Supporting Good Board Governance
Many entities established by the State of Minnesota are overseen by governing bodies composed of citizens and/or legislators. These entities are often focused on licensing or specific interests and are uniquely different from appointed committees or advisory groups in that they are granted authority to oversee their organization. This means the head of the organization in question reports to the board, rather than somewhere within state government.
If your organization has a governing body, how can you support good governing practices? We suggest starting with specific tasks: define what governance means, clarify the governing body’s responsibilities, and provide them with the necessary information and time to determine what they need to monitor.
The most important step to take when supporting good governance in your organization is to develop a shared understanding of the purpose of governance. Consider the following: Governing well requires that a board establishes a playing field—defined by the specific external results an organization is to achieve and the risks it is to avoid—for the executive director, and then actively monitoring that the organization has operated according to those expectations.
This is useful, in part, because it focuses the board on guiding the organization’s decisions, not by making administrative decisions for the executive director, but by providing specifics on the results they expect the organization to achieve for those it serves and on the specific situations the executive director should avoid on the way to achieving those results. This focus on results and risks is an appropriate use of the governing body’s attention.
While a shared definition of governance is the best starting point, it may be necessary to further clarify the role of the governing body. Many new members mistakenly approach their governing responsibilities thinking like managers, assuming their contribution is to help organizational staff with their work (marketing, programming, etc.). The decisions and work of the organization is usually appealing to members—it is what drew them to get involved in the first place—so it can be challenging for some members to leave those decisions to staff and place their attention elsewhere. It may be useful to define the board’s responsibilities as follows:
1. Actively connect with those the governing body represents to learn their expectations of the organization and to report on organizational results.
2. Create written expectations about what to achieve for those served by the organization and what to avoid in the process because it is risky, unethical, etc., and about how the board will work together.
3. Monitor whether the organization—and the board itself—has complied with the board’s written expectations.
Note how well these three responsibilities align with a perspective valuable to the organization’s success but are distinctly different from the organizational details that should be the purview of the executive director. When the governing body sees the unique value they add to the organization by focusing on these three responsibilities, it will be easier for them to let go of their desire to involve themselves in administrative functions.
Most organizations with governing bodies must comply with the same regulations, policies, and procedures to which all state agencies must comply. In fact, some organizations are housed within state agencies, relying on the services of their human resources and finance departments, including the internal checks and balances inherent to those systems. This creates an interesting dilemma regarding the oversight responsibilities of the governing body. After all, if the governing body has the authority to hire and remove the executive director, it must have the authority to fully monitor organizational performance. Without that full scope of authority, it will not have the means of assessing the executive director’s performance, nor can it fulfill its fiduciary responsibilities. (And, while some boards and councils in state government are not the official appointing authorities, their members still need to properly monitor the organization’s performance as well as the performance of the executive director.)
Consider providing a thorough explanation of how the state already monitors the organization’s systems and processes. Then support the board as it determines what it wants to monitor for itself regardless of what the state does. This may include concerns in such areas as:
- How service recipients are treated
- How staff is treated
- Ongoing financial health of the organization
- Protection of assets
- Communication and support to the governing body
- Whether desired external results were achieved
It can be problematic for an executive director to train and support the very people to whom that person reports. MAD has the expertise and experience necessary to assist with these tasks and other initiatives that will foster good board governance.
Organizational governance shouldn’t simply drain organizational resources and staff time. It can add unique and important value to the organizations it oversees. A good place for staff to focus their support of their governing body is to ensure governance is defined, its responsibilities are clarified, and its scope of organizational monitoring is understood.
- Caroline Oliver. Getting Started with Policy Governance Bringing Purpose, Integrity, and Efficiency to Your Board. Jossey-Bass, 2009.
- Govern for Impact. “Policy Governance Source Document.” Govern for Impact, 2011, https://www.governforimpact.org/assets/article-pdfs/PG%20source%20document.pdf.
- Richard P. Chait, William P. Ryan, and Barbara E. Taylor. Governance as Leadership: Reframing the Work of Nonprofit Boards. Board Source, 2005.