Professor Harrison welcoming you back to the leadership and governance of non profit organisations, and Week 3 of Course 1. In our research, one of the most common challenges reported by board members and those they work with is a lack of clarity about what the board's role and responsibilities in the organization should be. This week's topic on board roles and responsibilities and nonprofit organisations addresses this critical question. This short lecture on the board's role and responsibilities in organizational governance will address the following questions. What roles do board members play in nonprofit organisations? What are boards responsible for? What are the different models of organizational governance and which model is right for my board? Finally, what issues challenge the role and responsibilities of boards in nonprofit organisations? And I'll conclude with questions to frame our peer to peer discussion this week. The first question, what rules do board members play in nonprofit organisations was introduced last week in Professor Murray's lecture. In that lecture, he talked about the duties board members must perform because they are legally responsible for the actions of the organization, as defined by regulators who allow it to exist and give it tax exempt status. In addition to the fiduciary rule, board members play a number of other roles on the board and in their organisations. Three key roles nonprofit board members play are decision-maker, and evaluator, implementer and advisor. Let me talk about each one. All board members of nonprofit organisations play decision-making and evaluation roles. While boards can decide to delegate operational responsibilities to a top manager and executive director, or chief executive officer, or a lead volunteer if there is none, but they cannot delegate monitoring and evaluation functions. In this role, board members review and discuss information about the organization, often shared with the board by staff and the manager. And board members also vote on motions put forward to the board. In some cases, board members may implement the decisions the board makes. For example, recruiting and selecting board members and a new CEO, or participating in fundraising drives and activities, or advocacy and community outreach efforts. This type of work is often carried out at the level of individual board members or task forces. Another role board members often play in nonprofit organisations as advisor, providing information and expert advice to the board and the CEO. This advice can come from professional knowledge and training in areas such as law, finance, accounting, IT, and also from professional experiences in the public, private and non-profit sectors. To clarify, the boards role, all those involved must understand the basic responsibilities of boards. And the most common areas of responsibility are listed here on the slide. In the first area involves the mission in the big picture strategic questions, why the organization should exist? Who it should serve, what services it should provide, and the values and ethics it should follow in providing them. It also involves setting strategic goals and priorities in the broad plans for achieving them, as well as assessing performance to see how it all worked out. In understanding any challenges and opportunities that lie ahead for the organization. The second area on fiscal and legal oversight involves ensuring the organization behaves in a physically and legally sound manner. And it involves overseeing budgets and investments and compliance with the various law. Does it apply to the organization and risk assessment attempts to identify areas that subject the organization to high risk in either its assets or its reputation. The third area is one of the most important responsibilities of a board of directors is ensuring that it's selected the right CEO and that that person is performing the job competently. Community relations on the other hand often referred to in the literature as boundary spanner, really involves representing the interests of the organization externally and ensuring that the interests of key external stakeholders are made known inside the organization. It also involves establishing alliances and partnerships with others that could benefit the organization and the community. And the next area around resource development, ensuring the organization has enough resources to achieve it some purpose. And management systems are the systems in place to ensure the organization is managed efficiently and effectively and is following its own policies and has adequate structures in place. And finally, board self management focuses on ensuring the board is as effective and as efficient as it can be in fulfilling the governance function. Before I answer the question, what are the different models of organizational governance, let me first define what I mean by a model. I think Gil provides a good definition in his book, A Directors Guide To Good Governance. And a model is a distinctive set or cluster of governance structures, responsibilities and practices. And by structure, he's referring to the parameters for selection and operation of the board established by legislation, regulation, bylaws and policies. Responsibilities refer to the functions, what boards do. Those responsibilities that I spoke about in the previous slide and practices refer to how boards do it. The governance process which he says is often based on assumptions about good governance practices. Understanding the various roles board members can play and the kinds of matters boards might get involved in is the first step to achieving clarity about what the board should do. However, there's this temptation to assume that there's a single pattern of board responsibilities and roles that is best for all nonprofit organizations. The limited research on what makes for an effective board suggests that there is not. In fact we'll look here now at several models or common patterns of board roles and responsibilities and discuss when each may be appropriate and these models are the working board, governance only board and mixed model board. There are times when it is quite acceptable to have board members who simultaneously participate in setting the strategic direction of the organization and then managing the implementation of those plans and carrying out the actual work of the organization. The term for a board like this is a working board and this is a board that consists of members who are very committed to the organization and very knowledgeable about what the organization does and how it works. Board meetings and working boards tend to be focused on whatever the most important issues facing the organization are at the time, and these could be governance or management issues. This type of board is very appropriate in the early stages of an organization. It's also appropriate when the organization is an all volunteer organization or when the services provided are few and fairly straightforward. Self-help groups and small advocacy grassroots organizations. Only have working boards. What are the downside risks of working boards, and when are working boards effective? Well, one of the risks of a working board is the perception by staff and volunteers, that the board is meddling in the day to day activities of the organization. Another risk is board burnout from trying to do too much work. And of course, there's the risk of never having enough time, to focus on the big picture strategic questions. But working boards are more likely to be effective, when everyone is clear on who is doing what, and what things are important. And when whole of board meetings focus, or tease out the governance issues from operational matters. Issues around planning for the future, setting broad objectives and priorities, and assessing how well it all worked out. What are the downside risks of working boards, and when are working boards effective? Well, one of the risks of a working board is the perception by staff and volunteers, that the board is meddling in the dayto day activities of the organizacion. Another risk is bored burnout from trying to do too much work. And of course, there's the risk of never having enough time, to focus on the big picture strategic questions. But working boards are more likely to be effective, when everyone is clear on who is doing what, and what things are important. And when whole of board meetings focus, or tease out the governance issues from operational matters. Issues around planning for the future, setting broad objectives and priorities, and assessing how well it all worked out. A governance only board, is aboard that restricts itself to providing leadership, by focusing on those basic strategic questions. Those responsibilities around vision, and mission, strategic goals, and priorities, and the board restricting itself to this decision making and evaluation, as its primary role. A governance only board is most appropriate, when the organization is large, provides complex services, and is mature in its life cycle. It's also appropriate when the organization is managed by competent, professionally trained managers, and staff. What are the downside risks of a governance only board? Well, we have 5 risks, one of them being the chance of the board becoming a rubber stamp for management. Another is that, board members are not knowledgeable enough about the business of the organization, to fulfill their decision-making roll. And that the board actually loses touch with what's happening on the ground, and in the organizacion. And that staff and volunteers don't really trust the board, because they are at a distance. And that the board itself and it's governance, can become inflexible. The secret of an effective governance only board, really lies in developing a shared understanding of the basic levels of policy, and deciding which of them are basic strategic or landmark governance issues, As Chip, Ryan, and Taylor like to say in their book, Governance Is Leadership. And devising information systems, that supply valid data on past performance and future, needs in a way that clearly relate to them. A mixed model board is neither a pure working board, nor is it strictly confined to big picture questions. Sometimes boards of nonprofit organisations become involved in operational details, and this would occur when the management and staff lacks expertise in a particular area. A mixed model board is most appropriate when there's clarity on where, when, and how board members should be involved in the organization. When there is open communication, between the board and management in the identification of gaps, or overlaps in authority, and responsibility. And it's also appropriate when meetings focus on governance not operational matters, and leaving operational matters to special meetings of the board or committee task forces. Just to summarize and address the question of which approach is right for the board. You'll find in the normative literature that some governance experts will recommend that aborted dot a specific governance model, but there's really no empirical evidence to suggest that there's one best model that fits all boards. You need to take into consideration that the board is part of the whole organizational system that includes paid managers, staff and volunteers. And the board may also have specific legislative and accreditation requirements to consider. And board is really looking for a model that is the right fit for that board it situation and the type of organization. The 4th question what issues challenge the effectiveness of boards is a question that was addressed in chapter two of Chalt, Ryan and Taylors Governance's leadership. In Chapter 2, these authors claim that boards of directors are underperforming. They use a number of key words to describe problem boards, from troubled, micromanaging to rubber stamp boards. And they say that simple solutions to board problems and you'll see a number of them listed here have rarely improved board performance. They say the field has been working on the wrong problem. Chalt, Ryan and Taylor say the focus should be on more effective governing not busier boards. And research on governance effectiveness suggests that a good place to start the process of improving governance effectiveness is through board self evaluation in a number of scholars have recommended this approach or linked to improvements in board performance. Our research shows that board performance self assessment results in greater board member role clarity and overall increases in governance effectiveness. Follow up assessments of the impact of this practice show that is both efficient and effective in helping boards decide and make change. Well most people would agree that the role of a board in a non profit organization is to help out organization achieve its mission. Differences arise when it comes to specifying exactly what the board's role and responsibility should be. And in this lecture we've discussed a number of different models or patterns of board behavior and the fact that there's really no one right model for all boards of non profit organizations. So as we head into the peer learning forms this week, some questions for you to consider how clear our boards of their role and responsibilities the boards that you know. And why do they become confused about their role and responsibilities? And what can be done to increase the clarity of the board's role and responsibilities in the value they return to their organizations?
