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10 Things Every Board Member Should Know

There are plenty of lists regarding Board’s roles, responsibilities, and expectations – what every board or board member should do, etc…

We decided to take a different approach (a habit we’re kind of proud of) and create a list of the things we believe Boards should know.  After a crisis or challenge Boards have a tendency to “question” what they should have been “questioning” all along.  This list was developed based upon feedback from Board members (usually after a crisis) regarding the things they began to question.

So here we go.  10 Things Every Board Member Needs to Know:

  1. Why they’re on the Board.  What value do they offer. What unique, relevant purpose do they serve in that seat.
  2. What constitutes acceptable “performance” for the CEO and the Board?
  3. When it’s time to leave.  Let’s face it, nothing lasts forever.  Whether the bylaws has term limits or not, isn’t the point – at some point wisdom dictates you give up your seat for fresh eyes, fresh perspective, and fresh blood.  Like great athletes Board members should leave “on top” of their game.
  4. When the variance between Budget vs Actual is a “lowered” red flag.  Don’t wait til the flag is raised, it’s usually too late then – Where’s the point prior to raising the flag?
  5. Whether the board’s financial reports are presented in a “cash” or “accrual” basis.  Avoid the “I thought that was what we had in the bank” moments.
  6. If your CEO disappeared today, who would step in immediately, and keep things moving forward?
  7. The total monetary value of the CEO’s salary and benefits package. (Yes, believe it or not, there are some boards that don’t know what their CEO makes. This one deserves a separate blog – coming soon.)
  8. They only serve one term at a time.  Re-election isn’t automatic.
  9. The rate of staff turnover – particularly for key positions.  (You may consider the CEO your only employee, but if he/she can’t keep employees you may want to know why)
  10. What the staff and stakeholders think of their CEO.  Call it a 360 evaluation, stakeholder input, or whatever you’d like.  At best the average Board member sees the CEO once a month for about an hour  – is that really enough time and information to evaluate their performance.
  11. ….

We’ve found that asking these questions and paying attention to these issues reduces board apathy, increases board engagement,  and improves board performance.

By the way, we stopped at 10.  How about you offer up #11? What else do Board members need to know???

5 Comments

  1. Amanda July 25, 2013 at 6:47 pm #

    Hi,
    If I may mention, maybe some should know more on technology and solutions they could use to boost performance and reduce the related Board’s costs…
    Regards

    • Charles July 25, 2013 at 9:08 pm #

      Thanks Amanda. Great point. The lack of adopting relevant technology can be costly.

  2. Joan M. Wright August 2, 2013 at 2:53 pm #

    11. Board members should know the requirements of a 501(c)(3) organization and fiduciary
    responsibilities under IRS regulations. Board members should also be certain that the
    nonprofit carries D&O insurance.

    • Charles August 2, 2013 at 5:00 pm #

      Great point Joan. Great point.

  3. Liz Swanson August 9, 2013 at 2:01 pm #

    12. Board members should know the mission of their non-profit, how the mission is executed, and have a basic understanding of the constituents the np is serving. It’s amazing to know the number of people who join a board without really understanding the non-profit they’re serving (this speaks to board recruitment and orientation which is another topic altogether.)

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