CPAs and other accounting and finance professionals are often asked to sit on the boards of not-for-profit (NFP) organizations. The volunteer, unpaid status of NFP board members—who are often also significant donors to the organization—means that it is a priority for NFP boards and their management to utilize the time of these board members as efficiently and effectively as possible. The authors, having presented many seminars on board development for the Service Corps of Retired Executives (SCORE), can attest to the critical importance of creating a board culture and board processes that help NFP board members get the most effective use of their time together; indeed, this is a key component of creating a high-performance board. This article will explain how each of the following seven key points can help NFP boards meet the challenge of using their time effectively:

  • Carefully recruiting, onboarding, and developing board members
  • Keeping all governance documents up to date
  • Ensuring that all board members understand their role and responsibilities
  • Developing an annual self-assessment process
  • Maximizing discussion time vs. presentation time
  • Using the agenda to keep the focus on the future and not the past
  • Continually assessing the communication process.

Recruiting and Onboarding

Board recruiting should be focused on aligning the background, skills, and expertise of board members with the mission and needs of the organization. An effective, on-mission recruitment method for NFP boards and management is to ask the following questions prior to undertaking any recruiting effort:

  • What is our purpose?
  • Who are we serving?
  • How are we doing?
  • Where are we going?

These questions should form the foundation of board recruiting and onboarding efforts. The answers, which will change over time, will not only help with keeping the board aligned with the organization’s mission, but also help ensure that new board members understand, prior to accepting a board position, the primary challenges and issues they will be facing. Not having to cover these questions in future board meetings, thereby reducing misunderstandings, will save valuable time.

Good board governance is not possible unless the organization’s bylaws and other governance documents are kept up to date.

Keeping Governance Documents Up to Date

Good board governance is not possible unless the organization’s bylaws and other governance documents are kept up to date. Issues related to board structure, policies, processes, and decision making need to be clearly articulated in these governance documents. Otherwise the organization risks using valuable meeting time to discuss and clarify issues that should already be clearly stated and delineated in these governance documents. As an example, during the authors’ board management seminars, participants have often asked how to deal with a disruptive board member or how to keep another board member focused on critical issues. In many cases, the members causing the problem—and wasting valuable board time—were there because governance documents had not been updated with regard to term limits, or such limits had not been enforced.

Understanding Roles and Responsibilities

NFP board members have a duty of care, loyalty, and obedience arising out of their fiduciary responsibilities under most state laws. The duty of care requires board members not only to be competent, but also to exercise reasonable care in decision making. The duty of loyalty requires board members to act in the best interests of the organization, and not for personal gain, when arriving at decisions. The duty of obedience requires members to be faithful to the organization’s mission and goals. In addition, board members also have a responsibility to the executive director or CEO of the organization, and a responsibility to the NFP board itself.

This latter responsibility can play an important role in making sure the board gets the most out of its time together. Board members who are not fulfilling their responsibilities due to attendance issues, lack of meeting preparation, a failure to find their voice at meetings, or other issues should not be ignored by other board members. In short, the board—not the executive director—has a responsibility to deal with such issues to ensure it is not wasting valuable meeting time. For example, board members who fail to prepare for meetings can waste an inordinate amount of meeting time asking questions and seeking clarification on issues that would not arise if they had prepared properly beforehand.

Developing a Self-Assessment Process

Every NFP board should conduct an annual self-assessment. The primary focus of this assessment should address this central question: Is the board getting the most out of its time together? This does not mean the board members should assess each other; rather, they should determine which board processes and structures may be preventing them from effectively utilizing their time together. Are agendas focused on the few critical issues, or the many trivial ones? Are methods of communication taking up an inordinate amount of time in presenting issues? Are meetings being conducted in a way that maximizes board members’ time? Is the board committee structure sufficient to allow for a more effective use of meeting time? Again, the focus of the assessment process is to gather the requisite information to make the necessary changes in board policy, structure, and processes to answer the central question: Is the board getting the most out of its time together?

Maximizing Discussion Time

Board members will be familiar with the frustration of sitting through a detailed presentation on a topic that requires a decision before the meeting adjourns, only to discover that very little time has been set aside for discussion. Not only is this a misuse of valuable board time, given that often much of the presentation detail could have been distributed and reviewed prior to the meeting, it is also an ineffective way to arrive at a decision. Boards should set aside at least twice as much time for discussion of a topic as they do for the presentation of it. This 2:1 rule of thumb helps to ensure better utilization of board time by using non-meeting time to distribute materials for review and information purposes, thus allowing more time for discussion, which hopefully will result in more informed decisions.

Focusing on the Future

Based on feedback from the participants who have attended the authors’ seminars, it is clear that keeping a board meeting focused on the future, rather than the past, is not as easy as it sounds. A good rule of thumb is to keep 75–80% of the meeting focused on the future. This does not mean that the past is unimportant, or that it is not helpful in informing future strategic planning, but rather that boards which are overly focused on the past may have difficulty identifying critical issues that need board attention.

One of the most effective ways to reverse this process is to use the board agenda as a tool for keeping the right focus. Boards should develop an annual priority list of the three or four most critical issues that will occupy the bulk of their time in the next year. This list can then become the basis for setting future meeting agendas. Not only will such an approach keep the focus on the future, it will also keep the board focused on the critical issues that it needs to address, as well as help the board and management more effectively utilize their time together.

Continually Assessing Communications

One of the critical questions with regard to assessing whether a board is getting the most out of its time together is whether its members are satisfied with the content, presentation, and frequency of the information they are receiving. Nothing wastes valuable board time more than poor communication. In assessing why some boards have difficulty maintaining the 2:1 ratio discussed above, the authors have found that the content, presentation mode, and frequency of the organization’s communication process with the board are often to blame. The organization-to-board communication interface should be reviewed as part of the annual self-assessment process. Where appropriate, electronic communication can be a useful method for disseminating important information to the board in advance of meetings for information and review. This then permits an important agenda item to proceed almost immediately to the discussion phase, since a detailed presentation of the topic is no longer necessary.

Boards should develop an annual priority list of the three or four most critical issues that will occupy the bulk of their time in the next year.

It is also important to review the frequency of communications. Do board members feel comfortable with the follow-up process on important issues? Do members feel that communication between the organization and the board is sufficient between meetings? The answers to these and similar questions can go a long way toward helping a board get the most out of its time together by not having to revisit prior issues or seek clarifications that consume valuable board time.

Getting the Job Done

High-performance NFP boards can provide the strategic thinking, clarity, focus, objectivity, and perspective that is needed by the organizations and managements they serve. When CPAs or other financial professionals serve as unpaid volunteers on NFP boards, these members give unselfishly of their time, talent, and commitment. Therefore, it is important for board members and management to effectively utilize their time together. The seven recommendations made above can help any NFP board not only assess whether it is getting the most out of its time together, but also identify and correct those issues.

Joseph Castellano, PhD, is a professor emeritus in the school of business administration at the University of Dayton, Dayton, Ohio.
Lucian Zelazny, PhD, is an assistant professor in the school of business administration at the University of Dayton, Dayton, Ohio.