Monday, December 31, 2018

Best Board Books #14: Two Tools in Two Books – Part 2

In Part 1 of this two-part blog, I quoted R. Buckminster Fuller who said, “If you want to teach people a new way of thinking, don’t bother trying to teach them. Instead, give them a tool, the use of which will lead to new ways of thinking.”

That insight is on page one of Scaling Up, a brilliant book that oozes with helpful tools. My recommendation: buy the book and download the “One-Page Strategic Plan (OPSP)” tool—and it will revolutionize how your board thinks about mission alignment. (And...inspire several board members to also read Breakthrough.)

Book #14: 
Scaling Up: How a Few Companies Make It…and Why the Rest Don’t – Mastering the Rockefeller Habits 2.0, by Verne Harnish
(Order on Amazon)

The helpful tool in Nonprofit Sustainability (my Part 1 blog) was on page 25. Today’s featured tool in Scaling Up is on page 125. Easy to remember, right?

As you look ahead to the new year, you’ll appreciate Verne Harnish’s “One-Page Strategic Plan” template (11” x 17”) and his detailed color commentary. He writes, “Many people have dreams. However, a vision is a dream with a plan: a One-Page Strategic Plan.” He adds:

“To flesh out the vision, you need to answer seven basic questions: who, what, when, where, how, why, and the often challenging question, “But should we or shouldn’t we?” These questions anchor the seven columns of the OPSP. If you ever feel confused by the terminology that comes with strategic planning, always come back to these seven simple questions.

I mentioned in Part 1 that all you need to read is page 25 of Nonprofit Sustainability. But when someone on your team or board reads page 125 in Scaling Up—you will be unable to resist reading the entire book! I’ve named it my 2018 Book-of-the-Year (read my review). 

The author suggests that managers work on the SWOT analysis, but senior teams (and I would add board members) should focus energies on SWT (Strengths, Weaknesses, and Trends). 


Before your next board retreat (perhaps focused on your strategic plan), inspire board members to pre-read the “One-Page Strategic Plan” chapter in Scaling Up, plus the insightful strategic planning book, Breakthrough: Unleashing the Power of a Proven Plan, by Randon A. Samelson (read my review).
Using the six-step "strategic plan" in 1 Chronicles 28-29, Samelson also shares his insights on King David’s baton pass to his son, Solomon. This is one succession plan that actually worked! The temple was completed. Solomon thrived. Outgoing CEO David did not whine in the background.

BOARD DISCUSSION: If your CEO, senior team, and board could summarize your strategic plan on one page (11” x 17”), what kind of clarity and alignment would that then bring to your entire staff, key volunteers, and major donors? What’s your next step?

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 28, “Slow Down and Wait on God” by guest blogger Jerry White.

Wednesday, December 26, 2018

Best Board Books #13: Two Tools in Two Books – Part 1

R. Buckminster Fuller (1895-1983), the designer, inventor, and futurist, said, “If you want to teach people a new way of thinking, don’t bother trying to teach them. Instead, give them a tool, the use of which will lead to new ways of thinking.”

So in this blog and the next blog, I’m featuring two tools from two books that will enrich thinking and planning at the senior team level and at the board level. (Neither books are “governance books” per se, but a list of best board books would be incomplete without them.)

Book #13: Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, by Jeanne Bell, Jan Masaoka and Steve Zimmerman
(Order on Amazon

The helpful tool is on page 25—and for some CEOs and board members, that’s all the reading you need to do. The “Dual Bottom Line: Mission Impact and Financial Sustainability” matrix map (four quadrants) addresses two key issues with four easy-to-remember icons:

STARS: High Mission Impact, High Sustainability
HEARTS: High Mission Impact, Low Sustainability

MONEY TREE: Low Mission Impact, High Sustainability
STOP SIGN: Low Mission Impact, Low Sustainability

Board Exercise: inspire your CEO and senior team to bring a first draft of all your products, programs, and services plotted in the appropriate quadrants—then facilitate a discussion to discern if your board agrees or not. Then move to a second draft.

Also—review how many programs are in the “Stop Sign” category—and ask about next steps. 

Reminder: Jesus taught us in Luke 14:28-30, “Is there anyone here who, planning to build a new house, doesn’t first sit down and figure the cost so you’ll know if you can complete it? If you only get the foundation laid and then run out of money, you’re going to look pretty foolish. Everyone passing by will poke fun at you: ‘He started something he couldn’t finish.’” (The Message)

Also—are we adequately feeding the “Stars?” Have we invested time in rethinking how to make our “Hearts” more sustainable? Is our mission still clear to all?

For more on this powerful one-page tool, read my review of Nonprofit Sustainability, and read Steve Moore’s guest blog here on Lesson 23, “Focus on Mission Impact and Sustainability” in Lessons From the Nonprofit Boardroom: 40 Insights for Better Board Meetings.

BOARD DISCUSSION: When is the last time we held up a “Stop Sign” to a program, product or service? If it were up to you, what would we stop doing immediately—and cut our mounting losses? (Resource: share the “dismount” worksheet from my Results Bucket webpage: “Dakota tribal wisdom says that when you discover you are riding a dead horse, the best strategy is to dismount.”)

NEXT BLOG: Two Tools in Two Books – Part 2 (One-Page Strategic Plan)

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 23, “Focus on Mission Impact and Sustainability” by guest blogger Steve Moore.

Monday, November 26, 2018

Best Board Books #12: Call of the Chair

David McKenna warns CEOs and boards—don’t speed-vote an unsuspecting person into the board chair! This esteemed governance guru writes that the board chair “has responsibility for the speed, spacing, and sequence” of the governing process. (That will preach!)

Book #12: 
Call of the Chair: Leading the Board of the Christ-centered Ministry, by David L. McKenna
(Order from Amazon)

Before electing your board chair...STOP! If you’ve been around the nonprofit block for a few years, you’ve certainly experienced this scenario:

“Quick! While Jane is out of the room—I move that she be elected the new chairperson of the board, effective immediately.”

And presto! Without warning, Jane returns to the boardroom only to be handed the gavel—accompanied by the delightful dysfunctions of a nonprofit or church board of directors.

Stop the madness, says David McKenna. His book should be required reading for all ministry board chairs and CEOs. (Chairs of faith-based for-profit companies would also benefit.) Call of the Chair is jam-packed with 119 pages of wisdom, insights, and practical help for the board and their board chairs. Example:

McKenna writes that “The chair for a Christ-centered ministry must be called of God as well as elected by the board.” That would eliminate the speed-voting trick that landed Jane at the head of the board table.

“When the time comes for a board to elect a new chair,” McKenna adds, “all business should stop while the members reflect in silence and ask that the Spirit of God might give them discernment in their selection.”

Then this: “In the induction of the chair that follows, there should be the question, ‘Has God called you to this leadership position?’

“The prayer that follows should seal that call with the sacredness of the moment. If done in a consecration service for the board, its officers, and its members, the significance of the chair is communicated throughout the organization.”

McKenna cautions: “Discernment is a gift of the Holy Spirit that comes with spiritual maturity. It may well be the gift that defines Christ-centered leadership.”

That defining moment—and that powerful question—will eliminate speed-voting and will weed out chair candidates who aspire to resume-building versus Kingdom-building. 

McKenna has more—and it’s convicting: 
   • 4 assessment questions for the board chair
   • 5 deficient ways that boards elect chairs: Successor, Exemplar, Rotator, Politician, and Dissenter
   • Commenting on the Rotator chair scenario, McKenna notes: “The idea is that the ministry can survive incompetence for a short period of time.”
   • 1 priority: why being board chair must be that person’s number-one priority
   • 9 board chair roles: Missionary, Model, Mentor, Manager, Moderator, Mediator, Monitor, Master, and Maestro
  • 3 results when the board chair fails to focus on the clarity of the mission: “mushy, muddled, and almost meaningless”
  • 60 words in 30 seconds: Jesus’ elevator speech!

McKenna, retired president of two universities and one seminary, is author of numerous books, including Best Book #4: Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations. Read my review to learn how he helps boards segment CEOs into six descriptive categories (several are unsavory!).

In Call of the Chair, McKenna defines an important fork-in-the-road for boards: “A major difference between Christ-centered ministries and for-profit or nonprofit organizations is in the question, ‘Who gets the credit?’”

The Transcendent Moment

Trust me—this book is very, very convicting. But when I reached the last few pages of the book—ready to wrap it up and move on—I was blown away by “The Transcendent Moment” on pages 116-119.

Whew! I won’t spoil the drama and impact for you—but at a board meeting just after reading the book, I asked a board member (he has a great radio voice), to read those pages during the agenda segment, “10 Minutes for Governance” (a lifelong learning feature the board enjoys at every board meeting). Here’s just one taste:

“…if the board is to rise to its spiritual potential, it needs a chair who brings the personal experience of Pentecost to the leadership of the board.”

Oh, my.

I will end with this helpful metaphor: “Like a one-stringed banjo player, the chair will always sound the note reminding the members that the board’s role is policy, not execution.” How knowledgeable is our staff on the roles and responsibilities of the board—and the board chair?

BOARD DISCUSSION: Discussing the policy governance term, “executive limitations,” McKenna illustrates: “In effect, God gave Adam and Eve a policy of executive limitation, saying, ‘Go until I say stop.’ He did not say, ‘Stop until I say go.’” Are the board’s executive limitations crystal clear to your CEO and all staff?

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 22, “The Most Underrated Board Position,” by guest blogger David McKenna.

Monday, November 12, 2018

Best Board Books #11: Boards That Make a Difference

If you want to spark some healthy conflict in your next conversation with ministry CEOs or senior pastors, throw this verbal grenade into the discussion: “Hey! What do you all think about policy governance?” 

I mention this because even though the majority of boards I work with say they function as “policy governance” boards, I don’t believe them—because their micro-managing practices are so blatant.

Book #11: 
Boards That Make a Difference: A New Design for Leadership in Nonprofit Organizations, by John Carver
(Order from Amazon)

According to Policy Governance Guru John Carver, “Governing by policy means governing out of policy in the sense that no board activity takes place without reference to policies. Most resolutions in board meetings will be motions to amend the policy structure in some way. Consequently, policy development is not an occasional board chore but its chief occupation.”

Consider John Carver’s insight on what he calls the flaws of “The Approval Syndrome.” They include: reactivity, sheer volume of material, mental misdirection, letting staff off the hook, unfairly putting staff on the hook, short-term bias, lack of clarity in the board’s contribution, and fragmentation (“a sequence of disconnected and unmanageably voluminous vertical slices of the whole…instead of a holistic, manageable fabric of horizontally connected policies”).

He adds, “We all profess that boards should deal with the big picture, but it is difficult to picture the forest by inspecting one tree at a time.”

One of my favorite Carver counter-intuitive commentaries describes what happens when a board delivers a “vote of confidence” for the CEO during a crisis situation.

In Carver’s policy governance bible, Boards That Make a Difference, he writes, “Curiously, there are times when the board goes through the approval process not intending to withhold authority from the CEO but to confirm it. A board might declare its supports for the CEO by cloaking some controversial executive decision with the prestige of the boardroom. Board motivation is usually expressed thus: ‘We want the staff (or others) to know the board is really behind the CEO on this.’ As long as the board and CEO understand that the decision is truly the CEO’s, this approval not only seems harmless but appears to be a healthy show of solidarity.”

Then Carver adds this zinger. “However, such a gesture of board support is called for only if the board has been sending weak signals about the nature of delegation. This kind of support is rarely warranted if the board has made it clear to all that all CEO decisions that are within board-stated bounds are always supported by the board. Official support of a specific action implies that such sporadic backup is necessary, or conversely, that the general philosophy of delegation is weak.”

Carver notes—in his massive 340-page hardback, with another 80 pages of resources and references—that “Board approvals are an unnecessary and dysfunctional method of board control, then, regardless of the ubiquity of the practice.”  He goes on—in succeeding chapters—to build the case for “a more proactive, fair, and detrivializing approach to fulfilling the board’s moral and legal obligation to control the organization.”

If no one on the senior team or board of your nonprofit organization or church is familiar with Carver’s brand of policy governance (he invented the term), this is the starting point. Whether you agree or disagree that this board approach is right for your organization, it’s important to understand the continuum of choices available—and to seek consensus on defining your current reality and where your preferred governance future lies. 

Interestingly, the book includes an excellent “ends” policy (a big Carver term) from Lancaster County Bible Church—defining the church’s sequential priorities. Evangelism is the church’s first priority.

Note: If 340 pages are a tad too much for you, Carver has a series of booklets, focusing on niche policy governance issues. Another option is to check out the “lean and mean” approach, favored by many including myself, of a 15- to 20-page Board Policies Manual, as described in the book, Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board, by Fredric L. Laughlin and Robert C. Andringa. (See Best Board Books #10.)

BOARD DISCUSSION: Board members can’t always be blamed for governance dysfunction. Sometimes CEOs and senior team members invite confusion when they bring agenda items to the board—in essence, begging the board to micro-manage. Is it clear, in your organization, where the line falls between board decisions and staff decisions?

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 36, “Decrease Staff Reporting and Increase Heavy Lifting.”

Saturday, October 27, 2018

Best Board Books #10: Good Governance for Nonprofits

Peter Drucker preached “tool competence.” He wrote, “Although I don't know a single for-profit business that is as well managed as a few of the nonprofits, the great majority of the nonprofits can be graded a ‘C’ at best. Not for lack of effort; most of them work very hard. But for lack of focus, and for lack of tool competence.”  

Book #10: 
Good Governance for Nonprofits: Developing Principles and Policies for an Effective Board, by Fredric L. Laughlin and Robert C. Andringa (Order from Amazon)

More than any other tool or template, I have recommended the Board Policies Manual (BPM) template to hundreds of nonprofit organizations and churches. Fred Laughlin and Bob Andringa teamed up to produce this brilliant tool, the BPM. The who, what, where, when, why, and how—are all explained in their concise, but thorough, color commentary, Good Governance for Nonprofits.

The book describes the efficacy of compiling the twists and turns of board policies (some that conflict with others) into one thoughtful 15- to 20-page document that is designed to be revised at any board meeting throughout the year.

As Dan Busby and I note in Lessons From the Nonprofit Boardroom: “While many organizations have unwritten policies covering a wide range of topics, they’re often filed away incoherently in the archives and no one can find them when needed. ‘Here’s a fun job for a new board member,’ they say. ‘Please dig through 20 years of board minutes. Bring a flashlight and emergency provisions!’”

There’s a huge upside to a BPM, as Bob Andringa writes in “Do Unwritten Board Policies Really Exist?” (read the blog here). “For every hour spent on creating and maintaining a Board Policies Manual, at least three hours of board and committee meetings will be saved before too long. It’s a ‘living document,’ always reflecting the latest wisdom of the board.”

No question—this book (which gives access to the online template) is a must-have tool on your governance bookshelf.

BOARD DISCUSSION: According to Policy Governance Guru John Carver, “Governing by policy means governing out of policy in the sense that no board activity takes place without reference to policies. Most resolutions in board meetings will be motions to amend the policy structure in some way. Consequently, policy development is not an occasional board chore but its chief occupation.” Would your board agree?

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 4, “Do Unwritten Board Policies Really Exist?”

Tuesday, October 9, 2018

Best Board Books #9: Called to Serve: Creating and Nurturing the Effective Volunteer Board

Max De Pree writes,
“There is a reason why this is a small book. We want it to be useful, but not a burden.” So…here’s my ninth nominee in this “best board books” series.

Book #9: 
Called to Serve: Creating and Nurturing the Effective Volunteer Board, by Max De Pree (Order from Amazon)

I tilt towards books that lean towards the contrarian quadrant. Example: former USC President Steven Sample's book, The Contrarian’s Guide to Leadership. Before buying a book, he prefers a five-minute conversation with someone who has already read it.

So when I had a five-minute conversation with consultant and author Dave Coleman about Max De Pree’s 91-page contrarian gem, it fed my board governance book-addicted soul. I love this book and the title: Called to Serve: Creating and Nurturing the Effective Volunteer Board.

Contrarian Max De Pree (1924-2017) writes:
   • “We believe good people need reminders and an occasional nudge, not a sermon.”
   • “A good board will measure the appropriate inputs as well as the outputs. Failure to measure what matters damages our future.”
   • “My friend Jim Beré…once told me that he would serve only on boards that had hard-working executive committees.”

Commenting on board committees, De Pree notes the story of the English visitor who watched his first American football game and observed, “The game combines the two worst elements of American culture—violence and committee meetings.”

Rather than penning a 300-page snoozer, De Pree crafts a coaching conversation (a series of letters) with a young leader and his first CEO/board relationship. It’s easy reading and the short epistles are extraordinary.

Board service, writes De Pree, should be “demanding in the best sense of the word.” He lists three other characteristics of great boards:
   • Lively
   • Effective
   • Fun to serve on

CEOs will appreciate every page: “…the chief responsibility of boards is to be effective on behalf of the organization.” He adds, “Effective boards, in a nutshell: 
   • remember the long view,
   • remember that the president and staff are human,
   • and do the work of the board…”
   • Plus this: “Most of the work of the board takes place through the implementation of an agenda.”

More contrarian pokes-in-the-ribs:
   • “Many high-priced consultants will tell you to have the shortest possible mission statement. I don’t happen to think that is such a great idea.”
   • “I feel that the closer an organization comes to being defined as a movement, the closer it will come to fulfilling its potential.”
   • “I’m a great believer that management should be invited into the board’s world but that the board should not go into management’s area.”
   • “The chairperson should not permit anyone to read to the board.

Max De Pree served as board chair of Fuller Seminary—and get this—the seminary honored him with the establishment of the Max De Pree Center for Leadership in 1996. His day job was with Herman Miller, the office furniture company, where he served as president from 1980 to 1987 (and as a board member until 1995). His book, Leadership Is an Art, has sold more than 800,000 copies. (See also Leading Without Power: Finding Hope in Serving Community.)
Effective boards do very good planning, says De Pree. He lists three planning questions and then suggests who must be involved in the planning. “…some people need to be involved, to be blunt, because they are going to pay the bill.”

He balances the CFO’s involvement in planning with this: “Planning by the board ought always to include the chief financial officer, a bringer of necessary reality to the process. Of course, the chief financial officer should never have a role that stymies the vision. Some realities have priority over numbers.”

Oh, my—I could write another 30 blogs on his contrarian coaching! (In fact—I did!) See the index to the 30-blog series here.

More Wisdom:
   • “Loyalty by itself is never sufficient. You always have to link loyalty and competence.”
   • “When an organization demands true leadership and the results justify the time and energy, good boards respond with gusto.”
   • “Another crime, it seems to me, is to give really good people poor leadership.”

Trust me—this book will not disappoint. All 91 pages are packed with power. Perfect snippets for your “10 Minutes for Governance” segment at every board meeting. (You do that, right?

BOARD DISCUSSION: De Pree recommends that “Key proposals and issues like building programs or fund drives should always come to the board through its committees at least twice.” Think back for three years—has this been your practice?

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 31, “Cut the Cord! Invite Board Members to Exit When They Don’t Live Your Values.”

Monday, September 24, 2018

Best Board Books #8 – The Practitioner's Guide to Governance as Leadership

While this is not a “Governance for Dummies” book—just turn to page 13 and the classic four-quadrant chart delivers an insightful summary on four governance scenarios. Just read that page and you’ve got the big picture.

Book #8: The Practitioner's Guide to Governance as Leadership: Building High-Performing Nonprofit Boards, by Cathy A. Trower (Order from Amazon)

Governance as Leadership: Reframing the Work of Nonprofit Boards, by Richard P. Chait, William P. Ryan, and Barbara E. Taylor (Order from Amazon)

Note: The Practitioner's Guide to Governance as Leadership (2013) is a deep dive into the 2005 book, Governance as Leadership. I’d suggest you read one, but not both.

The books describe four basic scenarios for nonprofit boards and three types of governance.  

“Governance by Fiat” is the first scenario. That’s when trustees displace executives. Here the board does staff work. Sometimes the staff is incompetent so the board jumps in. Often the board enjoys staff work.  Either way, it’s dysfunctional.

“Governance by Default” is the second scenario. Here both the trustees and the nonprofit executives disengage. No one has their eye on the governance ball—and the important work of governance is minimized. Left undone, it’s a train wreck waiting to happen.

“Leadership as Governance” sounds good, but it’s cockeyed. Here the nonprofit staff displace the trustees. The CEO and/or senior team make decisions that should be in the governance arena. This happens frequently with founder-led organizations and “good old boy” boards. Often, the organization appears to be operating smoothly. Internally, this dysfunction never ends well. Sooner or later, someone will pay.

The fourth scenario is the healthy one, what the authors call “Type III Governance.” Here the trustees and executives collaborate. Each understands their appropriate roles, but unlike most boards, the staff affirms the board members when they upgrade to “generative thinking.”

So what’s “generative thinking?” The authors use a variety of definitions to explain this cognitive process of excelling boards: sense-making, reflective practice, framing organizations, personal knowledge, etc. I liked “sensible foolishness” the best. 

Generative thinking goes beyond “fiduciary governance” (Type I) and beyond “strategic governance” (Type II).  This “Type III” approach typically involves three steps: 1) Noticing cues and clues: different people can take the same data and arrive at different meanings; 2) Choosing and using frames: understanding the “fuzzy front end” of a product development process, for example; and 3) Thinking retrospectively: the counter-intuitive high value of “dwelling on the past” to understand patterns that might impact the future.

“Generative thinking is essential to governing,” the authors note. “As long as governing means what most people think it means—setting the goals and direction of an organization and holding management accountable for progress toward these goals—then generative thinking has to be essential to governing. Generative thinking is where goal-setting and direction-setting originate. The contributions boards make to mission-setting, strategy-development, and problem solving certainly shape organizations. But it is cues and frames, along with retrospective thinking, that enable the sense-making on which these other processes depend.”

Yikes! Think about this final zinger from the authors: “And a closer examination of nonprofits suggests something else: Although generative work is essential to governing, boards do very little of it.

BOARD DISCUSSION: The authors comment, “in their ‘day jobs’ as managers, professionals, or leaders of organizations, trustees routinely rely on generative thinking, so much so they have no need to name it or analyze it. They just do it. But in the boardroom, trustees are at a double disadvantage. Most boards do not routinely practice generative thinking.”  They add, “When it comes to generative governing, most trustees add too little, too late.” Do you agree?

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 38, “Great Boards Delegate Their Reading.” 

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.