Governance as defined in the dictionary: the action, manner, or system of governing. The term governance is interpreted differently by our individual life experiences, both good and bad. In the non-profit sector, governance also has several meanings, but the most likely connotation of the word relates to “board governance”, which is the focus of this conversation. What constitutes good or bad governance? This is also subject to interpretation but the starting point should be the bylaws of the organization. The bylaws, if properly written and adopted, should provide a roadmap for the organization’s structure. How many board members are dictated in the document? (There is usually a stipulated minimum and maximum number). What are the length of terms, number of terms that can be served? What officer positions are required? (Chair Person, Vice Chair, Secretary, Treasurer or Finance Chair, etc.)
These are usually unpaid volunteer appointments. What are their responsibilities?
They should be responsible directly to the board of directors and lead annual initiatives such as developing a budget with participation from the president/CEO, and his/her staff, strategic planning, and direct oversight/supervision of the president/CEO that includes an annual performance review. What is the mission statement for the organization? What is the vision statement? Do they reflect the guidance established in the bylaws?
Thus far, you may be thinking, yes, of course. That is what is expected. Unfortunately, far too often, that isn’t what happens. These board positions are often held by individuals of prominence and influence in the community. They are accustomed to running their successful businesses, sitting at the helm, and making most of the decisions unilaterally. Now they are making decisions as a group with majority rule, and hopefully, with gentle guidance from the CEO to ensure the board remains focused and constant in its policy delivery to its membership.
The decisions that the governing body make must consider many factors that are affected by the local political climate, the nature of the policy decision, the potential reactions by the business community it represents as well as those of the political leaders. Are their financial implications related to the decisions? (How many staff members will be needed to execute the policy, and how much staff time will be required?)
As an example, the Chamber of Commerce is usually the “go to” organization in any community that is sought for its position on politically sensitive occurrences. Who is charged with the responsibility of disseminating the policy decision and how? It should be the CEO or in some cases, the Chair of the Board.
There are many other factors to be discussed but we will save those for another day.