In contemplating altogether new organizational models for the arts and culture sector, I find myself focusing on the roll of boards. Increasingly, professional staff members are spending escalating percentages of their time managing their boards of directors, taking time away from managing activities related to their missions. Once a good and necessary idea, perhaps the traditional NFP board needs to be completely rethought, and either remade or replaced by something more effective.
Board functions include fiduciary oversight (on behalf of the government, which is granting tax-exempt status), garnering of resources through personal generosity or through influence with others, and providing expertise and insight. And while many boards carry out these functions with merit, most do not. Moreover, with the securement of contributed revenue the #1 challenge in the arts and culture sector, professional staff spend an enormous amount of time massaging board members’ egos in an effort to get them to give of their resources, or to get them to ask others for theirs. This tiresome effort directly takes precious time away from managing the core activities of their organizations.
There’s got to be a better way, but in building one, it’s esential to look more deeply into the problems. There are connections between the elements of board functionality and the problems that exist.
For one, fiduciary oversight establishes a power relationship with professional staff. The board hires and fires, and sets employment conditions. Combining this with the functions of providing contributed revenue and expertise can cause unusual interpersonal relationships. “I provide your salary through my giving. I’m your employer. I’ve got a great idea on how to run (some aspect) of the organization.” The various permutations of this “formula” create frustration, anger and toadying behaviors. Only the most mature board chairs and CEO’s can rise above the inherent pitfalls of this arrangement.
I believe that this systemic dysfunctionality is central to that of the organization, and in fact to the dysfunctionality of the standard NFP model (501(c)3). Finding an alternative is paramount to the future health of the arts and culture sector.
N.B. I have served as CEO in 4 organizations, and as board chair of 2 organizations, one at present. I have also served in other leadership postions on a number of boards of both large and small organizations.
An idea immediately comes to mind, in which NFPs in their governing boards could model themselves upon Congress. This is not to say that the orgs should become much more like our federal government, because then truly nothing would get accomplished. My brainstorm is that boards have two branches like a House and Senate, of similar, though not necessarily equal sovereignty. The “Senate” component would be the traditional model of a board, with the high-level contributors and well-connected individuals. The “House” component would comprise invested stakeholders from the community in which the org is situated, perhaps elected or nominated by the members of an org or the local general populace.
Of course, many orgs do have so-called advisory boards, but the influence they possess may vary greatly from place to place. And many standard boards do have some token stakeholders on them, though it is likely they are exempt from the minimum giving requirements of board members and may be viewed in a different light by their counterparts and by the staff of the org.
Would this lead to a melee of in-fighting, or simply create another board entity that the org employees need to ego-stroke and babysit? In my mind, these two boards could be responsible for keeping one another in check, freeing paid employees to concentrate more on management.
An alternative model is definitely needed for NFP boards. Although boards can be highly demanding of staff time and energy, I’m hesitant to theorize about new structural models as oppose to management models. I think both problems and solutions with boards are generally organizationally specific and have to do with NFP boards not evolving or recognizing the “lifecycle” needs of the organization.
The previously mentioned dual branch model might provide some larger more established organizations with a means of creating checks and balances effectively. However, it might also create a difficult elite group of stakeholders whose status may generate competition. This could be beneficial in cultivating higher donations or potentially create a burdensome ego driven cohort.
I’ve never considered the idea Jeffrey has presented. What a concept!
Would (or could) this “House” group be the next in line to our traditional board of directors? If less responsibility was put on this new group to maintain the stability of their NFP, they could potentially become a branch of passionate advocates for the organization.
In my experience with boards (for small organizations), I’ve found that having an ideal board member is very rare. Too often we see poor attendance at meetings and disinterest in participation. The idea of two groups could help alleviate the burden put on the board of directors. However, Jeffrey’s correct in pointing out that there could be drawbacks. The two groups, though unequal in position, could become rivals and bring down the entire organization.
Just a thought: Is an NFP free to implement this idea with the current 501(c)3 regulations?
While a certain tension between board and staff is inevitable and serves a healthy checks-and-balances function, the kind of dysfunctional boards described result from poor board policies and practices regarding recruitment, training and policing. In decades of consulting for nonprofits of all kinds, I’ve found board problems to be a special bete noire for arts organizations; in social services and education, the issues are less common and rarely as severe. Junior boards, advisory boards, emeritus boards, boards of visitors are all tried as a way of breaking the traditional boards’ stranglehold on the organization, but they seldom do anything but create additional complexity. What’s needed is systematic, standardized best practices rule book for arts governance. The sector would be well-served if key funders put some energy into creating and enforcing a good governance model.
Thanks for this — very much. But — there are number of excellent books and other publications on what constitutes excellent, and appropriate board governance. On numerous occasions I have pointed board members and leaders toward these resources, but they are ignored — and/or the guidance is ignored. How can we insure that board members abide by recommended and tested practices? JU
This thoughtful article alludes to the LC3 model, which is similar to the ‘community interest company’ or ‘social enterprise’ model here in the UK.
This model indeed presents an opportunity for a highly engaged board who have legitimate ‘ownership’ of an organisation (while maintaining its social or community benefits) as opposed to a donor board, who should not confuse their financial contribution or gift with their governance and fiduciary responsibilities.
A high functioning and responsible donor board must be able to separate their decision-making and behaviour as trustees from their personal generosity to the organisation and its cause.
This behaviour needs to be made clear to them on their joining of the board – and can be enshrined by a strong chair, codes of conduct, setting of targets and regular board appraisal. Of course, this is easier said than done, but trustees must endeavour to become more conscious and aware of the impact of their behaviour on the success of an organisation.
That said, an organisation should treat all of its board members in the same way it would treat any other potential donors outside those board meetings by understanding their motivations and giving capacity and by providing excellent ‘customer care’.
Recent research carried out by Arts & Business as part of its Private Investment in Culture Survey 2009/10 shows that those UK arts organisations whose board make financial contributions receive twice as many private donations from other sources as those boards who do not give – download the full report here,http://www.artsandbusiness.org.uk/Central/Research/Investment-and-funding/private_investment_culture_0809.aspx
I would finally say that an nfp has to anticipate that some of its resources will be dedicated to the servicing of the board, but the board needs to understand that its primary purpose is to service the organization, never the other way around. I would suggest that the notion of ‘proportionate’ governance should be applied here – a board needs to ensure there is a balance between it receiving the right information and intelligence to make robust decisions and placing undue strain on the executive team.
That’s where the funders come in! From an ED it’s suggestion; from a consultant it’s advice; from a funder it’s LAW.
While admiring your thinking, and having worked with several not for profit board for arts institutions, I am left wondering, what’s the alternative?
I have served on a few boards but am principally a senior staff member by profession. I share the frustration with the inherent balancing act that takes place daily between board and staff. One’s job become disproportionately consumed with “managing up.”
Perhaps a round table discussion with board and senior staff members in a neutral environment would generate creative and workable ideas for moving forward. I know that board members, the majority of whom come to organizations with the over riding intention of helping, are often frustrated on their end as well with the current model.
From my own serial experiences as both an executive director and a board member I’m baffled by this statement: “Increasingly, professional staff members are spending escalating percentages of their time managing their boards of directors…” What is the evidence for this claim? The supply of anecdotes along those lines has naturally risen (how could it not, given how drastically the number of non-profit organizations has risen). And of course if one surveys executive directors in any era they will reliably complain about having to “waste so much time wrangling the blankety-blank board!” That will never change I suppose (been there and wailed that wail myself, and I’ve got a couple of pretty good war stories along those lines).
But I’ve certainly not seen any actual evidence supporting the idea that professional staff members today are _more_ likely to be “spending escalating percentages of their time managing their boards of directors” than were their counterparts in 1990 or 1970. Before engaging with proposed solutions I’d like to see some meaningful basis for the problem statement.
I would have to agree with the statement made by your reader, Jessica, about the importance of “a strong chair, codes of conduct, setting of targets and regular board appraisal. Of course, this is easier said than done, but trustees must endeavour to become more conscious and aware of the impact of their behaviour on the success of an organisation.”
Perhaps we’re just lucky with our board, but I would tend to think that the entire structure does not need to be rethought, indeed it is the vetting process that might need to be reconsidered. Certainly, the funds make many board members appealing, but isn’t community involvement or dedication to the mission so much more important? Of course we know the answer to this is yes, which is why it is important to have a dedicated chair and vice-chair willing to redirect focus to the development of the organization. I cannot help but be inspired to think that the influence of their peers to adjust ways of thinking would go a long way. Many times staff members are not comfortable addressing Board members and certainly would not be so impertinent as to suggest a change in attitude. But as with every relationship, restructuring should not be considered until all methods of communication have been exhausted.
I suppose one of the ideas that keeps troubling me is the way in which the largess requirements often enforced on board members creates a culture that resembles oligarchy. All boards, like the people who serve on them, are different. If an organization has a good and effective board, no harm done. But there is something especially distasteful about having to hand-hold a group comprised of our society’s elite through the steps of responsibly guiding an organization for which they are legally bound to devote due care.
We all seem to agree that boards need more training, coaching, and hand-holding, but that they should not be a strain on the NFP’s staff resources.
Maybe there should be required board training provided by an outside organization that a prospective board member would have to pay for and attend before ever joining? I don’t think there are any legal requirements that should (or would) arise from this idea, but from an organization-by-organization standpoint, we as leaders could mandate that our governing body be properly trained before taking up their positions. Frankly, if a prospective board member was unwilling to attend initiation training/occasional workshops on responsible governance, they probably don’t have the time, resources, or motivation to serve the organization in the first place.
I agree that the staff members are spending more time dealing with their Board members in the organizations. I also agree with some of the comments about the Board members needing to be trained. However, have we ever thought about why the relationship between the Board and the staff is hard to maintain now? Why the problems getting more serious now than it used to be? And what factors make the Board members now being demanding? I don’t really have the answers, but I think it’s worth thinking.
Also, tagging on Katrina’s comment, I agree the idea that “if a prospective board member was unwilling to attend initiation training/occasional workshops on responsible governance, they probably don’t have the time, resources, or motivation to serve the organization in the first place.” I also wonder why they decided to join the Board in the first place. Ideally, they are supposed to be passionate about the missions that the organizations are fulfilling in their communities, and they want to help with carrying out the missions. If they don’t have the time to make such commitments, not mention the further trainings. Maybe we should all incorporate the idea about the trainings for the Board members into the critical issues when doing strategic planning in the future.
All NFP boards are different. Yet, it is important that a board is comprised of a balance of high-level contributors and individuals who are deeply invested in their community, not either or. It seems that in recent years staff members of NFP organizations have started to overlook the importance of having board members who are invested in their community. Instead, they focus on finding individuals who will be high-end contributors or who work in a profession that will benefit the organization like law, PR, or marketing.
Just like the life cycle of an organization, the board needs to go through different phases and settle on policies and procedures to ensure the future success of the board and ultimately the organization. I agree that there might need to be a change in the structure of the board, but I also believe that a lot of the problems in any professional environment spark from the unease surrounding honest communication.
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