Exploring Board Development: Part Two – Critical Success Factors
In Part One of this article, I discussed the five dimensions of board development and proposed a definition. This article continues the exploration of board development, focusing on how it benefits nonprofits and the critical success factors. The ideas presented in both articles are based on the findings from my recent study involving conversations with numerous executive directors and board members.
The Benefits of Board Development
Effective board development efforts result in getting the basics right, building a board infrastructure, becoming more strategic, attracting investment and social capital, and engaging with the community in powerful ways. In recounting how their boards improved, each study participant mentioned some aspect of board responsibility, better meetings, more board ownership, committee functioning, governance policies and practices, clarity of roles, leadership, team-building, diversity, and/or fundraising. Interestingly, there also was no one improvement that was common to all. Effective board development yields benefits relevant to particular organizations at particular times in their evolution. The implication is that the underlying principles of change that work to engage board members in fundraising can also work, for instance, to move a board out of micro-managing operations to a more strategic role. And, just like any developmental process, boards are never “done.”
The benefits of an optimally functioning board are clear. Research shows boards influence organizational effectiveness (Nonprofit Board and Governance Review, Temkin, 11/4/09). Study participants’ experiences reinforced this: “It makes a huge difference.” “It board development turned the whole organization around.” “They are more critical than they know they are. . . . with board development they come to understand how the board is critical to the success or failure of the organization.”
Critical Success Factors Underlying Effective Board Development
Whether executive director, board chair, or board member, I frequently hear: “I want to take my board to the next level.” The “next level” is unique to each organization. As reported above, it can be done, but what does it take? Most of the requests continue with: “Will you come and do a training for the board on roles and responsibilities?” or Will you facilitate our board retreat? Here is the agenda we have worked out.” This helps (see below) but it is not enough.
I have observed and directly experienced nonprofit boards of directors “improving” over time. There are dozens of books written by practitioners and consultants that describe the characteristics and practices that make an effective board. The work of Richard Chait et al., raised the bar for us all with their insights proclaiming and demonstrating governance as leadership. Building on that work, BoardSource convened governance experts nationally who succinctly identified the principles and practices that make an exceptional nonprofit board (The Source: Twelve Principles of Governance That Power Exceptional Boards, 2005).
It isn’t that we don’t know what an exceptional board looks like. The benefits described above reflect many of those characteristics and we know boards develop. But how? What are the critical success factors underlying effective board development? How does a group of well-intentioned volunteers reach their “next level”?
Three Critical Success Factors
The study revealed three critical success factors. It is noteworthy that almost all the study participants mentioned these three factors. No one is more important than the other two.
1. Outside governance expertise or training – a “nudge”
Having an outside consultant or facilitator interacting with the board or key board leaders contributed to a new vision of what the board could be. “We recognized we could get better.” “We set expectations higher.” “It took someone from the outside to give us the benchmarks of a healthy board.” Although not as impactful, there can be as similar result when a few board members attend a training on governance away from the organization (e.g., attend a conference or special presentation by a local nonprofit MSO). Thus, the common request for training to “take my board to the next level” is a good place to start but not enough alone.
2. The Board Chair
We know purposeful organizational change requires leadership. However, if it is the board you want to change it is the board chair, not the executive director, who must lead the process. In every case of effective board development in the study, the board chair played a critical role in creating movement and building momentum for the change. Importantly, this was in partnership with the executive director but it was not led by him/her. Typically, the board chair engaged a few other board members, building a small group of champions for change. The board chair “drove the agenda for better structure and better processes.” He was “a role model” in risking a new board role in fundraising—the “key to our turnaround.” “The President set the tone.”
When board development efforts work there is a specific, articulated intention: “We were obsessed with board development.” “Status quo was not OK.” “Yagottawanna.” “We had to choose to change.” The culture of the board—a culture of learning and improvement—enables the positive change that effective board development requires. This cultural factor was either dormant and ignited by factors 1 and/or 2 above or it was a shift in the culture itself that began the development process.
Three Secondary Factors
Supporting these three primary critical success factors were three other secondary factors underlying effective board development:
A. Changes in board functioning and structure
With intention came change and the changes reported covered all aspects of board functioning and structure. The type and scope of improvement was related to the unique needs and context of each organization. Small, incremental changes begot more changes, and momentum was built.
B. Recognition and celebration of success
Positive change and momentum were supported by recognition and celebration of successes. This was a conscious, purposeful effort that fueled excitement and engagement.
C. Team building
As the boards were changing and evolving, many were strengthening relationships among the board members and developing a sense of unity and identity as a team. Several people reported increased trust levels and improved interpersonal dynamics—all of which supported the developmental process.
Effective board development is not a linear process. It is not dependent on the characteristics of the organization or the life cycle stage. For some organizations, board development is urgent and transformational, for others it is an ongoing evolution. Indeed, boards of directors need to evolve and change as the organizations they lead evolve and change. It is hoped that this discussion of one study’s findings will help nonprofit leaders know what to think about and how to begin when they want to take their boards “to the next level.”