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.”
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.”
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.”
