Recently, during a series of conversations around good practices with respect to nonprofit boards, my question to a group of leaders of foundations and nonprofits was: “What do you think lends itself to good governance in practical terms?”
Ananthapadmanabhan Guruswamy, CEO of Azim Premji Philanthropic Initiatives (APPI), was quick to respond: “There are many factors but the most critical one is the will of the founder or CEO to be governed”. And in his words, I found the answer to the many frustrations I had faced when consulting with organisations that wished to work on strengthening their boards.
The need for a ‘professional’ board – how real is it?
There are a few reasons why nonprofits feel the need to upgrade their boards. Common ones include the need to be ‘perceived’ as more professional, pressure from donors and funding agencies, the desire to involve and include new talent (this is not as common though), and occasionally exhaustion in the founder or the existing board.
However, my own experience of having advised over 85 organisations has told me that rarely do founders want to be governed beyond the basic oversight that is required. And that is fine. I define ‘governance’ simply as a set of actions taken by a group of people that enables decision making in the best interest of the mission fulfilment of the organisation. It’s goes beyond the oversight and fiduciary functions that a board is required to play.
Rarely do founders want to be governed beyond the basic oversight that is required.
The need to be politically correct and demonstrate a set of behaviours that are considered good practice has driven many founders to behave in unnatural ways, like appointing ‘important’ people who may not be able to contribute to the organisation, spending enormous amounts of time managing dynamics within the board and between board and staff, creating artificial circumstances to make board engagement seem more useful and productive, and so on.
Left to themselves, many founders would prefer to stay focused on actions that would lead directly to the fulfilment of organisational outcomes. “I want my board to just make connections for me that will lead to funding and resources. I know what to do and how to do this. If I had more money, then I could hire the people on the ground to help,” is a refrain I’ve heard often.
The important thing is to be honest: to oneself as the founder, to the board as a body that is set up for purposes of accountability, and to the donor who will invest knowing fully well that the money being given will be put to the use that it’s intended for.
Diligence and credibility are determined not just by an active and engaged board but by several other factors as well. These include proactive sharing of information on what was achieved and how, conflicts of interest, if any, on the board, and between board and staff, failures experienced, challenges beyond money, and so on.
Actions speak louder than words
At the organisations I advised, I would set up meetings with the people I thought the founders could invite on their board, first as advisors, volunteers, and eventually maybe as board members if things went well. This was often at the behest of the founders themselves.
In most cases however, it seemed like pulling teeth after the initial introductions; it became more and more difficult for them to prioritise these meetings. There was always something more critical, more important and the meetings would get pushed, postponed. There was a minimal attempt to be proactive, to engage, to find ways of involving outsiders, and new people, to test the competencies and so on.
There could have been many reasons for this reluctance: the first being the lack of true desire to build an effective board, which is usually masked by a belief that there is a will to do so. Other reasons include underestimating the time that would be required to engage and establish chemistry, having to focus energy on putting out other fires in the organisation, pursuing other more immediate opportunities, and so on.
The will to be governed
I am a firm believer that everyone has the same 24 hours; it’s what we do with the time available to us, that indicates the importance of that activity in our lives. Not making the time to invest in a board or in a group of people who the founder will have to ‘report to’ and be accountable to is an indication of the lack of sufficient will to be governed.
The will to be governed can be determined by the founder answering the following questions:
- Do I want to invest time in building a board that will govern?
- Will I do things very differently if I had a more active and engaged board?
- Am I afraid that a governing board will take away from what’s important to me in the organisation, like entrepreneurial freedom in defining strategy and/or prioritising activities that I think are critical?
- Will it matter to me if the organisation started to do things differently to what I believe is the way forward?
- Will it matter if I didn’t do anything and let my current board stay as is?
It’s always better to invite a few advisors who could help the founder in specific areas while scaling.
As they are able to deliver on the vision of the organisation, founders must also feel free to push back on external pressures that force them to create boards that do more than just the basic compliance and oversight functions. If one must have help as one is scaling, it’s always better to invite a few advisors who could help the founder in specific areas like building a strong brand, measuring and articulate impact, thinking about scale, and so on. Individuals with these specific competencies could support a founder as and when needed without necessarily playing a governance role.
With some of the founders I’ve worked with, it’s taken more than two years to build a board that looks beyond compliance. Many times, there is a gap between when they seek advice to strengthen their boards, and when they are actually ready for it. It takes introspection, reflection and a lot of hard thinking to realise if one is ready to be questioned, challenged and equally supported when one needs help to grow one organisation and the impact it wants to have.