Advancing Board Excellence:Broadening the Generative

Experience

2013

Paul Van Dolah

Characteristics of Exceptional Boards

Common Denominators

Frank and Open Relationship

Intentional

Engaged

Frank and Open Relationship

Open relationship between the chief executive and

the boardHonest communicationCommitted to collective successMutual trust, respect and appreciationPartnering to make sense of situations,

determining what matters and solving dilemmas

Intentional

Right people in the right place. . .

Thoughtful

Self aware

Proactive

EngagedBeyond simply attending

Personal motivation and commitment

Intellectual curiosity

Appetite for challenges

Passion for the cause

The SourceTwelve Principles of Governance that Power

Exceptional Boards

BoardSource 2005

12

Constructive PartnershipExceptional Boards govern in

constructivepartnership with the CEO, recognizing

that theeffectiveness of the board and the CEO

areinterdependent.

Boards forge a partnership characterized by mutual trust, forthrightness and a common commitment to the mission.

CEOs provide Boards with tools and information to govern. Welcome differing points of view and strategic thinking at the Board table.

Constructive Partnership

Responsible Boards

The SourceOf Power

ExceptionalBoards

Delegate operations to the CEO

Evaluate CEO annually

Ensure fair and competitive compensation

Develop a job description with and for the CEO

Trust, candor and respect

Sharing good and bad news

Communication in and between meetings

Open and honest CEO

Insightful tools and information

Face and resolveproblems early

Attract more qualified CEOs

Retain talentedCEOs longer

Change executive leadership at the right time

X =

Mission DrivenExceptional Boards shape and uphold themission, articulate a compelling vision, andensure the congruence between decisionsand the core values.

Exceptional Boards treat questions of mission, vision and values as statements of crucial importance to be drilled down and folded into their deliberations.

Recognize when it is necessary to change course and help the CEO with the execution of change.

2

Mission DrivenResponsible Boards

The SourceOf Power

ExceptionalBoards

Articulate clear statementof mission

Uphold organizational values

Use of mission, vision,and values in decision making

Congruence between mission, vision and values and

day to day work

Sharply addresscommunity needs

Inspire staff to reframestrategies and elevate goals

Improve advocacy,fundraising and marketing

Maximize the value of grantsand contributions

X =

Strategic ThinkingExceptional Boards allocate time to what matters most and continuously engage in strategic thinking to hone the organization’s direction.

They stay current with internal and external forces of change.

They look backwards and forward to understand what has emerged and what is possible.

Move away from report driven formats and toward meaningful discussions that drive strategy.

Members help clarify thorny problems, offer breakthrough insights, present new ways of framing challenges and generate strategic ideas.

3

Strategic ThinkingResponsible Boards

The SourceOf Power

ExceptionalBoards

Set direction

Establish and reviewstrategic plans

Monitor performanceagainst plans

Considerable time spenton consequential issues

Constant strategic thinking

Joint Board – Staff efforts toframe and explore issues

Alignment of agendasand CEO goalswith priorities

Become a strategic assetand a source of leadership

Sharpen direction,address difficult issues

and identify opportunities

Generate solutionsthat are understood

and supported

X =

Culture of InquiryExceptional Boards institutionalize a culture of inquiry, mutual respect and constructive debate that leads to sound and shared decision making.

Members are well prepared in advance, respectfully listen to, acknowledge and solicit different points of view.

Members synthesize and aggregate diverse views to advance the dialogue.

They seek information, question assumptions and challenge conclusions.

They tap into the collective expertise of the members.

4

Culture of InquiryResponsible Boards

The SourceOf Power

ExceptionalBoards

Have members who workwell with each other

Receive and reviewmaterials in advance

Convene well organizedmeetings

Focus meetings on fiduciary duties

Mutual respect and trust

Actively managed group dynamics

Openness to questions, challengesand differences of opinion

Multiple sources of information

Engage and energizetheir members

Expose fullrange of opinions

Make better decisions

Own and supporttheir decisions

X =

Independent - Mindedness

Exceptional Boards are independent minded. When making decisions, Board members put the interest of the organization above all else.

Members establish a point of view separate from the CEO, and set aside personal agendas.

Effectively manage duality of interests through appropriate conflict of interest practices.

Members avoid undue influence by loyalty to CEO, position, or reputation of fellow Board members

5

Independent- Mindedness

Responsible Boards

The SourceOf Power

ExceptionalBoards

Adopt conflict of interest policies

Disclose and do not voteon matters ofpersonal interest

Unqualified loyalty

Independent thinking drawnfrom multiple sources

Decision making freeof undue influence

Rigorous conflict of interest procedures

Make decisions in thebest interest

of the organization

Minimize risk ofpoor decisions

and negative publicity

X =

Ethos of Transparency

Exceptional Boards promote an ethos of transparency by ensuring that donors, stakeholders and interested members of the public have access to appropriate and accurate information regarding finances, operations and results.

6

Ethos of TransparencyResponsible Boards

The SourceOf Power

ExceptionalBoards

Comply with governmentfiling requirements

Report annually onaccomplishments anduse of funds

Active exchange betweenBoard and staff

Openness with donorsand public

Whistle blower policiesto protect staff

Alongside staff, feel connectedto the organization

Cultivate relationshipswith donors and stakeholders

Earn public trust and support

X =

Compliance with Integrity

Exceptional Boards promote strong ethical values and disciplined compliance by establishing appropriate mechanisms for active oversight.

Ensure that an explicit set of ethical values. and standards have been candidly discussed and clearly communicated.

Establish and monitor internal controls.

7

Compliance with Integrity

Responsible Boards

The SourceOf Power

ExceptionalBoards

Ensure compliancewith the law

Approve budgetand review financialperformance

Obtain independent reviewor audit of financials

Ensure appropriate insurance

Revise bylaws as necessary

Financially attentiveand astute

Board members

Vigorous oversight

Proactive risk management

Auditors and compensationconsultants report to Board

Judiciously allocateand oversee resources

Deeply understandtheir organizations

Minimize risk

Display highest standardsof ethical conduct

X =

Sustaining Resources

Exceptional Boards link bold visions and ambitious plans to financial support, expertise and networks of influence.

o Have financial plans aligned with strategic, operating and development plans.

o Diversify and maximize sustainable revenue sources. Develop and monitor a portfolio of income streams.

o Ensure the existence of a strong internal infrastructure and capacity.

8

Sustaining ResourcesResponsible Boards

The SourceOf Power

ExceptionalBoards

Approve balanced budget

Accept fundraisingresponsibilities andcontribute personally

Develop and Monitor Investments

Promote organization to the community

Creative and diverseRevenue sources

Enthusiasm for bold visionsAnd ambitious plans

Active involvement in solicitations

Intellectual, social, political,And reputation capital

Generate increased revenue

Extend programmatic capacityof organization

Improve organization’s standingin the community

X =

Results OrientedExceptional Boards are results oriented. They measure the organization’s advancement towards mission and evaluate the performance of the major programs and services.

Measure overall efficiency, effectiveness and impact.

Identify critical indicators that flow from the organization’s mission, vision and strategic priorities.

Assess quality of service delivery, integrate benchmarks and calculate return on investments.

Use information to make mid-course corrections, changing and refreshing strategic and operational plans as appropriate.

9

Results OrientedResponsible Boards

The SourceOf Power

ExceptionalBoards

Monitor financial performance

Receive programmaticupdates

Incisive program evaluation

Meaningful performance metrics

Early issue identification

Benchmarking against peers

Maximize resource utilizationwithout micromanaging

Focus on outcomesnot inputs

Drive programmaticactivities to excellence

X =

Intentional Board Practices

Exceptional Boards intentionally structure themselves to fulfill essential governance duties and to support organizational priorities.

They think explicitly about size, structure and schedule of Board operations.

They value efficiency and flexibility in leadership structures.

They invest in structures and practices that transcend individual, document them for institutional memory and adapt them to changing circumstances.

Exceptional Boards make meetings matter.

10

Intentional Board Practices

Responsible Boards

The SourceOf Power

ExceptionalBoards

Design Board size, structuresand meetings to accomplishwork of the Board

Document practices, policiesand decisions

Intentional and strategicapproach to Board

operations

Flexibility in responseto changing environment

Member assignments alignedwith priorities

Executive sessions

Engage in action orientedresults driven work

Use Board member time wisely

Reap full benefit ofmembers’ talents

Connect to the workof the organization

X =

Continuous LearningExceptional Boards embrace the qualities of a continuous learning organization, evaluating their own performance and assessing the value they add to the organization.

Members participate in a formal orientation and continuous education.

They embed learning opportunities into their routine governance work.

They learn from the organization’s history and experiences.

They undertake routine Board assessments to evaluate their own performance.

11

28

Continuous LearningResponsible Boards

The SourceOf Power

ExceptionalBoards

Orient new Board members

Use Board member skills

Learning activities built into Board work

Knowledge drawnfrom outside the boardroom

Board evaluation of individualand collective performance

Are well informed aboutthe external environment

Grow on the job, and contributeat increasing levels

Regularly upgradetheir governing practices

X =

RevitalizationExceptional Boards energize themselves through planned turnover, thoughtful recruitment and inclusiveness.

Use term limits and a well defined process for recruitment.

Recognize that diversity and inclusiveness are essential for success.

Recognizing the importance of leadership development and succession planning, they groom chairs and officers through transparent and participatory practices.

12

RevitalizationResponsible Boards

The SourceOf Power

ExceptionalBoards

Recruit based on individualcompetencies and personalconnections

Establish a committee to manage the recruitment process

Clarify around expectationsof Board members

Diversity of perspectives

Continuous recruitment

Thoughtful use of term renewals

Officer succession planning

Know their roles and functionwell as a group

Include important voicesat the Board table

Have a ready supply ofnew Board members

Experience smooth leadership transitions

X =