The US nonprofit sector is effectively the third-largest workforce in the country, employing nearly 13 million people and spending $3.5 trillion each year.
Yet despite the size and importance of nonprofits, many boards are still grappling with outdated processes that can’t keep pace with the rising demands on their organizations.
That was the focus of the third episode in our Nonprofit Board Excellence Series, where we were joined by Henry Saxon, Managing Principal at Saxon Advisory, and Jeff Breslin, President and CEO of the Boys & Girls Clubs of Metropolitan Baltimore.
They shared five ways boards can bring their governance practices up-to-date.
1. Build trust with leadership
Good governance starts with a trusting relationship between board and management. The board sets the strategy and holds the leadership team accountable. But they must also give them the space to deliver on their priorities.
“Your job is to trust them,” advises Jeff. “But your job is also to verify that trust, to make sure that you have the right people in place, and that you’re supporting them.”
That means agreeing clear goals, so the board can see where the organization is on track and where leadership may need support. “The main function of governance is understanding where we’re going and how we’re getting there. And then getting out of the way so that the leadership team can do what they do,” says Jeff.
Agreeing responsibilities between the board and leadership team can prevent confusion and keep decisions moving. “Be really clear about how a board makes decisions, how that flows to the leadership team and vice versa,” Jeff adds.
2. Cultivate diversity of thought
A decision is only as strong as the thinking behind it. For Henry, that means creating the conditions for people with different experiences and perspectives to challenge assumptions and approach problems from different angles.
“If you don’t have a diversity of thought, a diversity of experience, a diversity of perspective, and everybody is looking at the problem through the same lens, it really doesn’t matter how decisions are made,” he warns.
Boards that get this right benefit from richer discussions that challenge assumptions, surface risks and examine issues from multiple perspectives.
3. Make your meetings work harder
Board meetings are expensive: they demand time from people who don’t have much of it. They should therefore be structured to get the most out of every minute.
“If I get some of the most successful leaders in our community together, why would I waste their time just going through a checklist of items just because a board meeting historically has called for that?” Henry asks.
In practice, that means circulating routine updates ahead of time. Optimizing the agenda to prioritize strategic discussion. And thinking carefully about how to make the best use of all the skills and expertise around the table.
“Use that collective talent and brainpower really to work on problems and challenges and opportunities that matter most in your organization,” Henry advises.
4. Get the tech basics right
Nonprofits are investing in new technology, with almost all (90%) using three or more tools. But more tools don’t always mean better governance. And despite these investments, many boards are still working in the same way they were years ago.
“I see boards’ digital maturity still as low,” says Henry. “Board information is still sent through email with attachments. The functionality really hasn’t modernized much. And that’s a real opportunity for us as we move forward.”
That might mean using board management software like Ideals Board to plan agendas, share materials and capture decisions. Streamlining routine processes takes the guesswork out of meeting prep and keeps vital information central and secure.
5. Create a culture of continuous improvement
From there, you can create the conditions for continuous improvement. Again, this doesn’t have to mean a major technology project or large upfront investment. Jeff recommends taking a more gradual approach.
“It can be simple things like, how do we move from this spreadsheet to this system?” he says. “You can do it incrementally. And over the course of one, two, three, five years, you’ve really changed the organization.”
Henry suggests using repetition as a reminder to question how things are done. “If you go back four to six quarters and you’re doing the same processes, you owe yourself the opportunity to ask: can I optimize in this area?” he says.
Watch the Nonprofit Board Excellence Series
This session is part of our Ideals Nonprofit Board Excellence Series, where governance leaders share practical lessons on strengthening board effectiveness.
Register today to watch all three episodes on demand.