GOOD GOVERNANCE AND THE NONPROFIT DIRECTOR
12/13/11 // Martin Thoma
Business pros are often asked to serve nonprofit boards for their proven expertisein legal, accounting, marketing, finance, management. But our business acumen is often equaled only by our ignorance of nonprofit governance.
Nonprofit board leadership is a profound responsibility. And its a deeply meaningful way to impact your communitywhile building your own personal brand and that of your business. After serving a number of nonprofits including recruiting for and chairing the board of the Arkansas Symphony Orchestra, I have observed several principles that can contribute to your becoming the most effective servant-leader possible.
Just say no. First things first: it you cant spare the time, dont take the baton. Many people are not prepared for the sheer number of hours necessary to serve fully in the role of ambassador, policymaker and fundraiser. Symphony directors can expect to spend from three to seven times as many hours in committee, at events and on special projects. (Your experience may vary!)
Noses in, fingers out. Success in business means plunging in, taking charge, acting decisivelyexactly the behaviors that fail on boards. When directors start turning knobs and flipping switches in the organization, train wrecks await. The role of the board is to envision, oversee and enable. Your job is not to run, nor even help to run the organization. A quick and common pitfall is to judge, evaluate or even coach staff members. This ones easythats the CEOs job, not yours.
Dont be a Pollyanna. Your job is to evangelize. But youre not supposed to be blind. Every time a nonprofit gets in trouble, people look at the mess and say, Where was the board? Champion with all your might, but ask tough questions, insist on clarity and hold the staff and fellow directors accountable. As a director, you own the balance sheet. Difficult as it sometimes is, there will be times you must say no, cut expenses and force restraintdespite your intense commitment to the mission.
Dont be a baby. Spoon-feeding is for infants, not trustees. Yet spoon-fed boards are common enough, and they commonly turn toxic. Its rare that even the smartest businessperson will understand all the arcana of a complex nonprofit. But its incumbent upon every director to learn enough to ask informed questions, challenge assumptions and trust but verify. One of our directors became famous within the board for continually challenging the financial statements; now we have clearer, cleaner financial reporting.
Understand nonprofitability. Red ink drives business people crazy. But nonprofits exist because they upholdchildrens and social services, performing arts, healthcare delivery, for exampleand these services can rarely if ever be priced at a profit. At the Symphony, for instance, we have lowered ticket prices for a couple of yearseven deciding last year to make Sundays free for kids. The result is we lose more money on every ticket we sellyet weve now set paid-attendance records and dramatically increased the case for philanthropy. Explore and understand your own nonprofits business model.
Put skin in the game. Most nonprofit boards ask for a minimum financial contribution. Others suggest or leave it to the director to decide. Every board is the financial foundation of the nonprofit, and your personal investment makes you a credible fundraiser and friendraiser for the organization. Required or not, you should have a financial stake in the enterprise.
Admit your ignorance. Its unlikely that you know much about running a nonprofit, how complex and delicate the whole operation is. When Bill Vickery suddenly died after more than a decade in the drivers seat, it meant that our board had to become extraordinarily hands-on, and several of us had to make operational decisions at key junctures. I learned quickly that the exceptional lawyer, technology exec, banker or marketing guy is no match for the exquisite complexity of a symphony orchestra. Know what you dont know so you can be more helpful sharing what you do know.
Check your ego at the door. The most effective directors consistently battle and advocate for the organization and the mission; they are there for the team and not for themselves.
Identify solutions, not just problems. Every organization has broken things. Nonprofits, which run lean by necessity, may have more than most. Directors, who are often treated quite deferentially by the staff, can easily mistake their position for one of power and control. Its better to remember that you are a partner in the enterprise and not an authority. If you can sniff out a problem, then you can suggest a solution and put your shoulder to the wheel putting in the fix.
Good directing to you. In my book, its one of the most important jobs in your business career.
Martin Thoma is 2009-2013 chair of the Arkansas Symphony Orchestra board of directors and a principal with Thoma Thoma, the 2011 recipient of the Governors Arts Award for Corporate Sponsorship of the Arts. Reach him at firstname.lastname@example.org.