Friday, May 22, 2015

How Long (or Short) Should a Board Meeting Be?

When CEOs gather, a common question pops up from both rookie and experienced executives: “How long should our board meeting be?”

One size doesn’t fit all, of course. I usually answer with this Q & A directed to the 16th president of the United States: "Mr. Lincoln, how long do you think a man’s legs should be?" Lincoln responded: "Long enough to reach the ground."

Ditto board meeting length: long enough to accomplish your goals.

Some boards meet monthly over lunch. Others meet quarterly for a half-day. Another common pattern: two 24-hour meetings per year, plus two conference calls per year. One board I served met from Monday 2 p.m. to Tuesday 2 p.m., so board members could fly in on Monday morning and fly home on Tuesday afternoon—just one night away from home.

Local or regional organizations have different needs than national or international ministries. I have my druthers on meeting frequency and length and I tilt more toward the underlying values described in Jeffrey Sonnenfeld’s Harvard Business Review masterpiece, “What Makes Great Boards Great.”  

After studying board performance and CEO leadership for 25 years, Sonnenfeld’s conclusion is startling. “It’s not rules and regulations [or meeting length?]. It’s the way people work together,” says the author.

Sonnenfeld studied the common wisdom on effective governance (board size, age of board members, independence, active committees, etc.)—and discovering that these “pillars” made little difference in effectiveness, the author asked, “So if following good-governance regulatory recipes doesn’t produce good boards, what does?”

“The key isn’t structural, it’s social.”

Read the article (it’s convicting) and I’m guessing you’ll wonder if your entire board governance package is time-appropriate.  Some questions:
   • Has your board invested adequate time on the “social” side of building and enhancing relationships so, as Sonnenfeld suggests, your board practices a “virtuous cycle of respect, trust and candor?”
   • Are board meetings rushed—with no time for prayer, except the perfunctory opening and closing tip of the hat to Almighty God?
   • Are big issues (including possible conflicts of interest) identified on the agenda with appropriate time to hear from God and all board members?
   • Is there a spiritual discernment process in place for inviting new board members to join this holy circle?
   • Is serious time allocated for the CEO’s annual performance review?
   • Is thoughtful agenda time budgeted for the board’s annual self-assessment process?

Again, one size doesn’t fit all. Short meetings often short-circuit effective governance. Long board meetings may be long for all the wrong reasons. 

Noting “phone-book-size board reports,” Sonnenfeld asks, “What kind of CEO waits until the night before the board meeting to dump on the directors a phone-book-size report, that includes buried in a thicket of subclauses and footnotes, the news that earnings are off for the second consecutive quarter? Surely not a CEO who trusts his or her board. Yet this destructive, dangerous pattern happens all the time.”

Like I said: convicting. 

At your next meeting begin with Psalm 90:12, “Teach us to number our days, that we may gain a heart of wisdom.” (NIV)

QUESTION: Is it time to focus on governance objectives and outcomes—and then discern perhaps a new pattern for the frequency and length of your board meetings?

Tuesday, May 12, 2015

A Board Prayer: The Least Words, The Least Intensity, The Least Volume!

After you reflect on the eight foundations of trust (Truth-Telling, Center Stage, Perceptions, The Tone of Trust, Rules, Serving, Courage, and Perseverance) in Dan Busby’s new book, Trust: The Firm Foundation for Kingdom Fruitfulness, a powerful prayer awaits you on pages 86-89.

Here’s a taste:

“Dear God...Help me to SPEAK CAUTIOUSLY.
   • Let me use the least words, the least intensity, the least volume needed to be understood.
   • Help me voice my opinions with care, strength and meekness.
   • Help me to ask good questions, open dialogue, explore options, and deepen discussion.
   • Help me to say nothing degrading and nothing that would draw lines of conflict unnecessarily.
   • Help me to affirm and agree whenever possible.
   • Help me to give second voice to a courageous and wise first-voice; those who risk presenting a new, contrary or unrefined perspective.
   • Lord, help me to accept compliments and approval with humility.
   • God, give me the grace to watch with dignity as my proposal fails, and give me humility when my idea meets with approval.”

The Lord inspired Dan Bolin, International Director of Christian Camping International, to write this humbling prayer while serving board members during an overseas trip. Last week, a rescue mission CEO mentioned to me that after sharing the prayer at a board meeting, it’s now a regular agenda item as board members prepare their hearts for God’s business by reading the prayer together.

The entire prayer is also included as a supplementary resource in the ECFA Governance Toolbox Series No. 3: Conflicts of Interest

The prayer concludes, “Grant us the joy of arriving at adjournment closer to one another because we are closer to you.”

QUESTION: When the gavel sounds, are your board members closer to God and to each other?

Thursday, April 23, 2015

Chopsticks and Fulcrums: The Board Chair/CEO Relationship

“The board chair-CEO relationship is like a pair of chopsticks,” writes Michael Naufal. “One is much more effective with the support of the other.”

Mary Hiland writing in the Journal for Nonprofit Management says that “board chairs and executive directors comprise the key leadership fulcrum of nonprofit organizations.”

So…here’s today’s $64,000 question: “How much time have these two key people in your ministry invested in enriching this critical relationship?” Have you read a book or article together, attended a governance workshop together, or consulted with other board chair/CEO dynamic duos?

My friend and mentor, George Duff, served 27 years as the president of the Greater Seattle Chamber of Commerce. He adjusted to a different board chair every year: 27 in all! His wisdom saved me!  I noticed, for example, that one year my analytical board chair would circle all the typos in the board reports. The next year, my expressive board chair would show up unprepared (no advance reading). I quickly became a student of the four social styles and learned how to leverage the ample gifts and strengths of all my board chairs (each uniquely gifted by God).

One time I observed a boardroom discussion between the CEO and his board when the CEO reported that every time the members elected a new board chair—the CEO’s time crunch worsened. He estimated it required at least 10 percent of his time each year to brief a new board chair—and learn the new chair’s leadership style.

The point today: if ministry effectiveness really does hang on a healthy relationship between the board chair and the CEO (however you label it: chopsticks or fulcrums)—it demands a serious investment of time, prayer and focus. Resources are ample at ECFA, BoardSource, Amazon and Google. (Or check out my Board Bucket page.) Plus, read Rebekah Basinger's blog, Generous Matters. She pointed out the chopsticks and fulcrums references for me.

David McKenna has a Kingdom description for this important partnership. “The board-CEO relationship is the soul of the Christ-centered organization. It connects leaders to followers, communicates vision and mission to the body, and sets the tone for the organization.” (Read more in the ECFAPress book, Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations, by David L. McKenna. By the way, McKenna was the first blogger for this column from January to May 2011 and his blogs are packed with insights.)

QUESTION: How much time are your board chair and CEO investing in supporting each other’s unique but complementary roles—and communicating those roles to the board and the staff?

Monday, April 13, 2015

There’s an Elephant in the Room—But Let’s Just Keep the Peace!

“There’s an Elephant in the Room—But Let’s Just Keep the Peace!” is the title of the “In-the-Trenches Board Interviews” segment in the new resource:

ECFA Governance Toolbox Series No. 3:

Addressing Board and Organizational Conflicts of Interest—Avoiding Trouble, Trouble, Trouble With Related–Party Transactions.

(Click here for more information.)

This 16-minute informative and entertaining DVD and the Board Member Read-and-Engage Viewing Guide addresses three critical questions about conflicts of interest and related-party transactions. The 20-page viewing guide (12 per toolbox) includes a board self-assessment tool for each question—a perfect resource for your next board meeting.

The DVD highlights how four board members address conflicts of interest and related-party transactions:

“Any surprises today? Not really. Well…not a surprise since Patricia’s pesky question was somewhat predictable. (That’s Patricia for you!) I mean…she absolutely messed up the really sweet spirit of our meeting by asking about the Brown Company contract. That wasn’t cool. No one knows that I’m an investor in that company—so I really couldn’t say anything.”

“Well…we finally, finally had an executive session (without any staff members in the room). It was long overdue for someone to ask about the Brown Company contract. I mean…Joe Brown’s wife is on the board—and they ARE generous—but it appears we have never received competitive bids. I had to have a hallway conversation with the CFO—just to get to the bottom of this.”

“I’d say one of our board’s best practices is keeping the peace. We are very mature about this. The Lord doesn’t want us to major on the minors. After all, boards can’t obsess on dotting every ‘i’ and crossing every ‘t.’ That just annoys board members and often causes hurt feelings. Policies should never trump relationships. That’s just not biblical!”

“Well…it’s my understanding that all board members must sign a ‘Conflicts of Interest’ statement every January. I’ve never signed it! Do I have any conflicts of interest? I don’t think so…but…how would you define a ‘Conflict of Interest?’”

Too often in the boardroom, conflicts of interest are either not addressed or relegated to the back burner due to more pressing concerns. Neither approach will enhance your ministry’s reputation. That’s why ECFA urges you to view this video at your next board meeting—and elevate this subject in order to elevate trust and integrity with your givers and the public. (Click here for more information.)

Is it worth the investment of time? John Wesley said,
“I judge all things only by the price 
they shall gain in eternity.”

QUESTION: When is the last time you’ve had an open and transparent discussion about board and staff conflicts of interest—and the perception of conflicts of interest? 

Tuesday, April 7, 2015

A Dynamite Idea for Your Next Board Retreat

At your next board retreat, here’s a value-added exercise to engage every board member.

STEP 1. Three to four weeks before your board retreat, give every board member a copy of ECFA President Dan Busby’s new book, Trust: The Firm Foundation for Kingdom Fruitfulness. (Read my review on Amazon.)

Busby enriches our understanding of trust in four major areas—with a simple, but powerful premise:
“Christ-centered ministries with Trusted Governance,
Trusted Resource-raising,
and Trusted Resource Management
experience elevated Kingdom outcomes.”

Who sets the tone at the top for trust in your ministry? How is your ministry perceived by donors, volunteers, the media, and the public? Busby notes, “We ignore perceptions at our peril.” In his chapter on “Perceptions,” he includes a list of ten major issues that can lead to misperceptions (compensation, fringe benefits, intellectual properties, family members paid by the ministry, related-party transactions, and five more).

STEP 2. Assign relevant chapters to each board member—and ask each person to prepare a four-minute chapter review. (The book has 21 short chapters, plus a meaty introduction.)

Trust features more than 100 memorable quotations, including:
   • “A Christ-centered ministry that lacks trust is like a teenager running through a fireworks factory with a lit blowtorch.  It isn’t whether something is going to blow up—it’s just a matter of when.” (Busby)
   • “Trust is the starting point for all healthy relationships, the fuel for team ministry, and the cornerstone of group effectiveness.” (Stephen Macchia)  

STEP 3. At the beginning or end of each hour of your retreat, spotlight one board member and his or her four-minute review. (Mandatory! Set the four-minute alarm on your iPhone—and, perhaps, award a Starbucks card for stopping before the bell.)

Imagine the engagement! After your board members have prepared their four-minute presentations—they will have already invested, perhaps, their most serious thought ever on the Kingdom linkage between “trust” and fruitfulness.

STEP 4. Following each chapter review, if you have time, allocate two to three minutes for Q&A and feedback. (Trust me. The content in Trust will energize the dialogue.)  For example, in “low-trust” organizations, Busby warns that you’ll find:
   • Internal dissension. “Without trust, the office dissension machine runs at full speed—and divides a ministry against itself.”
   • Disengagement.  Staff work in silos and “they shift from joyful service to turf protection.”
   • Turnover. “When trust is low, turnover is disproportionately high—ministries lose the people they least want to lose.”
   • Fraud. “Low trust encourages a small theft; if they don’t get caught, they may take it to the next level.”

There’s much, much more, so read the book.

STEP 5. Before you adjourn the retreat, ask for next step recommendations. (The study guide on pages 201-204 outlines possible next steps.)

If you don’t have a board retreat scheduled in the next three to six months, you can still spotlight several chapters at future board meetings. I urge you and your board to read Trust. The chapter, “Christ-Centered,” lists five ways boards exhibit a lack of harmony including, “When problem-makers outnumber problem-solvers.”

Busby adds, “Trusted governance starts with spiritual leaders who deeply know God, seek to find God’s will, and delight to obey God.”

QUESTION: Max De Pree, a former seminary board chair said, “When things go awry, trust powers the generators until the problem is fixed.” Does your board have adequate trust to fix big problems?

Tuesday, March 31, 2015

No Margin. No Mission.

Board members and CEOs often tell me they get pushback on cost-cutting initiatives with pious-sounding rebukes from staff members: “Is this a ministry or a business?”

My opinion: that’s a big-waste-of-time question.

Jesus never asked that question.

Let me explain. Here in North America, we enjoy the luxury of tax-deductible giving. That’s good news and bad news—because the associated nonprofit machinery has muddled the biblical principles of doing God’s work.

One of my favorite seminary profs reminded our class, “We’re nonprofit, but we didn’t plan it that way.”

Another colleague weighed in, “Nonprofit is a tax category, not a management plan.”

Last week I heard a board member succinctly describe the issue in four words:
“No margin. No mission.”

When staff members, or volunteers, or even board members push back on the importance of profit, margin or cash reserves—it often means we’ve missed opportunities along the way to discuss biblical money principles. Questions like “Is this a ministry or a business?” trumpet bad theology and ill-informed core values about money management.

So is it time for a “no margin, no mission” discussion?

• Discuss what the Bible says about money, including Proverbs 21:20 (TLB), “The wise man saves for the future, but the foolish man spends whatever he gets.” According to Greg Laurie, “The Bible offers 500 verses on prayer, fewer than 500 verses on faith, and more than 2,000 verses on money.”

• Discuss sustainability from a biblical viewpoint (Luke 14:28-30) and from a nonprofit viewpoint. (Example: Talk about the four quadrants of mission impact and sustainability as described in Nonprofit Sustainability.)

• Discuss cash reserves. According to the ECFA 3rd Annual Nonprofit Governance Survey, about one-third of ECFA-accredited organizations have operating reserves of six months or more. Almost 84% of board chairs would like to have at least three months of reserves within the next 18-24 months.

• Discuss the future.  Read Ron Mattock’s 2008 book, Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength. Every chapter includes “Five Great Questions for Your Next Board Meeting.”

QUESTIONS: Are you getting pushback on the way your ministry manages finances? Is the push-back based on bad theology or ill-informed money management approaches? Is it time for a time-out and a transparent discussion? Who should lead that?

Wednesday, March 25, 2015

Do You Need a Consultant or a Pastor?

This revelation may shock my colleagues and clients—but not every governance issue can be solved by a consultant or a new book.

Those of us with platitudes, PowerPoints, and preachy epistles on best practices, need to take a breath occasionally and take a boardroom backseat—and just listen. (Yes, I’m looking in the mirror.)

Listen for heart issues, not just health issues. Listen for pain, not just problems. Listen for God’s voice, not just the loudest voice. 

Let me explain. 

Independent Sector has just declared there are 33 principles for good governance and ethical practice. The short version is available free as a two-page PDF.  The 86-page reference edition, Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations, is sold online.

Don’t misunderstand. It’s good stuff!  The 33 principles are organized into four major categories: Legal Compliance and Public Disclosure, Effective Governance, Strong Financial Oversight, and Responsible Fundraising. Here’s a taste:

  • "8. A charitable organization must have a governing body that is responsible for reviewing and approving the organization’s mission and strategic direction, annual budget and key financial transactions, compensation practices and policies, and fiscal and governance policies."
  • "24. A charitable organization should spend a significant amount of its annual budget on programs that pursue its mission while ensuring that the organization has sufficient administrative and fundraising capacity to deliver those programs responsibly and effectively."

But wait! Before you lead your board down one more governance resource path (“the management by bestseller syndrome”), take a deep breath and ask yourself, “Is our most fundamental problem organizational or spiritual?” 

Do You Need a Consultant—Or a Pastor?” describes my memorable experience leading a governance workshop.  When a CEO whined about his board and asked me a very, very long question—the Lord nudged me to share a very short answer. (The board needed a pastor.)

I’m just saying. Of course—keep reading the literature, but slow down. Listen to the underlying issues in your boardroom conversations. 

QUESTION: Do you need a consultant—or a pastor?