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Building a new not-for-profit organization: Board development

By Paulette Vinette, CAE
June 15, 2009

This is the fifth in a series of articles focusing on key steps in building a solid not-for-profit organization. As referenced in the first four articles, we have relied on the excellent information offered in the Government of Canada's Primer for directors of not-for-profit corporations (Rights, Duties and Practices) for the content of these articles. Chapter five deals with board development.

There are five parts to this article on developing your board of directors.

1. Screening new directors

All organizations should screen all new volunteers, including potential board members. This is part of your due diligence work. "Duty of Care" is the legal principle that identifies the obligations of individuals and organizations to take reasonable measures to care for and protect their participants. Groups need to understand that Canadian courts will uphold their responsibilities with regard to screening in the context of their "Duty of Care."

Board recruits are often colleagues of existing or past board members, or prominent people in some way, and some staff and/or volunteer leaders feel uncomfortable asking them to take part in a screening process. However, if professionally and intelligently implemented, your screening process should send a message to potential board members that yours is a high-performing organization. Business and professional organizations will have a different set of questions than a charity that uses volunteers to deal directly with the vulnerable persons the organization supports. Yet getting background information on the eligibility of an individual to fulfill the director role in question is reasonable and an effective risk management strategy.

For more information on Duty of Care in the Government's Primer, click here. To access some succinct advice on how to create an application form and interviewing elements, you can read an article that appears on the CharityVillage site, entitled Methods of screening potential volunteers. To read about Volunteer Canada's Best Practices Guidelines for Screening Volunteers click here, and to read Public Safety Canada's Best Practice Guidelines for Screening Volunteers click here. It is important to focus on what the individual can contribute.

2. New director and board orientation

A common mistake that new organizations managed by busy people make is to not schedule time for new director and board orientation sessions. The benefit of board orientation is that all board members know important information about the organization and about the board's roles and responsibilities. This is especially important for new directors who deserve to have a base knowledge about the organization to assist them in good decision-making. The content of base knowledge is suggested in the next section.

New board orientation should take place in a one-on-one or small group meeting to allow the new director to ask questions and be briefed on history that may not interest the entire board. A best practice would be to assign the new director a "buddy" - another experienced director who could be a mentor and a person to turn to when additional information or background is needed.

Annual board orientation is also recommended. A review of the information available in the board manual is a good refresher, pointing to the items that were updated during the past year. This provides an opportunity for board members to ask questions and do some brainstorming. The annual board orientation should also review where you are in implementing your strategic plan and what lies ahead in the short and long term.

3. The board manual

The board manual is crucial to the orientation and training of new and current directors. Board manuals should be well planned, well organized and well used.

Initially, the board manual serves as an important orientation tool. It provides new board members (and returning board members) with useful information about the organization, the board, and the staff. For the remainder of the director's term, the manual should be an indispensable tool and central resource about the organization and the board. High performing organizations post the manual to a board-only section of their website for easy access.

Some of the items that should be included in a board manual, as listed in the Government's primer referenced earlier, are:

• names of board members, their biographies, terms of office, and a statement of their responsibilities;
  
• a list of committees and task forces, with their terms of reference, timeframes and membership;
  
• a brief written history of the corporation and/or a fact sheet about the corporation;
  
• Letters Patent, supplementary Letters Patent and bylaws;
  
• mission and vision statements;
  
• strategic framework or plan, and the current annual operating plan;
  
• minutes from recent board meetings;
  
• board policies (e.g., conflict of interest, insurance coverage, expense reimbursement);
  
• the prior year's annual report and audit report;
  
• current annual budget and latest financial statement;
  
• banking resolutions and investment policy;
  
• current list of major funders or partners and/or stakeholder map;
  
• organizational chart and staff information;
  
• annual calendar; and
  
• promotional material and website information.

4. Board evaluation tools

High performing organizations conduct regular evaluation exercises. Click on this link to read the CharityVillage article entitled Evaluating your not-for-profit organization. This article deals with evaluating the work of your organization. However, you should also plan to evaluate your board and chief staff person's performance. Another CV article explains Board assessment? Why bother?

A qualified evaluation team should conduct evaluation exercises versus one individual. This reduces the risk of one person's bias in conducting an evaluation.

1. Board self-evaluation
   Board members are given a written evaluation tool and asked to evaluate their own performance against agreed-upon criteria (e.g. job description). Their evaluation is then review with an evaluation team.
   
   
2. Board team evaluation
   Board members are given a written evaluation tool asking them to evaluate their effectiveness in working as a team. It is recommended that an independent third-party analyze the collective responses to provide objectivity.
   
   
3. CSO evaluation
   
   The Chief Staff Officer (executive director, chief executive officer or other such titles for the senior staff person) should be provided an annual performance evaluation. As explained in the article referenced above, the CEO is typically delegated responsibility for executing (implementing) board policies, administering, and managing the organization. Evaluation of the CEO's performance should be based on the job description and performance objectives negotiated annually between the board and CEO. These should be linked to the strategic and annual operating (business) plans and budgets. CEO job descriptions will vary by the type and size of the organization. However, they generally include duties related to executive support to the board; planning and organization; policy development; program/service management; financial administration; risk management; human resources management; and, board, staff, and community relationships.

Board and CSO evaluation tools can be found through Internet searches.

Another CharityVillage article that might assist readers working on building a new not-for-profit organization is How staff can support their board of directors.

5. Succession planning

High performing organizations plan the succession of their leaders as much as possible. One popular way to do this is to create an expectation that successful terms in a particular office will provide an individual an opportunity to advance to a next level. Examples include:

1. Executive committee
   Once a director is elected to serve on the executive committee of the board, a successful term as vice chair intends that the individual would advance to chair.
   
   
2. Committee chair
   Once a person is named vice chair of a committee, it is intended that the individual would advance to chair. What is key is that the individuals being groomed to rise to the next position possess the key skills required to do the job well. This is likely to include:
   
   
   • Leadership skills
     
   • Consensus-building skills
     
   • Meeting management skills
   
   If they do not possess the required skills, they should not be named vice chair in the first place.

6. Conclusion:

Many of the ideas offered in this article could be developed into more detailed articles. Let us know what you would like to know more about.

Paulette is president of Solution Studio Inc., a consulting practice that serves the not-for-profit association community. Paulette co-authored two manuscripts on risk management & not-for-profit organizations and regularly conducts risk management, strategic planning and board development workshops. She can be reached at 1-877-787-7714 or Paulette@solutionstudioinc.com.

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