How Good Are Your Board’s Decisions?

Good decisions are the norm.  Suboptimal decisions are common.  Bad decisions are rare.

If you kept statistics on board performance people would know how great your board is.  The statistics and a few well-chosen anecdotes would help increase the confidence and support from donors, volunteers, foundations, referral sources, staff, and advocates.  Everyone wants to support a winner.  A history of making good decisions is a precursor to winning in the nonprofit world.

The first step is to define the criteria for a good decision.  Your nonprofit is mission centric, cares deeply about your clients, and is committed to fulfilling the promises of your mission statement by producing valuable outcomes.  Those are the criteria that define a good decision.

Since money is always a scarce commodity, there will be a temptation to include money (expenses, income, surplus, or deficit) as a success criterion.  However, that criterion is operational (the responsibility of the executive and staff) and therefore a health indicator rather than a success indicator.  Your board is responsible for the long-term success of your nonprofit.  The other criteria (mission, clients, outcomes, etc.) are the ones that affect long-term success, your nonprofit’s value to the community, your nonprofit’s sustainability, and offer a competitive advantage.

The second step is to define the change the board expects each criterion to produce.  The precursor to measuring change is having a baseline for each criterion and an understanding of how other activities are likely to affect the way the criteria change.

The third step is to decide when to measure success.  There is a temptation to measure the board’s success when the last dollar authorized for the activity is spent, at yearend, or after some other event.  While those are good times to check and ensure everything is happening according to plan, it is unlike to be the right time to determine success.  It often takes months or years for changes in the criteria to be noticeable.

The fourth step is to report the board success to everyone.  Openly sharing the numbers demonstrates that the board values transparency.  Measuring, sharing, and transparency increase everyone’s trust of the board.  By increasing trust, the board also increases support, the loyalty of supporters, and the sustainability of your nonprofit.

Next Step:

Track board decisions

Create mission-centric and client-centric criteria for judging success

Set a reasonable period for judging success

Report your board’s success

Hold your board accountable for increasing its success

Reporting the statistics makes accountability possible.  Taking action to improve the results demonstrates accountability.  It is what your board expects of the staff.  It is reasonable that staff and other stakeholders should expect the board to be accountable.

The board leads your nonprofit.  With good leadership and sound decisions, your nonprofit can achieve great things and provide exceptional value to your clients, supporters, and community.

Take It Further:

Recruit board members who value accountability

Empower your board development committee to hold the board, its leadership, and its members accountable for the board’s performance

Challenge your board to be great by expecting greatness from your board

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