tips for nonprofit directors and officers
TRANSCRIPT
The Center for Nonprofit ExcellenceJanuary 18, 2012
BUILDING A POWER BOARD The Perkins Five-Finger Philosophy of
Nonprofit Board Composition
The Important Role of the Board
• Who owns the organization anyway?• What are my legal duties?• What are the 3 most likely sources of trouble?• What is D & O Insurance (and why should I
care)?
D & O Coverage
• D&O = Directors and Officers
• Protects against breach of fiduciary duty claim
• Biggest benefit: Covers legal fees and costs of defense
A Nonprofit Director’s Worst Nightmare
• Imagine you’re a director or officer of The Second Mile Foundation
• PA Governor Tom Corbett says, “I need to know what the board members knew.”
• Organization (founded in 1977) is basically in wind-up mode at this point.
Other Examples
• New Caste Youth Football Program—Managers investigated by state AG for misuse of funds, state police involved, criminal charges filed.
• USTA Sectional Association—Disputed board election and nomination process, settled via arbitration.
Self-Assessment
• How much do you know about your nonprofit organization?• Take the test now and calculate your
score.
How Did You Do?
• Don’t Feel Bad• Few Score in Top Category• Topics for discussion at your next
board meeting
Miscellaneous Issues
• What’s a registered agent?• Are we legally required to have a
social media policy?• What is a gift policy?
The 5-Finger Philosophy
The Concept: Every person on your board of directors (including YOU) fits into one of five categories, each resembling one of the fingers on your hand.
Benefits of the5-Finger Philosophy
• Maximize Effectiveness of Current Board• Better Recruiting and Retention• Self-Actualization (Abraham Maslow)
AN IMPROVED, HIGHER FUNCTIONING NONPROFIT ORGANIZATION
The Ring Finger
• Inconsistent participant• Flashes of brilliance and
passion• Potential leader• Underutilized asset
The Middle Finger
• Type A personality, argumentative, uncooperative, narcissist, controlling, patronizing, etc.
• The trouble with these people• What do you do?
The Worksheets
• Evaluate Your Board RIGHT NOW• Take Extra Worksheets for Your Colleagues• Make It Part of Your Annual Nominating or
Strategic Planning Process
What Happens Next?
• Address Current Problems• Improved Engagement Levels• More Strategic Succession Planning• Better Leadership Development
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