Nonprofit Boards: Learn to Build Them Well

At our monthly Social Impact Advisory Group meeting, we heard from nonprofit governance and leadership expert, Mary Hiland, who empowered our group with understanding why boards matter, spotting the source of most board trouble and how to recruit and develop boards. Our host, Stephanie Shaterian, moderated audience questions which are also provided in this article.

The following presentation was edited for length and clarity in printed format.

How and why do boards matter? Because why care about them if you don’t know why they are important? I am a big proponent of evidence based practice and there are 5 way boards member, based on research. While there is a lot more research available on fundraising with respect to boards this isn’t the only way that boards matter.

Effective boards influence the performance of their nonprofits in 5 ways:

1. Organizational Decisions: These boards make better organizational decisions.  If the board is effective, all the decisions made at the strategic level are going to be better decisions.

2. Community Engagement: There will be better community engagement.  If the board is doing its job, board members are acting as ambassadors, engaging people with the mission and inviting them to become involved.

3. Heightened Reputation and Credibility: We have all read something about a board behaving badly. When you’re out and about in the community, who and how you are as a board member influences peoples’ opinions of the nonprofit you serve. You can either have a good reputation and more credibility or not.

4. Resources: This includes resources of many types, not just money (although that’s nice), but your board’s networks connect and engage with people. Resources may be someone with a special expertise or in-kind donation for your nonprofit. I worked with a nonprofit domestic violence shelter who had a young board member. He didn’t have a lot of money and had a young family. But he was good friends with the president of a mattress company. The nonprofit was desperately in need of new mattresses for the shelter. This board member was able to get brand new mattresses for them.

5. Impact: I believe board members are amazing leaders and wonderful people. When the board is effective, it is envisioning a better future in some way related to the mission — better lives, better communities. Board members work to make that a reality. I think that’s the most exciting way that boards matter.

Nonprofit Boards and the Tree Metaphor

The metaphor I use in my book for nonprofit boards is a tree. There are three dimensions that I learned from my research and from the many causes I have worked with in my 19-20 years of consulting:

1.  The Leaves are capacity.

2. The branches and the Trunk are the connections that are happening among the board members, and with the executive director if there is one.

3. The roots are the board’s culture, the hidden things that really drive what’s going on in that boardroom.

   Within each of these dimensions, there is a people side and a process side. I will show you how that works with some examples.

The Tree Leaves – Board Capacity

Most board executives who came to be for consulting help would say, “If my board could just get it… what their job was, what their roles and responsibilities are, everything would be fine. Please come teach them about that.”

What I learned is that a lot of people thought and expected that board problems would be solved by training the board, building the board by getting different board members, or by putting a policy in place. These activities are all parts of board capacity. And maybe that will work

The reason I developed this model is that it isn’t going to work all the time. There may be deeper issues with the board – such as connection and culture.  Board capacity is a legitimate issue, and you need good, strong capacity in the boardroom.

People Issues:  Some examples of that on the people side are board composition. Do you have enough people? Your board needs enough people who are willing to work and who will do the things that the board needs to do. Secondly, do you have the right people? Like author Jim Collins says, “get the right people on the bus in the right seats”. The executive director is also part of the capacity of the board. The executive director is a critical team player. I do not propose that executives be board members. But they are a part of the team at the table. The executive director is sharing information, they are a co-leader with the board in the ideal situation. The capacity of the board is related to the capacity of the executive director.

Process & Policy Issues: Most of the board’s policies and practices fall in the capacity dimension. As examples of this, we think about board orientation, board recruitment and the Executive Director evaluation. If a board doesn’t have a strong, effective processes for those things, it is not going to be an effective board. The other part of the process side of the board’s capacity is how are they managing the meetings? How are the meeting structured? Are they efficient? You must understand where the challenges are as board members and executives.

I encourage executives and boards that while you can start at the capacity level, you must see if that is going to fix the issue. If it doesn’t, you must go to the next level — relationships or board connections, this is the branch holding all this capacity and all those people together. You need a strong, healthy tree and you need healthy relationships, or your tree is going to wither. For board connections, my focus is on the executive relationship with the board chair and the board members as well as among the board. How does the board create a team? What are the processes the board uses to become a team?

This has a big difference in the quality of relationships among board members.  It is a lot different than just people coming to a board meeting occasionally, doing whatever needs to be done and then leaving.  Board members are not really connected to each other. And they don’t have a vision for the work of the board. As a collective team they are not saying, ‘This is what our job is and these are the results we’re going to create this year for the nonprofit.’ Addressing those are all qualities of an effective team.

The Tree Roots – Board Culture

I think board culture is a huge obstacle to diverse boards in our sector. Not because people aren’t trying but because they are not able or willing to surface, the member beliefs and assumptions about having diversity on the board and the values around that. People espouse it, but it never happens in the sector because of underlying cultural dynamics. The board recruitment mindset is, ‘we can’t find the people we need and want.’

Some nonprofits I’ve worked with say ‘We’re too small. The most important people that we need are on other boards. They are not going to be on our board.’ Those beliefs are part of the board culture and can be obstacles or they can help facilitate things that boards need to have. Boards rarely spend time surfacing:  What do we believe? What assumptions do we have?

On the process side, if the board’s an effective team, there are agreements, and those are part of your culture, they reflect your values. How are the values and the beliefs and assumptions influencing the way the board behaves? Culture is not just about what’s going on in your head. Organizational culture, board culture, is all about practices:  What do we do? And how does what we do reflect our values and our beliefs. This takes a lot of work to go to this level with a board.

How Do Boards Get Better?

While there is a lot out there about what effective boards look like (e.g., BoardSource, Consultants, etc.), there was no research on boards getting better. So, I did my own study and I interviewed people who had been on boards (mostly board members), but also executives. These were the three factors that came out in the study:

1. The Nudge: If you’re a consultant to nonprofits and you are doing training on capacity, you can help boards get better. This is the first nudge and can raise awareness, as we all know that change processes start with awareness. The nudge can come from the executive director as well, asking a question or it can come from going to a workshop.

2. The Intention: After the nudge, people on the board say, “we need to be better.” There’s a collective buy-in and actual intention to do something about it. The people I interviewed used the word intention saying, ‘we intended to improve in that area.’

3. The Board Chair: After the intention, the third critical success factor was the board chair. I discovered that other board members would not buck the chair, they wouldn’t get behind it, if the board chair said, ‘no, we don’t need to change that. No, we don’t have the resources or the energy or the capacity to take that on.’  There were many times when an executive said I had to change the board chair, or the board had to change the chair for us to build momentum on the project.

Board Recruitment

There are five elements of an effective board recruiting system.  Mindset, Prepare, Identify, Assessment and Select & Elect. I will highlight a couple of them that I have found are important and areas that are not done well. I created this board recruitment system out of a consulting practice with 10 nonprofits who asked me to help them recruit. I did it for several years and saw how effective it was for these organizations.

1) Mindset:  Boards and nonprofit leaders must re-set limiting mindsets.  It’s also one of the key success actors that I see missing too often. Boards and executives say these limiting beliefs:

• “We’re small – we can’t attract influential community members to the board.”

• “We can’t attract influential community members.”

• “People don’t have time to serve on a board.”

• “We’ve tapped all our networks; there’s nowhere else to go.”

• “We need people to fundraise, and no one wants to do that.”

• And more…

These are real statements that board members have made. What I found in some of my research earlier was that board members tend to go in their comfort zone. They don’t stretch to go beyond that when they are thinking about reaching out and talking to people. There is a whole process for how you eliminate or reduce limiting mindsets on the board.

This is an element of your board culture that you need to surface because these are obstacles to recruiting the right people and being effective in recruiting.

2) Preparation: There are four things you need to prepare before you can recruit effectively.

• Leadership:  You need a hub, and this can be the Governance Committee or an ad-hoc committee. There should be a core of board leadership that is coordinating and is the champion of the recruitment effort. It is an ongoing process. This isn’t something where you have two vacancies now, you convene a group and recruit. You want to create an ongoing pipeline of prospects for your board. If you don’t have positions on the board, you can engage those people on board committees. You can engage them as volunteers in other ways. Leadership is critical. It doesn’t mean the whole board isn’t involved. It means that there’s a hub where all the information about prospects, all the information about interviews, exploring who people are, how they meet your criteria, and prioritizing them — all that happens in this leadership hub. So having that in place before you start is important.

• Strategic Plan:  It isn’t about the document, it’s about the agreements. You need to have agreement organizationally, about the strategic focus of your organization. If you can answer the question: If we’re successful and advancing our mission over the next three years, what results will we accomplish? Does the board have a role in helping achieve those goals? And if we do, what is our role? That drives the board’s action plan, the board’s goals. When you have that in place, you can say, ‘Who do we have to be as a board to achieve this work? What’s missing? Where are there gaps in our own leadership and our own team, for getting that work done? That is what you need in place before you start recruiting. Next, you ask, ‘who are we recruiting? What are we recruiting for? What are the competencies that we’re recruiting for that we need on the board? What are the connections were recruiting for that we need on the board? That becomes the priority criteria for new board members. So, you must have this second thing in place in order to develop that.

• Board Member Expectations: You have agreements about board member expectations. What are our attendance expectations? How many meetings can you miss?  Duty of care as a board member says that you must participate. That is a legal obligation of a board member. What are your expectations about contributions, fundraising, if you have any? Are board members required to serve on a committee? These are all the most common ones, but you need to be explicit, and your board needs to agree on them together. This isn’t something you fudge because you want to invite this person to be on the board. That doesn’t work and it undermines your team.

3) Identify (Get Out of Your Comfort Zone): To be prepared to recruit, you must get out of your comfort zone to identify people. You cannot depend solely on people you know.  There are your direct contacts, your volunteers, your board members, your former board members, your clients and your network out there. Then, you must identify indirect possibilities for finding the people you need and want. This is one of the areas that gets missed and it’s out of your comfort zone. You need to go talk to people you don’t know and you need to say, ‘who would know these people and who would be connected to them?’

Then, focus on talking about your mission and encouraging people to want to be part of that. You will find people and identify prospects if you do this and get out of your comfort zone. This is the second step is to do this assessment correctly.

4) Assessment: This is where you’re matching what you need (roles, responsibilities and opportunities) with the interests, talents and gifts of your prospect. When we sit down with the prospect, do we talk all about our nonprofit? Or do we ask them questions about them? Generally, we are selling our nonprofit more than we are inquiring about them and their interests. We are in a good position to match their interests to what we need, versus selling what we need to them and influencing what they say to us.

5) Select & Elect: The final step in our process is to decide whether we will elect this person. The leadership team is prioritizing candidates by the ones that match what we need best. It takes time to do that assessment.

That areas that I noticed the most is there is no awareness of mindset, there is too much selling to your prospects and not enough assessing, and board don’t have a full system. When I did my research on board recruitment, I learned that board members were reinventing the process every time they had vacancies. They didn’t have a process or a system in place.

 Characteristics of Effective Board Recruitment:

1. Designated ongoing board leadership

2. Prospect criteria related to your strategic goals

3. Consistent process for connecting with prospects

4. Clear and consistent steps to assess “fit”

5. Ongoing process creating a pipeline

Our moderator, Stephanie Shaterian collected questions from our audience which are summarized below.

Stephanie Shaterian, “Do you have comments or research about resolving disputes within the board?”

Mary Hiland, “Whoa, that’s a huge question. And a lot depends on why the dispute is there and how deep it goes. What is the source of the conflict? Is it a values conflict? Is it a personality clash? Is it just a disagreement about what is the effective way to do things? There are suggestions I have in the book about really exploring the cause of that.  If it’s personality clashes, then you need to look at the board connections, you need to look at good practices for building relationships. How do you talk about those things? How do you bring it out? Can we agree to disagree? How are we going to handle this? If you have a trust-based environment in the boardroom, you’re going to be able to raise those questions and talk honestly. If you do not, then it’s going to be harder to have those honest conversations.”

Stephanie Shaterian, “You talked about the importance of a board chair. That’s assuming the executive director is the one asking how do we improve the board function? It seems the executive director also must be committed to the board partnership. Can you talk about getting the executive director to see the board as a partner, as opposed to the enemy?”

Mary Hiland, “In my own practice, I believe in the potential of boards, and executives who don’t want a strong board will not work with me. And they do exist. The core is the relationships where board members can reach out to the executive director and start with, ‘how do I support you? How do we work together in a collaborative leadership relationship? It is really hard for board members because you’re also the executive’s boss. However, working collaboratively with the board and creating a strong leadership team should be and is part of the executive’s responsibility. In my book, I say ‘love your board’ and I mean be excited and nurture your board. I have seen executives who have a strong board, and a great, collaborative relationship. Their job is easier. Someone has to convince the executive that it’s worth it and it matters. If your executive is a control freak and wants to do it all him or herself, you are not going to have a lot of luck.”

Stephanie Shaterian, “I’m on the board of a charter school management organization and they are covered by The Brown Act, so all of our meetings are in the public domain. I find that it’s sometimes challenging for the board to do their work when they’re in the public domain. Do you have any thoughts, experience, or recommendations if this came up at all in your research?”

Mary Hiland, “Unfortunately, I haven’t had the opportunity to work with boards in all these years that are under the Brown Act. But I think the principles of being an effective team apply, and with good leadership, particularly the board chair, recognizing and modeling good it, as well as building a team in front of the community would be a great thing. I don’t think it has to be an obstacle to behave well and be an effective leader in front of the team. Board members should understand their job is leadership. They are envisioning the future; they also see reality and are responding. They are engaging others to act, and they need to self-reflect and self-manage. Those are four key functions of leadership that boards need to adopt. So maybe changing the paradigm about how the board thinks about its role, and its leadership function could help them cope better and be more effective in public?”

Stephanie Shaterian, “Do you think part of the reason board members “sell” prospects on the nonprofit versus focusing on the prospect’s interests and talents (assessment) is due to a scarcity mindset?”

Mary Hiland, “Absolutely. If you do that mindset step, that helps the board get past that. You may think this is too “woo-woo” or silly, but one of the ways I address mindset when I’m working with boards is to turn all those limiting beliefs into affirmations. I tell the board members to practice them every day while they are in the recruiting mode. I’ve gotten statements from board members that that has made a huge difference.”

Stephanie Shaterian, “I’m seeing (because of the pandemic) the new reality that people are willing to be on boards outside the general location and nonprofits have not necessarily embraced that yet. I am wondering if that is a way to deal with the scarcity issue and your thoughts on that?”

Mary Hiland, “It’s a great issue. This whole issue of ‘how much are we virtual? And when are we going to change? Or are we going to change?’ This is being debated in boardrooms everywhere. I think part of the challenge is that it hasn’t been decided, in many places, whether they’re willing to be virtual. If they are, I absolutely agree that it provides more of an opportunity. I work with some virtual nonprofits, and they have a very geographically diverse board. It really does provide a new opportunity. Like anything else, getting virtual in the board room is opened a new way of thinking about things. I encourage boards to offer that opportunity to people. It does have implications of whether you are ever going to be together and that really helps build relationships. I am ambivalent about saying it’s the right way to do it, but it does provide an opportunity.”

Stephanie Shaterian, “Can you speak to a board of advisors role as opposed to a board of directors role.”

Mary Hiland, “Oh, they are very different. The first step is never used board when you’re talking about an advisory group.  Use council or use whatever you want. The Board of Directors is a legal body, and it is a governing body of a corporation. There are legal responsibilities for each individual member. An advisory or another collective group is one you’re bringing together to help with your mission or to support some aspect of your organization. They are not legally required to do things. If you go to my website blog, you will find two blog posts about advisory groups: 1) What to think about before you form them and 2) How to do them.”

Stephanie Shaterian, “If you could share a happy story of a board that’s gone from total dysfunction to thriving.

Mary Hiland, “My favorite story is where they actually hired an executive from out of the country. They had a very command and control board chair and really started to go in the wrong direction in terms of giving too much power to the board chair. The board chair and the executive began to have conflict. The executive was a driver and she told me, “I’m digging in my heels. I am not going to resign as executive.” I was working with the board, and I was coaching the executive. I must give her credit for her tenacity. As the board became more aware, they realized they were all very committed to the mission, and they were focused on the executive’s success. Something happened that I have never seen happen before. Not only did the board chair step down, but she also left the board. I really give her credit for having self-awareness to make that choice, because I’ve seen many times where executives just resign. It’s a great board now and they’re still learning.

Stephanie Shaterian, I do not speak for my entire generation, but I am a millennial and serve on a board. In talking with friends who I know would make excellent board members, there’s a barrier. I think a lot of it is just like a lack of knowledge and some preconceived notions about what it means to be on a board. I think boards have the work to do to be more open and transparent about what it means to be a good board member. There’s a lot of work to be done to be more transparent and educating folks about what it means to be a board member and what board members are looking for. That is the intentionality piece we speak about Mary and being really open about how people can serve the organizations and the missions they are passionate about. That is one perspective, from the millennial generation, of which there are many.

Mary Hiland, “I was on a board where we brought in four or five new members. More women that had ever been on the board before, more people of color than had ever been on the board before and dropped the average age by about 10 years in the process. It changed the culture of the board. A lot was intentional, but some was just the experience of seeing how these different people behaved on a board within a set of reasonable norms. It shifted the culture.

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