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The Patrick and Aimee Butler Family Foundation

Board Self Assessment & Discussion

October 1, 2015

Facilitated by: Susan S. Meier, Senior Governance Consultant

© 2015. Not to be distributed or reproduced without the express permission of BoardSource.

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BoardSource

• Advances the public good by building exceptional nonprofit boards and inspiring board service

• Supports and promotes excellence in nonprofit board service

• Is the premier source of cutting-edge thinking and resources related to boards

• Engages and develops the next generation of board leaders

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Susan Meier

• BoardSource Senior Governance Consultant

• Principal, Meier and Associates• Former Vice President of Consulting &

Training, BoardSource• Former Vice President of Chapter

Services, Prevent Child Abuse America• 27+ yrs of experience in the nonprofit

sector• Corporate experience• National and local board member and

officer experience

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Rules of Engagement

“To create learning organizations, we must understand the underlying agreements we have made about how we will be together.”

-Margaret Wheatley

• Please place cell phones on vibrate…

• Technology in the room will be used only for the purposes of our session…

• Everyone is encouraged to actively participate but to also allow others the same opportunity…

• Listen well and ask good questions…• Let’s consciously choose to engage in a culture of inquiry,

i.e., candid, open, respectful, and constructive discussions…

• Assume positive intent…

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Our Objectives

• Deepen our understanding of the governance practices of high performing boards

• Review and discuss highlights from the board’s self assessment data report

• Explore our boardroom culture

• Identify the most important work of our board over the next 1-3 years

• Decide on action steps to become an even more effective board

© 2015 BoardSource

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Agenda

• Welcome• Silent Start• Set the Context • Boardroom Culture• 3 Practices of Foundation Boards• Lunch• Overview and Discussion: BFF’s Board Self

Assessment Results• Discussion• Next Steps• Closing Thoughts

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Silent Start

1. What is your greatest hope for today’s session?

2. What is your greatest concern or fear regarding today’s session?

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Setting the Context

© 2015 BoardSource

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What is Governance?

To govern is to steer, to control, and to influence from a position of

authority.

Governance is not an event nor a destination.

It’s a process.

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Organizational Lifecycles

• Start-Up: founder-driven; minimal or no staff; small, passionate, hands-on board; minimal governance

• Adolescence: staff grows; Board begins to expand; greater diversity; small committee structure; changing roles; rocky waters

• Mature: clarity of Board/staff roles; larger Board; competent staff; governing Board focuses on strategy, oversight, fundraising

• Stagnant: routines rule; complacency leads to stagnation; energy wanes; low staff morale; unengaged Board

• Defunct: if organization can’t be resuscitated, time to close

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The Nonprofit Organizational Lifecycle Model

Start-Up

Adolescent

Mature

Stagnant

Defunct

Renew

Sustain

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Context: The Governance Continuum

Dysfunctional

Functional

Responsible

Exceptional

Unconscious Conscious Self Aware

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Hallmarks of a High Performing Board • Cultivates strong leadership• Understands governance goes beyond compliance• Focuses time and attention on the most important

issues• Structures the board to get the work done• Has the ‘right’ people on the bus• Cultivates constructive relationship with the chief

executive/staff• Values honest but respectful communication• Recognizes that culture trumps everything,

including strategy• Maintains a high level of self awareness

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Question:

What authority does an individual trustee have?

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Board Member’s Legal Obligations

• Duty of Care– Using your best judgment– Actively participating, paying attention– Asking pertinent questions

• Duty of Loyalty– Avoiding conflicts of interest– Be independent-minded– Putting aside personal and professional interests

• Duty of Obedience– Staying true to the organization’s mission– Obeying the law, both public and organizational

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Silent Start: Culture

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Culture of Inquiry …

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

• Seek more information, question assumptions, and challenge conclusions

• Draw on multiple sources of information and perspectives and ensure all voices heard

• Deliberate differently• Ensure all are aware of how decisions are made

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Core Pillars of a Healthy Boardroom Culture

Boardroom Culture

Trust

Clear Values

TeamworkConstructive Discontent

Collective Wisdom

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Trust…

• Is vital to sustain authenticity.

• Requires a board to build its social fabric.

• Allows you to risk that others will be respectful and not hurtful when you are vulnerable.

• Emerges when there is a high degree of accountability.

• Is deeply impacted by who is in the boardroom.

• Once established, takes some time to build with and by new board members.

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“Board Engagement”

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3 Core Practices of High Performing Foundation Boards

1. Understand and respect Board/staff roles

2. Work in constructive partnership with the chief executive/staff

3. Focus on that which is most important

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Where Does Governance End and Management Start?

GovernanceManagement

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Practice 1:

Understand and Respect Board/Staff Roles

In small groups, identify and list the 10 primary responsibilities of a nonprofit board.

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Primary Foundation Board Responsibilities

1. Set Direction• Determine mission and

purpose• Ensure effective planning

and strategy

2. Ensure Resources• Ensure adequate financial

resources • Select the chief executive • Build a competent board• Enhance the foundation’s

public standing

3. Provide Oversight• Provide grant making

oversight• Protect assets and

provide financial oversight

• Ensure legal and ethical integrity (conflict of interest, self dealing)

• Support and evaluate the chief executive

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Division of Responsibilities

Board Responsibilities:1. Determine mission and

purpose2. Select, support, evaluate

the chief executive 3. Protect assets and provide

financial oversight 4. Ensure ethical and legal

integrity5. Ensure effective planning

and foundation strategy6. Enhance foundation’s

public standing7. Provide grant making

oversight8. Build a competent board

CEO/Staff Responsibilities:1. Commit to the mission2. Lead staff & manage

organization3. Exercise responsible

financial stewardship4. Follow the highest ethical

standards, ensure accountability, comply with the law

5. Engage the board in planning and lead implementation

6. Build external relationships and serve as an advocate

7. Implement the grant making process

8. Support the board

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Board Role 1: Set Foundation’s Direction• Developing and maintaining a focus on mission, e.g:

– What is our mission? Our vision?– What are our values?– What issues must we address in order to carry out our mission?– Where do we want to be in five years?

• Engaging in strategic planning and thinking:– Are we in consensus regarding our key grant making priorities? – What is the board’s role in fulfilling the foundation’s strategies?– What does success look like to us?– Are we bringing the most substantive issues to the board for

strategic discussion?

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Definitions

• Mission: why we exist

• Vision: what the world would look like if we achieved our mission (aspirational)

• Values: the principles that guide us in our work

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Strategic Planning

• Strategic planning (board and staff) vs operational planning (staff)

• Strategic framework/mapping

• Develop a thoughtful process that builds ownership

NRPA’s 2014 – 2016 Goal: Increase the impact of parks and recreation at the community level in conservation, health and wellness and social equity.

Members

Awareness

Research

Education

Advocacy

Mission: to advance

parks, recreation, and environmental conservation efforts that

enhance the quality of life for

all people

Strategic Vision:

Everyone will have easy

access to parks and recreation in sustainable communities

Conservation

Improve health of 10 million Americans

through P & R agencies

Health & Wellness

Expand access to P & R in low income

communities through 90% of NRPA member

agencies

Social Equity

Connect one million kids to the outdoors

through P & R agencies

Conduct research to quantify the benefits

of P & R

Provide education that helps P & R

quantify the value of natural resources

Support federal legislation that supports

conservation in P & R

Provide evidenced based prevention

programs to P & R

Create and deliver educational and

behavioral change resources to agencies

Maintain federal funding levels for P & R health related

initiatives

Advance PRORAGIS to increase equitable

Access to P & R

Provide training on how to identify and serve low income

communities

Support federal legislation that

supports urban P & R

Powered by PRORAGIS

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Board Role 2: Ensure Resources

Identify resources needed:

1. Funding2. Leadership (executive and board)3. Reputational/Public Image4. Committees

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Capable Staff Leadership

• If the foundation is to have a chief executive, it is the Board’s responsibility to hire him/her– Single most important decision of any Board – Ensure new executive gets off to a good start– Succession planning

• Support of Chief Executive, e.g.:– Set expectations clearly– Provide professional development as needed– Assist executives when Board members overstep/

misunderstand roles

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Building a Competent Board: The Board Building Cycle

Identify

Cultivate

Recruit

Orient

Involve

Educate

Evaluate

Rotate

Celebrate!

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The Strategy of Board Building• The Board members you recruit today are your

leaders of tomorrow.

• There is no ‘one size that fits all’ in terms of composition or size.

• Abide by Board term limits.

• Diversity matters.

• A good orientation helps Board members get off to a good start. There are no mulligans.

• Work hard to be the kind of Board that those we aspire to recruit, will sit on.

• Clear expectations set the table for accountability.

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Positive Public Image

• Accurate image and positive reputation influences the foundation’s success

• Ensure stakeholders are kept appropriately informed

• Ensure clarity on who serves as the spokesman(or men) for the foundation

• Speak with one voice

• Embrace the ambassador role: a 24/7 job

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Board Committee Structure• Keep it simple and flexible

• Be strategic: don’t mirror staff structure

• Fewer, not more, standing committees

• Greater use of task forces

• Ensure clear committee charters that clarify lines of authority

• Create a Governance Committee

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Governance Committee

• Promotes and provides education to the board about the organization, field, and governance

• Assesses the organization’s governance needs

• Leads the identification, nomination, and orientation of new members

• Develops leadership/nominates officers

• Conducts Board self assessment

• Organizes the annual board retreat

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Board Role 3: Provide Oversight

• Grant Making – set strategies and priorities; ensure thoughtful process; ensure results

• Financial -- establish budget guidelines, oversee financial management, secure auditor

• Risk management • Evaluation of chief executive• Legal and moral oversight -- manage

compliance, values, conflicts of interest, and accountability

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Graphic Dashboard

Source: Lawrence M. Butler author of The Nonprofit Dashboard: A Tool for Tracking Progress (BoardSource, 2007).

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How Well Do We Manage Risks?

1. Well informed Board members2. Written records and policies3. Adequate insurance4. Annual audits5. Appropriate supervision6. Conflict of interest enforcement7. Whistle blower protection8. Timely filings9. Oversight & protection of assets10.Due diligence

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A Good Chief Executive Evaluation…

• Is formally conducted (both in writing and verbally) on an annual basis

• Uses a proven tool & process• Allows for CEO self reflection & evaluation• Engages all board members• Optimizes opportunity to recognize CEO’s

strengths & contributions and flag areas for improvement

• Considers leadership needs of organization looking ahead

• Clarifies mutual expectations of board and CEO• Ensures full board is informed of outcomes &

compensation

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Questions about a Nonprofit Board’s Responsibilities?

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Practice 2:

The Constructive Partnership “Exceptional boards govern in constructive partnership with the chief executive, recognizing that the effectiveness of the board and chief executive are interdependent.”

-The Source: Twelve Principles of Governance

That Power Exceptional Boards

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Constructive PartnershipAny good relationship entails…

respect for differences regular and clear communications clarity of roles setting mutual expectations

The Board/CEO partnership also requires…

conducting mutual assessments balancing the Board’s role in support &

oversight seeing trust-building as a process, not an

event asking the hard questions

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Exercise

© 2015 BoardSource

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Ensure CEO & Board Engagement

© 2015 BoardSource

Board Engagement

CE

O E

ng

agem

ent

Source: Richard Chair, et.al, “Governance as Leadership”

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Practice 3:

Focus on that Which Is Most Important

Optimize your limited time together by designing board meetings to be productive, engaging and focused on substantive issues.

• Thoughtfully Crafted Agenda• Careful Framing of Questions• Built-In Educational Time• Consent Agenda• Dashboards• Annual Calendar of Meetings• Board Retreats• Focused Pre-Readings/Board

Books• Expert Guests/Facilitators• Executive Sessions

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Lunch!

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Highlights of the BFF Board Self-Assessment

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BFF’s Assessment Process The Tool:

Developed by BoardSource Used by over 1000 nonprofit boards over 15-20 yrs

The Process On line and anonymous 10 Board assessment surveys distributed

10 completed 100% response rate

The Data Report ~95% of results reflect perceptions of Board

members Checklist of Practices section, completed only by

John, is factual Telephone Interviews

15-16 one-on-one interviews with board and staff members conducted by independent governance expert

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The Perceived Overall Effectiveness of the Board

Very satisfiedSatisfiedNeutralDissatisfiedVery dissatisfied

10%

20%

20%

20%

20%

© 2015 BoardSource

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Satisfaction with Commitment andOverall ExperienceThe level of commitment and involvement demonstrated by most Board members.

Do you find serving on this Board to be a rewarding and satisfying experience?

SatisfiedNeutralDissatisfied

30%

30%

40%

Very Satisfying

Satisfying

Neutral

Disappointing

Very Disappoint-ing

40%

10%

20%

20%

10%

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Foundation Board Roles at a Glance

Set Direction 2.12

Ensure Resources 2.22

Provide Oversight 2.46

Board Structure 2.06

Board Leadership 2.44

Highest Responsibility Score: Grantmaking Oversight 3.37

Lowest Responsibility Score: Board Composition 1.46

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Board Performance Overview

© 2015 BoardSource

Board Composition

Foundation Strategy

Board Responsibilities & Structure

Meetings

Mission

Board President Responsibilities

Communications & Accountability

Financial Oversight

0.00 1.00 2.00 3.00 4.00

1.46

2.03

2.04

2.07

2.23

2.44

3.09

3.15

3.37

Board Performance (9 Responsibilities)0 = Poor; 1 = Fair; 2 = OK; 3 = Good; 4 = Excellent

Grantmaking Oversight

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Highest Scoring Questions0 = Poor, 1 = Fair, 2 = OK, 3 = Good, 4 = Excellent

Survey Question Average DOC DKs

6.9 Complying with IRS requirements for completion and disclosure of Form 990-PF. 3.75 78% 2

5.3 Ensuring that the foundation maintains appropriate and constructive relations with grantees. 3.63 76% 2

5.4 Ensuring the foundation monitors the fulfillment of grants. 3.56 66% 1

3.7 Ensures the foundation complies with laws and requirements of private foundations, such as self-dealing, expenditures, and public disclosure. 3.50 66% 0

5.1 Approving grant-making policies and practices, e.g., size and length of grants, types of grants (general operating, capital, matching, etc.), discretionary grants. 3.50 66% 0

10.3. Committing adequate time and energy to the responsibilities of the board president position. 3.50 65% 2

3.6 Measuring foundation practices and performance against standards developed for private foundations (e.g., standards for grant making, reporting and disclosure, etc.). 3.43 63% 3

5.2 Reviewing and approving grant recommendations from committee(s) and/or staff. 3.40 54% 0

6.2 Ensuring that the foundation's administrative expenses are reasonable and necessary. 3.40 67% 0

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Survey Question Average DOC DKs

4.6 Establishing and enforcing policies for length of board service, e.g., length of terms and number of terms. 0.50 57% 6

4.3 Identifying and cultivating potential board members. 0.88 54% 2

4.7 Planning for board officer succession. 1.11 35% 1

2.8 Focusing regularly on strategic and policy issues versus operational issues. 1.33 21% 1

1.3 Articulating a vision that is distinct from the mission. 1.50 25% 2

4.2 Examining the board's current composition and identifying gaps (e.g., in expertise, influence, ethnicity, age, gender). 1.50 44% 2

8.3 Respecting the distinct roles of the chief executive, board, and staff. 1.50 22% 0

8.4 Taking steps to improve the performance of the board, e.g., board self-evaluation, board education, development of board action plan. 1.50 36% 0

8.5 Periodically reviewing and updating the bylaws, board policies, and board procedures. 1.50 28% 0

Lowest Scoring Questions0 = Poor, 1 = Fair, 2 = OK, 3 = Good, 4 = Excellent

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Survey Question Average DOC DKs

2.2 Ensuring that the foundation has a viable strategy and effective planning processes. . 1.60 19% 0

9.1 Fostering an environment that builds trust and respect among board members. 1.70 22% 0

9.6 Having frank and open exchanges of ideas during board meetings. 1.70 19% 0

9.8 Engaging all board members in the work of the board. 1.70 22% 0

8.8 Reviewing its committee structure to ensure it supports the work of the board. 1.78 19% 1

1.2 Agreeing on how the foundation should fulfill its mission. 1.80 38% 0

4.5 Effectively orienting new board members. 1.80 17% 0

8.2 Defining responsibilities and setting expectations for board member performance. 1.80 34% 0

Lowest Scoring Questions (cont’d)0 = Poor, 1 = Fair, 2 = OK, 3 = Good, 4 = Excellent

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Highest Degree of Consensus (DoC)

© 2014 BoardSource

DoC Average Rating Statement

78% 3.75 6.9 Complying with IRS requirements re Form 990-PF

77% 3.30 3.1 Fostering a positive public image of the foundation.

76% 3.63 5.3 Ensuring that the foundation maintains appropriate and constructive relations with grantees.

68% 3.30 6.1 Ensuring the annual budget reflects the priorities of the foundation.

67% 3.40 6.2 Ensuring that the foundation's administrative expenses are reasonable and necessary.

66% 3.33 3.4 Ensuring the foundation regularly and accurately disseminates information about its operations.

66% 3.33 6.5 Reviewing the results of the independent financial audit.

66% 3.50 3.7 Ensures the foundation complies with laws and requirements of private foundations, such as self-dealing.

66% 3.50 5.1 Approving grant-making policies and practices.

66% 3.56 5.4 Ensuring the foundation monitors the fulfillment of grants.

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Lowest Degree of Consensus (DoC)DoC Average

RatingStatement

13% 2.30 9.5 Allowing adequate time for board members to ask questions and explore issues.

14% 2.33 8.7 Establishing and adhering to its confidentiality policies.

15% 1.88 2.5 Considering strategies, other than grant making, to further the foundation's mission.

17% 1.80 4.5 Effectively orienting new board members.

19% 1.78 8.8 Reviewing its committee structure to ensure it supports the work of the board.

19% 1.60 2.2 Ensuring that the foundation has a viable strategy and effective planning processes.

19% 2.40 1.1 Periodically reviewing the mission to ensure it reflects current needs.

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Lowest Degree of Consensus (cont’d)DoC Average

RatingStatement

19% 1.70 9.6 Having frank and open exchanges of ideas during board meetings.

21% 1.33 2.8 Focusing regularly on strategic and policy issues versus operational issues.

21% 1.50 8.3 Respecting the distinct roles of the chief executive, board, and staff.

22% 1.70 9.1 Fostering an environment that builds trust and respect among board members.

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Checklist of 26 Board Practices

Chief Executive Supervision

Board Practices

Organizational Practices

Oversight Practices

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Checklist of Board Practices (% in place)

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Checklist of Board Practices

Checklist of Practices Practices and policies NOT in place for your organization Staff response

Organizational Practices Written vision statement.Written code of ethics.

NoNo

Oversight PracticesBoard receives financial statements at least quarterly.Board or committee met with auditors without staff present.Has adopted a whistleblower policy.

NoNoNo

Board Practices

Has formal orientation for new board members.Length of board member terms is defined.Has term limits.Holds an annual retreat.Formal written policy limiting executive committee’s powers.Chief executive is excluded from voting on board issues.

NoNoNoNoNoNo

CEO Supervision

Has written chief executive job description. Chief executive is evaluated annually by the board.Chief executive evaluation includes formal, written review.Board periodically reviews executive compensation at comparable organizations.

N/AN/AN/AN/A

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Board Discussion

• Do the survey results confirm or contradict your view of the Board?

• What were you pleased to learn?• What, if anything, surprised you?• Is anything missing that you

expected to see?• Where are our opportunities for learning and

growth?

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Looking Ahead

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Discussion

1. What resonates most with us?

2. What kind of board do we want to be?

3. What does it mean to be an engaged board?

4. What is the most important work of this board over the next 1-4 years?

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Next Steps

© 2013 BoardSource

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Closing Thoughts

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