kick-in-the-vision? Is it time for an inspirational book on decision-making and spiritual discernment? Are they readers or listeners? (Time for a video?) Are board members way too busy? Then maybe just a really, really skinny book—with big print and lots of white space? Faith-based or not?

I’ve often recommended John Pellowe’s book because he speaks with requisite governance mileage—not theory. As CEO of the Canadian Council of Christian Charities since 2003, he’s seen his fair share of boardroom challenges.

Based on a seminar, and a DVD of the same title, the book is one of the best Christ-centered governance books available. Right from the get-go in the first chapter, “Readiness to Serve,” Pellowe speaks to the hearts of future board members about passion and calling:

   • “If the ministry’s mission is not closely tied to your interests, your board service will be a draining experience…”
   • “The Holy Spirit can nudge us towards those good works that God has prepared for us to do (Eph. 2:10); this nudging is usually described as a call.”
   • “God’s individual call is normally in line with the gifts that you already have.”

He adds, “You really should be able to think theologically about the mission, governance, and leadership of the ministry you are serving. If you are new to the Christian faith, you may not yet be well enough equipped for board service in a Christian ministry.”

The book’s format is unique with the voices of other experts blended into sidebars. Pellowe sprinkles in his personal insights and stories (like his home church board meetings!) every few pages—fascinating stuff! Example: His story on page 126 on the “Bad” 3 Rs: boards that waste enormous amounts of time on “Reviewing, Rehashing and Redoing.”

It’s tough to pick just one favorite quotation or paragraph—but this grabbed me:

“You must be diligent as a director. Make sure that you ask any questions that are on your mind. As the saying goes, the only bad question is the one you had, but didn’t ask. You may think that since you have a banker on your board, you do not need to ask any financial questions because someone else is looking after that. It is your duty to ask these questions anyway. Do not rely on someone else to do your thinking.

BOARD DISCUSSION: What does it look like—in the middle of discussing a tough board issue—for us to “think theologically about the mission, governance, and leadership” of our ministry?  

MORE RESOURCES: Check out the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson, including Lesson 39, “Invest ’10 Minutes for Governance’ in Every Board Meeting.” 

Tuesday, August 28, 2018

Best Board Books #5 - Owning Up: The 14 Questions Every Board Member Needs to Ask

Here’s a very, very practical book (in my continuing series on best board books)—with serious pokes-in-the-ribs for your board. Guaranteed!

Book #5: Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan

Governance Guru Ram Charan wrote in 2010, “The financial crisis of 2008 laid bare a long buried truth: that many boards do not really own the strategy of their company.”  So rate your board on a scale of 1 to 5 (5 is high). “How strongly does our board own our strategy?"

That’s just one of 13 other pokes-in-the-ribs from the author of numerous other business and governance books including The Attacker’s Advantage and Boards That Lead.

The author says that “if you have no appetite for risk, you shouldn’t be on a board; it will inhibit the CEO from making bold and necessary moves and potentially company-saving bets.”
The “go-to adviser” for corporate boards and CEOs, Ram Charan, says that boards must “own up” to its accountability for the performance of the organization and reinvent the content of their work and modus operandi.  He preaches, “Governance now means leadership.” 

Board governance often has fuzzy boundaries and is never easy—but this excellent author/authority has 14 cringe-type questions. Charan doesn’t waste words—firing this question onto the board table in the first paragraph of Chapter 1/Question 1, “Is Our Board Composition Right for the Challenge?” 

He writes, “The role of the board has unmistakably transitioned from passive governance to active leadership with a delicate balance of avoiding micromanaging. It’s leadership as a group, not leadership by an appointed person.” He adds, “With the right composition, a board can create value; with the wrong or inappropriate composition, it can easily destroy value.”

He recommends that every board member and board prospect complete a “skill assessment matrix” to assess the board’s overall strengths and weaknesses. “The process is important because a board full of generalists is not good enough anymore,” he warns. Reference checking of board members (well beyond the basic level) is now an absolute necessity. The biggest red flag to avoid: a board nominee with a big ego.

The discussion of board member succession is worth the price of the book. Insights: 1) the process may take up to three years; 2) many CEOs are limiting their service on other boards to just two, or often just their own board; 3) to get the right mix of board members—for rapidly changing needs—many boards are encouraging incumbents to step down early. (Not easy—but critical.) Perhaps most critical: “Board service is always more attractive when the prospective director knows the board has its act together—that the board is thorough in covering its bases and functions well as a group.”

Effective boards will want to use this book at an annual board retreat—or address one or two questions per board meeting over the next year or more.  The book can also be read topically, based on your current hot issues. I started with Question 13, “How Do We Stop From Micromanaging?”  All 14 have zinger qualities to them. My favorites, based on my board consulting work, include:
   • Question 11: How Can Executive Sessions Help the Board Own Up?
   • Question 12: How Can Our Board Self-Evaluation Improve Our Functioning and Our Output?
   • Question 2: Are We Addressing the Risks That Could Send Our Company Over the Cliff?
   • Question 4: Are We Well Prepared to Name Our Next CEO?
   • Question 5: Does Our Board Really Own the Company’s Strategy?

The best practices for the strategy question are both brilliant and practical—but the CEO will need to dramatically increase face time with board members. But the pay-off could be huge. He notes, “Strategy should always be in the back of directors’ minds. It helps to have the strategy brief or a two-page sheet of bullet points in the binder for every meeting.”  

Then Charan cautions us, “If the board and the CEO have lasting substantive differences, they have a choice: stay with the strategy or replace the CEO. Consider that management has a shelf life too, just like the strategy.”

BOARD DISCUSSION: After reviewing Charan’s 14 questions, what is the most important question we need to address at our next meeting? Will answering that question require a spiritual discernment process--or are we just too timid about addressing it?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.

Saturday, August 25, 2018

Best Board Books #4: Stewards of a Sacred Trust

Here’s a very helpful book on CEO selection
—as part of my series on “best board books.” But note—read this well in advance before your current CEO retires, resigns, or is terminated.

Book #4: Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations, by David L. McKenna

What makes this book, published by ECFAPress, so timely, practical and readable? Who but an octogenarian can get away with segmenting ministry CEOs into these six descriptive categories?  McKenna says that boards:
   • Love Patriarchs 
   • Admire Prodigies
   • Respect Achievers
   • Tolerate Caretakers
   • Pity Bunglers 
   • and Shun Pariahs. 

The book features informative and accountability-focused checklists at the end of each chapter. Twenty-two chapters. Twenty-two checklists. The lists alone are worth the price of the book.

McKenna ably defines and balances the solemn duty and sacred trust of a board member.  He writes, “Election of the CEO separates Christ-centered organizations from other organizations because it is a sacred trust. While the professional standards for the search process must be the same for all organizations, Christ-centered organizations have a spiritual dimension that cannot be denied. For good reason, ‘cookie cutter consulting’ should be vigorously resisted on presidential search in Christ-centered organizations. Likewise, attempts to spiritualize the process at the expense of professional integrity cannot be tolerated.”

Every board chair and CEO should order and read this book. You may not need it today, but unless your CEO is named Methuselah, you will need it eventually.

BOARD DISCUSSION: Dr. McKenna used six memorable names to label different kinds of CEOs. Do you agree with those categories or have you observed other types? 

BONUS QUESTION: In Ram Charan’s book (watch for my next review), Owning Up: The 14 Questions Every Board Member Needs to Ask, Question #4 asks, “Are we well prepared to name our next CEO?”  So…if our CEO ended up in heaven next week (good news/bad news), is our board prepared?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here. And view the four short videos with your board in the latest ECFA Governance Toolbox Series No. 4 on succession planning. Click here.

Tuesday, July 31, 2018

Best Board Books #3: Best Practices for Effective Boards

Here’s a very helpful Christ-centered governance book—as part of my series on “best board books.”
Pick one that fits your board’s culture and needs.

Book #3: Best Practices for Effective Boards, by E. LeBron Fairbanks, Dwight M. Gunter II, and James R. Cauchenour. Read my review here.

The total years of board leadership and board service for these three co-authors would rival almost any other trio. The best practices have been culled from 1) a lifetime of service as a denominational education commissioner (working with 54 educational institutions in 36 countries), 2) as a board chair and business leader, and 3) as a seasoned pastor/author and board member.

With almost 40 pages covering 11 documents in the appendix, you could skip the book and strike gold in every resource: “Leader Effectiveness Review Grid (22 leadership behaviors),” “Board Standing Policy Manual,” “Rules of the Road for Christlike Conflict Management,” and a “Board Survey” with 22 questions.

Can a book that articulates Christ-centered character standards for board members also meet the high bar of governance excellence? Yes! The guts of the book, 12 chapters, include helpful discussions on:
   • “Ears In, Fingers Out” (great shorthand for the board role)
   • “Take Time” (slowing decision-making down to hear from God)
   • “Yes! to Missional Change” (choose your battles wisely)
   • “Role Models of Generosity and Stewardship” (why board members must set the pace in generous giving and inspiring others to give)

In his chapter, “Yes! to Missional Change,” Pastor Dwight Gunter asks “How many Christians does it take to change a light bulb?” His answer: “Seven. One to change the bulb and six to resist the change.” (Insert “How many board members…” and it’s just as funny.)

Co-author LeBron Fairbanks, founding director of BoardServe which serves as a global intervention and coaching resource for boards, shares my favorite quotation in the book—this from a CPA firm: 
“In the long run, only integrity matters.
In fact, without integrity, there will be no long run.”

BOARD DISCUSSION: What is the next book our board should read? What is the next book our staff should read—a book that would help them clear up many of the myths and misunderstandings about the board’s role versus the staff’s role?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.

Tuesday, July 24, 2018

Best Board Books #2: The Imperfect Board Member

Over the coming weeks, I’m recommending some of the most insightful books on board governance—some “secular” and some Christ-centered. Pick one that fits your board’s culture and needs.

BOOK #2: The Imperfect Board Member: Discovering the Seven Disciplines of Governance Excellence, by Jim Brown (click here to order from Amazon) - You can read my review by clicking here

Patrick Lencioni wrote the foreword to The Imperfect Board Member and quotes the author: “A greeter at Walmart gets more orientation than most board members ever do.” Too true!

Brown’s seven disciplines of board governance are memorable:
   • Direct
   • Protect
   • Connect
   • Expect
   • Correct
   • Select
   • Inspect

With big print, mind-grabbing graphics, and a story line in the tradition of Ken Blanchard and Patrick Lencioni books, you’ll value the author’s seven disciplines in this leadership fable about business boards, nonprofit boards, and faith-based boards. Interestingly, the “guru” in this fable is a pastor of a large church—and he’s governance-savvy.

Jim Brown, a board consultant (visit Strive!) writes, “The best boards keep their noses in the business and their fingers out!” He adds, “The only way a board can responsibly do its job without meddling is by monitoring very well.” This story tells you how to do that.

Why is this on my “Best Board Books” list? 
   • The story format means your board members will actually read the book.
   • The story is just 156 pages (plus very helpful resources).
   • Memorable one-liners: “Boards don’t need to hear how busy the CEO is—they need to hear about results.”

One bonus: The graphic on page 41 gives the clearest picture of how communication, authority, and accountability work together when board members are also customers. Brilliant.

BOARD DISCUSSION: The author writes, “Beware of the ‘board of protectors,’ because it will focus on minimizing risks rather than maximizing opportunities. Boards must direct and protect.” How would we rate our board on balancing risk and opportunities?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.

Friday, July 13, 2018

Best Board Books #1: Boards That Lead

Board members and CEOs often ask me to recommend the best book on board governance.
Of course—one size doesn’t fit all. There is no one “perfect” book for every board. It depends on many factors, as Dan Busby and I point out in “Lesson 38: Great Boards Delegate Their Reading” in Lessons From the Nonprofit Boardroom.

How would you rate your current board members’ competencies and experiences?
• Do most have previous board experiences that were healthy (not dysfunctional)?
• Does your board agree where they are on the continuum from Policy Governance® to hands-on boards? 
• Is there alignment with the 10 or more traditional roles and responsibilities of the board?

Your answers would help me suggest the “best” book for you—whether for everyone to read before your next board retreat, or for a quick “10 Minutes for Governance” book review by one board member at your next board meeting.

Over the coming weeks, I’ll suggest some of the most insightful books on board governance—some “secular” and some Christ-centered. Pick one that fits your board’s culture and needs.

BOOK #1: Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem

You can read my book review by clicking here. Here’s a taste: Learning boards will discover vast insights and practical next steps in Boards That Lead:

   • Boards should ask new CEOs to draft a succession plan immediately (and the annual self-assessment should measure progress).
   • Caution! Leaders can change dramatically when they get the brass ring.
   • Nothing can make up for the wrong choice of CEO.
   • Ten principles for finding the right CEO (Warning: “Review outside consultants carefully to prevent conflicts of interest.”)
   • In risk management, why quantification alone is a false crutch.
   • The value of a one-pager with agenda/decision highlights sent before every meeting
   • The learned art of what to feed to the board
   • How to coach new board members to stay at the right “altitude” in board meetings
   • How to get maximum value from an advisory council or board (They quote Roger Kenny who says advisory boards are “like the Marines: They get you on the beach.”)

And then this PowerPoint-worthy wisdom: 
“Execution is where management starts and the board stops.”

BOARD DISCUSSION: Is our CEO “feeding us” the appropriate and right amount of information, inspiration, and context for our “heavy lifting” topics prior to each board meeting. What do you appreciate? What would improve this process?

MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.