All about the board: purpose, structure, productivity
Share
An organisation, whether for-profit or not-for-profit, is required to have a governing body, which we usually call the board of management, management committee, or more commonly, the board of directors. Modern corporate governance requires members of a governing board to be aware that they have certain legally-required (fiduciary) duties, including duties of care, loyalty and so on, which are unfortunately often overlooked.
‘Governance’ and the board
The phrase ‘governance’ often refers to the board’s activities in overseeing the purpose, plans and policies of the association, such as establishing the overall strategic direction, supervision of the CEO, ensuring sufficient resources for the organisation, ensuring compliance to rules and regulations, representing the association to external stakeholders, and so on.
The nature of board ‘operations’ and ‘governance’ usually depends on a variety of factors, including the board model being used, the desired degree of formality among board members, and the life stage of the board and the association – a relatively new association will have a different board ‘look’ to that of a mature board that has been operating for many years.
The majority of not-for-profits will be, have been, or currently operate under a situation where the governance ‘line in the sand’ is blurred – that is, there are no clear lines and areas of focus between what the board does and what the CEO (management) does.
The fundamental issue here is that the CEO needs to be able to identify which stage the board of directors is operating at, as this will often determine the management style of the CEO and staff. There is nothing more frustrating than an organisation in which the lines of ‘making policy’ and ‘implementing policy’ are seriously blurred. Many not-for-profit organisations often request me to help them delineate these lines and to develop a more workable organisational structure.
The structure of the board meeting
To ensure this, board meetings should be carefully planned, facilitated and documented. Board meetings should be participative, with a clear and logical board agenda that requires board members to deliberate on policy issues resulting in strong, strategic decisions that are captured in the board minutes and then closely monitored for implementation.
Unfortunately, many board meetings usually drag on, with only some members participating, others digressing from the real issues, and others just pushing their own barrow – sound familiar? It’s often the most dedicated board members who become frustrated with these unproductive board meetings and soon leave the organisation, leaving the rest of the members to continue this ineffective approach to board governance.
Productive board meetings
One of the most effective ways to accomplish productive meetings and strong governance is to carefully design the ‘agenda’ and then closely facilitate to that agenda. The CEO and/or company secretary has an important role in ensuring that the Chair is reminded to keep to the agenda and to ensure that all agenda items are adequately addressed and not just glossed over.
Agendas should include operational, strategic and administrative topics.
Moreover, papers accompanying the agenda should carry ‘recommendations’, which reduces the time required in discussing an agenda item at the board meeting.
Without that careful design and facilitation of the agenda, board meetings too often result in prolonged confusion and frustration of members and overall ineffective governance of the organisation. Any board meeting that lasts for more than three or four hours needs to review its board structure, agenda and operations.
Greg Bondar is the Managing Director of the Sydney-based Association Management Institute.
This article is an extract of a paper delivered at the Council meeting of the Institute of Marine Engineering, Science and Technology in London.
Third Sector provides high-level content and services for professional development and organisational growth to leaders and senior executives from Australia’s NFP sector and its supporting industries.
