Board Governance Essentials

According to a 2017 report from the Stanford Center for Social Innovation, more than half of all nonprofits struggle with board governance. In fact, it was the most common area of strategic leadership that organizations reported struggling with – higher than funding, talent, and impact.

For any nonprofit, the following board governance strategies can be helpful:

Board Training. Ensure your board is intimately familiar with the bylaws of your organization and that new members are trained in all rules and policies as they are onboarded. When the bylaws are updated to comply with state and federal requirements, make your board aware of these changes and their impact. Your board should understand and comply with New York State requirements covering conflict-of-interest issues. Annually, they should update and sign conflict-of-interest disclosure forms.

Financial Tools. Equip your board members with the tools and data they need to help you make smart decisions and confident plans. These tools should provide the board with a clear picture of real-time financials, budget (vs. actuals) and audit recommendations.

Recruitment and retention. Include the diverse next generation of candidates in your board recruitment strategies. In 2021, a BoardSource report estimated that 80% of board members are 45 years or older, and less than 20% are millennials. When evaluating board composition, consider asking the following questions:

  • Is our board representative of the populations we serve?
  • How can we engage diverse next generation candidates who are digital natives?
  • Are our board members regularly evaluated on how well they meet responsibilities?
  • Can our board members agree on fundamental issues?
  • Is the size of our board too big or too small to meet its objectives?

Best practices are to have the Executive Director and Board Chair interview new candidates, assess their strengths and weaknesses, and present responsibilities clearly. Do not hesitate to make changes to the board when you identify skill gaps or board members who fall short of expectations.

Backed by a strong culture of board engagement and sound planning, these strategies can help your organization maximize the effectiveness of your board and enrich the experience of each member.

This article originally appeared in the July 2023 issue of BBB Foundation News.

Jaime Rapps Jaime Rapps, CPA is a Partner at Grassi and brings nearly 15 years of audit, accounting and tax experience to his role. A member of the firm’s Nonprofit and Healthcare practices, he specializes in financial reporting, audits, reviews, compilations and tax work for clients in these industries. Jaime advises a wide range of nonprofit organizations on financial, operational and compliance matters. He has extensive... Read full bio

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