Much has changed in “good governance” over the past two decades. Corporate governance has moved into the global spotlight, and processes and practices have evolved – and will continue to do so. The focus on governance by larger private- and public-sector organizations has had a significant downstream effect on many smaller and mid-sized nonprofit organizations, as their Boards feel the pressure to “keep up” with their much better-resourced counterparts.
Still, the good news for our clients is that there exist, now more than ever, excellent training opportunities, well-documented examples of good practice, and leading thinkers in governance scholarship, all of which can provide continuous improvement supports for mid-sized and smaller non-profit boards looking to improve their governance practices.
At Laridae, we see a wide spectrum of formality used by both full boards and the sub-committees of non-profits, along with a corresponding variety of procedures and practices.
There are, however, a few good governance principles to keep in mind:
Develop Consistent Processes And Materials
The processes and practices of the Board, and of each of its committees, should maintain a uniformity. This means that all supporting materials (agendas, minutes) and practices (level of formality, adherence to quorum, motions) should have a standardized “look” and approach. Many organizations facilitate this by having a consistent staff member present at meetings, to take the minutes and support the Board in its work.
Respect Everyone’s Time
In practical terms, non-profits must ensure that they can effectively resource each committee (staff time and costs) and that they respect their volunteer board members’ time, along with any associated costs.
Meet Your Fiduciary Duties
Boards must ensure that they are meeting their fiduciary duties. This means that they must be able to demonstrate their due diligence, through measures such as the maintenance of complete and accurate records, to ensure that board business is being conducted appropriately. Of course, this is especially the case if a Board anticipates that a decision might need to be defended (for example, to a funder, donor, union, insurer, regulator, a member of the corporation, or in a court of law.)
Because committees have fewer participants, they often enjoy more flexibility. In other words, they can “dig in and get the work done”. This enables the overall board to conduct its business more efficiently and to achieve better decision making. However, there is an important distinction between the work done by the committees of governance boards and the work of management.