Best Practices in Board Governance

Here are some key best practices your board should adopt and follow to ensure it is governing appropriately.

Recruit Board Members Effectively and Honestly.

• Ensure consistent information about your board by developing a recruitment packet that includes vital information about your organization.
• Use board job descriptions that clearly outline your expectations of the time, talent, and treasure each board member should bring.
• Establish a nominating committee that recruits the skills required to operate an effective board, not just the status quo.
• Ensure against conflicts of interest when recruiting new board members.

Train and Orient Board Members. It’s not fair to expect that board members will understand their roles and responsibilities without a thorough orientation that includes, at least:

• History of the organization and its key accomplishments.
• Legal and fiduciary roles and responsibilities of board members.
• Review of financial statements and how to read them.
• The annual strategic plan of work.
• Board and organizational policies and procedures.

Make Effective Use of Board Member’s Time, Talent, and Treasure.

• Hold effective meetings with an agenda that is focused on what needs to be accomplished on the annual plan of work.  A truly focused board meeting doesn’t need to last more than 1-2 hours at the most!
• Create committees that are required to accomplish the annual plan of work. Hold the committees accountable with written reports. Do not discuss committee work at a board meeting unless there are critical committee issues that require board action or discussion, such as a change in budget or change in the committee’s action plan that requires board approval.
• Use Robert’s Rules judiciously to keep the business of the board moving.
• Take good minutes that reflect the decisions made…and stick to them.

Allow Board Members to Resign When Ready.

• Use annual commitment letters that allow every board member to re-assess and confirm their ability to serve and commitment to make an annual financial contribution.
• Include an “escape clause” that allows the board chair to accept the resignation of anyone who does not sign the annual commitment letter.

Hold Annual Board Performance Evaluations.

• As part of the annual planning session, the board should evaluate its performance within best practices and make a plan to enhance and improve its governance.
• Use a prepared assessment template or create your own.
• Review the IRS Form 990 for what is expected of board governance.
• Include assessment of:

1. Governance and oversight
2. Fiscal and financial policies and procedures
3. Budgeting and finance
4. Fiscal controls
5. Strategic planning
6. Personnel policies and procedures
7. Management and administration

Clarify the Roles and Responsibilities of Board and the Executive.

• Ensure open and honest communication about board and staff expectations.
• Clarify HR policies and procedures.
• Clarify governance versus operation and management roles.
• Guard against micro-management of staff.

Recognize and Reward Excellence and Thank Board Members – OFTEN!

Complacent or compliant? How well does your organization board of directors meet its fiduciary and governance requirements?  If there is room for improvement, don’t despair – there are tools available to help! For samples of the following documents, please visit www.jblockinc.com for free downloads:

• Board Job Description
• Board Commitment Letter
• Board Conflict of Interest Statement
• Application for Board Membership
• A comprehensive organizational assessment tool, Exploration™-Management by Assessment