For nonprofits, an effective board is crucial

Content taken from Nonprofit Spark. VoiceAmerica Talk Radio Network. 30 Sept 2010. 11 PST.

Host-Renee McGivern, www.voiceamerica.com

written by Sarah Van Dine

The Center for Volunteer and Nonprofit Leadership's CEO was featured last week on Nonprofit Spark, an online radio talk show dedicated to igniting nonprofit learning and connections with host Renee McGivern.  With 32 years experience in nonprofit management, Davis was able to provide insight on the vital components for nonprofit boards.

When asked to describe the key duties of a board member, Davis described that “for most executive directors and board members, we collectively feel that the best board member is someone who brings money, attains contributions, brings contacts and positive attention to the organization, and brings a certain expertise while diversifying the board composition.  While that is true, it is only a part of the role because the role is also around governance.”  Board members in California legally have a responsibility to uphold a duty of care—attending and participating in board meetings, of loyalty—acting in good faith on behalf of the organization, and of obedience—following organization bylaws and articles of incorporation.  

One of the best ways to insure that the duty of loyalty is upheld, Davis states, is to have a Conflict of Interest policy in place.  Although such a policy is a best practice for board management, it is not necessarily transferred or known by nonprofits.  Yet Davis says that a Conflict of Interest policy is “often misunderstood.  It is really not meant to say that you (as a board member) can or can’t participate, but it is a disclosure statement” so if a conflict of interest does arise, the board member knows it is their responsibility to voice that conflict and for the remainder of the board to decide what they should do.

Another key aspect of board governance is ensuring that the nonprofit organization is fiscally responsible.  Yet, as host Renee McGovern points out, most people do not know how to read organization financial statements.  Davis agreed.  She said it is “very important for all nonprofit organizations to have somebody in their organization on staff, or as a volunteer,” who does understand that information, and that the executive director knows enough to ask the right questions.  However, an organization can also teach its board members in this area.  Davis said that is not uncommon for the Center for Volunteer and Nonprofit Leadership to walk their board through forms, encouraging members to ask questions and start a dialogue.  “You can look for an organization like ours in your community where they offer workshops or training where you can send your board members to learn.”

Davis went on to speak about the crucial relationship between board president and executive director.  “There are very distinct roles for both the executive director and the board president, with boundaries, and it is important for both parties to know what those are, to understand them, and to respect them.”  This relationship is an odd aspect of nonprofit work because although an executive director is hired and fired by the board and reports to them, it is the executive director’s responsibility to ensure that they are doing a good job in managing the organization. “Communication is paramount to this relationship.”

If you are a nonprofit in the Bay Area seeking support for your board, the Center for Volunteer and Nonprofit Leadership provides Board 101, 201, and Strategic Board Recruitment workshops as well as a free-for-members board referral service.  Please go to www.cvnl.org to learn more.