Boards, Governance and What’s At Stake

Over the past few weeks, I’ve been learning more than I think I want to know about the financial meltdown.  ProPublica , NPR’s Planet Money and This American Life, and PBS’s Bill Moyers have been working together and in tandem to report on this miserable example of what happens when greediness takes over.

Greediness, however, I get.  What I don’t get is the lack of accountability of these very, very high priced and supposedly intelligent people.  No one, it seems, could see this coming.  No one was at fault.

Seems to me that if a manager doesn’t know what is going on, there is no reason for that manager to be.  In my worldview that would translate into termination.  But for top management, termination must come from the Board, and too often the Board isn’t doing its job.

In the nonprofit sector, oftentimes the Board fails because we—staff—refuse to allow them to do their jobs.  We say they are volunteering their time so we can’t ask for more; we say we don’t want them to micro-manage so we aren’t transparent.  Too often, Boards are told what they want to hear, and are pretty much kept out of the loop.

It’s not that I am condoning Boards who act this way—they have a governance responsibility that is theirs to keep.  But it is ours to ensure that they understand their roles and responsibilities.  Just as it is theirs to ensure we know ours.

“Ours” and “theirs” implies that we are separate from each other—and that points out some of the problem.  If anyone should be “we” it is the Board and management of a nonprofit.

While I have no illusions that even the largest npo has the reach and the clout of a too big to fail bank, in some ways, our failures are more insidious.  We tend to serve the most at risk, the neediest populations and causes.  Our failures, therefore, seem to be disproportionate to our size.  And especially to the amounts of money involved.

Still, the gravity of what we do and the enormous and important effects should be heeded.  Never should we or our Boards be blind to what is so clearly coming.  Never should greed overtake ethical behavior.

On the April 16th Bill Moyers Journal (regrettably one of the last of the shows), Bill Moyers asked:  “why is it so hard to hold Wall Street accountable? Even as we speak the banking industry and corporate America are fighting against financial reform with all the money and influence at their disposal Their effort is to preserve a system that would enable them to ransack the country once again.”

Nonprofits are not ransacking the country; we are not bankrupting our system.  But if we do not pay attention to our responsibilities and ensure that our Boards and CEO’s adhere to an ethical and transparent system of governance, can we claim to be any better?

Most nonprofits do an admirable job of meeting their mission and helping their constituencies.  Unfortunately, for a number of nonprofits there’s a very large “But” after that sentence.  But:

  • We don’t manage our money well.
  • We don’t hold our Boards accountable.
  • We aren’t transparent.
  • We don’t discipline and where necessary fire staff who aren’t working up to capacity.
  • We don’t inform our donors about how their gifts were used,

A friend of mine, upon being named a very senior manager at her very large company decided she didn’t want staff where conversations about them included a but:

  • “John is a great guy, BUT he can’t seem to get to work on time.”
  • “Sarah does a good job BUT she always misses the deadlines.”

She clearly set out her standards and let everyone know in no uncertain terms, that if they couldn’t meet those standards, they couldn’t work for her.  The result:  A team that consistently meets deadlines, exceeds goals…and, oh, buy the way, gets the best bonuses at the company.

OK, most of us don’t get bonuses—unless you consider the bonus of knowing that the work you and your organization does truly makes things better for us all.

Janet Levine is a trainer and consultant.  Learn about her services and classes at http://janetlevineconsulting.com

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About janetlevineconsulting

For over 20 years, Janet Levine has worked for and with nonprofit and educational organizations, helping to grow their advancement programs. Her consulting company, Janet Levine Consulting, serves a wide range of organizations from small, all-volunteer agencies to major national organizations. She regularly teaches courses in non-profit management, fundraising and grant development, both face-to-face and online at http://courses.lmlearningstation.com/. In addition to her nonprofit work, Janet brings years of experience as a business and sales manager in the for-profit sector. She has an MBA from the Graziadio School of Business at Pepperdine University.
This entry was posted in accountability, boards, business practices, ethics, governance, management, nonprofit management, organizational culture, responsibility and tagged , , . Bookmark the permalink.

One Response to Boards, Governance and What’s At Stake

  1. Robert Nelson says:

    “We have met the enemy and he is us.”- Pogo

    It seems to me that governance is the number one area of concern for those who handle non profit contributions. With national scandals regarding major corporate malfeasance and ethical lapses, it is more important than ever for NPOs to establish Governance Advisory Councils comprised of major contributors to provide oversight, accountability and transparency.

    Governance Advisory Councils are comprised of all major donors giving more than a certain amount of money per year. There are no “good old boys” or persons on this Council who contribute less than the required amount. You pay the money and you have a “place at the table” to review and comment on proposed budgets, operating statements, all financial information as well as program and capital funding requirements. Membership is limited to one person perdonor organization/entity and is strictly voluntary.

    The NPO Board of Directors are not bound to follow their advice and recommendations. By the same token the contributors are not bound to continue their financial support if they determine the organization is not spending the money as it said it would.

    Today’s Board members while culturally and socially diverse, are often ill prepared to properly review financial statements. I believe they would gain a greater appreciation for their fiduciary responsibility if they would be willing to provide their major donors a “window” into their operations.

    Just some ideas that seem to work well in capital campaigns

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