Nonprofit Boards: Confused or M.I.A.
Businesspeople who volunteer to serve often fail to fulfill their duties, say nonprofit leaders
(page 1 of 2)
“When I look back on it,” says John D., the former executive director of a small but prominent nonprofit in Honolulu, “the board of directors just really didn’t understand what their role was.” He pauses for a moment, his face assuming a pained expression. “In some cases, they made their job more difficult by micromanaging the staff. But they also didn’t take care of their basic responsibilities, like raising funds or strategic planning. In the end, they made it impossible for me to do my job.”
His is a common sentiment among the leaders of Hawaii’s nonprofits, particularly those from small- and mid-sized organizations. Many executive directors, CEOs and even some maverick board members say privately that their boards are poorly prepared, misinformed and often burdened with damaging misconceptions about their roles. The result is a lack of clarity about the relationship between the board and the executive director, and about their respective responsibilities. Inevitably, this confusion leads to conflict and limits nonprofits’ effectiveness. And if you listen to Hawaii’s community of executive directors, it’s the boards of directors that are mostly to blame.
It’s true, some nonprofit experts are more circumspect. For example, Holly Henderson, who, as executive director of the Weinberg Fellows and Castle Colleagues, has helped train hundreds of executive directors and board members in Hawaii, believes these problems are an inevitable part of the evolution of a nonprofit. “What I see a lot of,” Henderson says, “are boards that aren’t working anymore. And although there are individuals who want to blame somebody, sometimes it’s just the same as blaming a kid of for growing out of a pair of shoes. Because, what works at one point in an organization’s life doesn’t work at another point. And it’s not necessarily anybody’s fault.”
She also notes that business people make up the bulk of nonprofit board members, and that they’re volunteers, often taking valuable time away from their companies and families. “You have people who want to help the community by volunteering their time,” she says, “and they’re not happy to be told they’re not doing a good job.”
Henderson’s perspective draws on the work of the nonprofit expert Karl Mathiasen, who divided nonprofits and their boards into three stages of development:
- Small, informal “organizational boards,” dominated by the nonprofit’s founders;
- Larger, more independent “governing boards” that begin the process of formalizing rules and procedures; and
- Large, sophisticated “institutional boards,” replete with standing committees and many of the attributes of a for-profit corporation.
Holly Henderson, who helps train nonprofit leaders, says conflicts
According to Mathiasen, these transitions, particularly from an organizing board to a governing board, are often fraught with conflict. To make matters worse, as Henderson points out, executive directors and board members may evolve at different rates. This, she says, is why so many executive directors complain about their boards.
To some extent, it was always so. Several years ago, the Hawaii Community Foundation did a survey of executive directors to understand why turnover was so high among nonprofit leaders. “The No. 1 complaint that came out was the board,” says Christine van Bergeijk, the foundation’s vice president for programs. “There was really a great deal of sentiment that executive directors were all by themselves, and the board members were merely cheerleaders. The EDs said they needed the board to roll up their sleeves and do some of the hard work.” Board members, in other words, aren’t living up to their end of the bargain.
Of course, that’s only one side of the problem. Executive directors, for example, deserve a share of the blame. Many, particularly if they founded the organization, preserve their power by keeping their board members in the dark. And there’s a whole other story to be told about the level of professionalism among the leaders of the nonprofit community. So, the incompetence of board members isn’t the only problem facing nonprofits. “It’s true that our board is kind of passive,” says a board member from a small educational organization, “but I think the members would work with the executive director if she really needed help.”
It’s certainly telling, though, that although many executive directors were willing to share their complaints, none were willing to do so on the record, citing a fear of reprisals from their board or the inability to get nonprofit jobs in the future. Many also worried that public criticism would damage their ability to raise funds. For that reason, we’ve disguised the identities of most of the executive directors cited in this article as well as the organizations they run. Of course, this anonymity makes it difficult to gauge the validity of their complaints. But the striking uniformity of their criticism gives them credence.
For this story, we interviewed the executive directors, staff members, and members of the boards of more than a dozen nonprofits. We also spoke with some of Hawaii’s most respected nonprofit experts and consultants. Over and over, they brought up the same tales of board members who didn’t understand their roles or failed to embrace their responsibilities. Here are the three major areas where Hawaii’s nonprofit boards come up short:
This chart from the Aloha United Way shows the responsibilities
“All my board members are just friends of one another. For ‘board orientation’ all they get is a pat on the back and a copy of our last annual report.”
—Noelani K., executive director of a social services provider.
“Too often, board members treat meetings like a social club. They don’t seem to take the work or the mission seriously.”
—Tom K., executive director of a nonprofit intermediary organization.
“We’ve had the same chairman of the board for 10 years.”
—Mary N., CEO of a cultural organization.
“The board members absolutely refuse to attend any kind of board training. Even though none of them have any experience, they all say they already know everything there is to know about how to run a nonprofit.”
—Amy L., executive director of an environmental organization.
It starts by picking the right board members. All too often, executive directors complain, new members are selected because they’re friends of other members. Except on some large institutional boards, little strategic thinking goes into identifying candidates and courting them to see if they’re a good fit. The result is often undersized, homogeneous boards that lack the skills needed to govern an organization responsibly.
This also poses problems for potential board members. For business executives contemplating joining the board of a nonprofit, it’s not simply a matter of whether you want to serve, but whether you’re a good fit. Amy Hennessey, a former board member for Community Links, a Honolulu organization that served as a sort of incubator for nonprofits until it closed earlier this year, says that means asking questions. “You want to ask about their expectations: ‘What’s your fiscal structure? Are you in financial difficulty? What’s your plan for the future? What are your expectations for my involvement on this board? How much of my time do you really need? In other words, what do you need from me in terms of time, money, intellect – all that?”
Of course, those questions rarely arise from new board members. Even worse, board members, even after they’ve been selected, are rarely told what’s expected of them or given an adequate orientation to the board’s duties. And, as one executive director pointed out, “There’s never any discussion of the division of labor between the board and the ED.” Clearly, there needs to be a more thorough education of board members.
But, as Henderson points out, board members aren’t necessarily going to embrace this education. “These are often prominent people,” she says. “A lot of them don’t take well to the idea that they need training. In fact, I rarely use the word ‘training’; I usually say ‘briefing.’ ” Whatever you call it, though, board training should be an ongoing process, not just for new members. Henderson gives the example of board rotation, the use of term limits to systematically replace board members. “One of the wonderful things about board rotation is it gives you the opportunity to get the board together and to do some orientation. Ostensibly, it’s for new board members, but long-serving board members can hear it as well.”
Robbie Alm, VP at HECO and a member of several nonprofit
In most cases, though, there’s little or no orientation, and both executive directors and board members can share in the blame. “What I’ve seen a lot of, over the years,” says Robbie Alm, “is a failure on the part of everybody – executive directors, board members, board chairs – to really work out and understand what their roles are. It’s almost as if we assume we know, so we never really talk it out.” In the nonprofit literature, this is sometimes referred to as “blurred roles.” A board member from one local nonprofit put it another way: “Nobody knows a damned thing.”
Not everyone believes that boards are the problem. Tim Johns, CEO of Bishop Museum, for example, says there’s been a trend toward more and better training, so board members today have a better understanding of their roles. (It’s worth noting, though, that most of Johns’ board experience has been on mature, institutional boards.) He does note, however, that the pool talent in a community of this size is limited. “We do have a lot of nonprofits, so we may not have as many potential board members as you have in a larger community.” As a result, he says, people might be sitting on boards earlier in their careers. “If you were in San Francisco or Chicago, you might not be sitting on that type of board at that point in your career.”
Do you like what you read? Subscribe to Hawaii Business Magazine »