BOARD GOVERNANCE

Your board’s next step toward EXCELLENCE!

December 2018

BOARD GOVERNANCE December 2018

Your board’s next step toward EXCELLENCE!

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Who we are:

Who we are:

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Our training is focused on

that are critical to the success of any organization:

Why we do what we do:

Matthew 28:19-20 Therefore go and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit, and teaching them to obey everything I have commanded you. And surely I am with you always, to the very end of the age.

We are called to make a difference in our world – to make disciples.

Who we are:

Three Core Competencies

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Why we do what we do:

Mark 10:45 For even the Son of Man did not come to be served, but to serve, and to give his life as a ransom for many.

We’re following Jesus’ example – he calls us to serve

Mark 8:35 For whoever wants to save their life will lose it, but whoever loses their life for me and for the gospel will save it.

We believe his promises. Life is better when you give it away. We want to do that more effectively and we want people in our community to experience it.

Why Mission Triangle?

Shared Vision and Values

Excellent Resources

Effective Model

Great People

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OUR MISSION

To help Christian nonprofits of the Triangle expand their Kingdom impact.

OUR NICHE

We turn passion into nonprofit best practice by teaching biblical truths and sound business principles.

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We believe a Christian nonprofit...

... understands that God is transforming both the giver and the receiver into His image.

... keeps the cause above their nonprofit through collaboration with other nonprofits and the church.

Biblical Truths & Sound Business Principles

Mission Triangle Core Competencies

Board Leadership Board Policy Manual, Roles and Responsibilities, Practical Leadership

Staff Leadership Succession Planning, Role of CEO, Performance Management, HR, The Team

... demonstrates that God has given everything to the Christian community in our city that we need to fulfill the calling He has for us.

... trains and equips champions to engage with them in ministry as co- owners.

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Biblical

Organizational

Sustainable Leadership

Effectiveness

Service

Strategic Planning

Transformational Giving Program Excellence, Core Identity, Long

Development Philosophy, Champion Range Planning, Operational Rhythms

Care, Development Planning, PEO Mapping

Measurement & Communications

Funding Tools Quantitative and Qualitative Analysis,

Major Gifts, Diverse Revenue Streams, Leveraging Technology, Telling Your Story

Event Planning, Funding Campaigns

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Today is just the beginning of a QUARTER of learning!

SG SG SG Board Policy Manual 101

January 9, 2019 11:30-1:00pm Covenant Church

Effective Board Meetings and Processes January 23, 2019 11:30-1pm Location: TBD

Board Committees and Officers

February 5, 2019 11:30-1:00pm Location: TBD

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Lifecycle of an organization

Start-Up

Adolescent

1414 Resources

Mature

Stagnant

Defunct

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Why Board Leadership:

“Difficulties in an organization can almost always be traced to a breakdown in governance."

- ECFA (Evangelical Council of Financial Accountability)

Board Governance Workshop Handout

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Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Officers and Committees) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

What makes governance so difficult?

Stakeholders are now looking beyond the ED to the board for leadership

Leadership delivered as a group is challenging

Nose in - fingers out

Constant state of change

“Board culture must be defined by design not by default.”

Jim Brown, The Imperfect Board Member

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“I have come that they may have life & have life to the full”

-John 10:10b

The Church (Christian Community)

Each of us is gifted differently...individuals, nonprofits, board members, churches...

Equipped

Trained

Built Up

Fitted Together

For works of service / for God’s glory!

All commanded

All commissioned

Some time, all the time, no seasonal breaks!

I Peter 2:4-17

We have the privilege of helping engage the Christian Community in God’s ONE plan!

Here’s the Truth

“The to The kill steal you thief enemy destroy”

All and to comes he has destroy kill does to and do only

is Disengage Deactivate not disorient Distract Disable you.

Divide have you. you. you. you. you. you.

to

-John 10:10

Distance you. Detract from your vision.

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Important: Worthy of an ANNUAL Check-up / Tune-Up

Your Board’s next step toward EXCELLENCE!

Healthy Boards

“Our intentions were all in the right place, but our practices were leading to conflict and confusion.”

-Peter Greer

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Grace & Commitment

Intersection Vision + Plan

Plan

Every organization must balance between the crippling chaos of too little organization and the stifling rigidity of too much.

-The Steward Leader, by Scott Rodin

Vision

VS.

Stifling Rigidity

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Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Roles) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

Hierarchy of Board Policies

1. Federal & State Laws - A board expects staff to monitor on it’s behalf and comply

2. Influencers Impact Written Polices - Affiliated Nonprofit Organizations, Accrediting Agencies, Credit Rating Bureaus,

Partnerships...

3. Articles of Incorporation - Seldom needs amending unless name or purpose change

4. Bylaws - keep “lean” and revise as necessary to reflect actual practice, but should leave many details to other documents

5. Board Policy Manual (BPM) - the ’one-voice’ of the board in an evolving, comprehensive document of 15-20 pages, plus a

few attachments

Mission, Values, Strategies, Goals

Board Structure and Process

Board – Staff Relations

Parameters around executive authority

6. CEO-Level Policies – Planning documents, personnel manual, etc. approved by CEO and often given to board for

information, not approval

7. Other Organizational Policies – Often determined in and by various staff units:

Finance Fundraising Human Resources Programs

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www.ncnonprofits.org

11/20/18

Board Policy Manual

"The single best decision a board can make – investing in ONE voice/ONE written document (the Board Policy Manual) that contains the policies and direction most valuable to that board in the current season!" - Bob Andringa

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It is easier to address issues before they have people attached to them!

Board Policy Manual

The Mission Triangle BPM creation process 2017:

Do we need one?

How much of one do we need?

One board member took the lead w/ staff

Used the Andringa template

One board member took the lead w/ staff, hired an editor

Made it sound like us

Don’t wait until it is perfect... you will never approve it!

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Board Table of Policy Contents

Manual

Board Policy Manual 101: Small Group

SG "The single best decision a board can make – investing in ONE voice / ONE written document that contains the

Board Policy Manual 101

policies and direction most valuable January 9, 2019 11:30-1:00p

to that Board in the current season!" - Bob Andringa

"We know we should / it has been

Topics: on our list... we intend to...but we still don't have one." - A Mission Triangle veteran ministry leader

General Outline of a Board Policy Manual

Process guidelines in creating a BPM

Procedures for editing and updating a BPM

Latest trends and shifts in Board Governance

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“A board establishes control over large issues with broad policies. The board decides what to have policies about, the level of detail needed.”

11/20/18

Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Roles) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

www.PolicyGovernance.com

How does being Christian change our practice?

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“96% of Board chairs and 90% of ED’s say that working together (board and staff) as a collaborative team toward a common goal is essential.” -2017 Index

Board as Staff Board as Managers Board as Governors Board as Advisors Board as

Figureheads

Legal responsibility resides with the board

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Legal responsibility resides with the board

Legal responsibility resides with the board

Legal responsibility resides with the board

Legal responsibility resides with the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the CEO

Organizational objectives are set by the board

Organizational objectives are set by the board

Organizational objectives are set by the board

Organizational objectives are set by the CEO

Organizational objectives are set by the CEO

Strategies to achieve organizational objectives are developed by the board

Strategies to achieve organizational objectives are developed by the CEO

Strategies to achieve organizational objectives are developed by the CEO

Strategies to achieve organizational objectives are developed by the CEO

Day-to-day operational authority rests with the board

Strategies to achieve organizational objectives are developed by the board

Day-to-day operational authority rests with the CEO

Day-to-day operational authority rests with the CEO

Day-to-day operational authority rests with the CEO

Day-to-day operational authority rests with the CEO

The board spends most of its time doing the work of the organization

The board spends most of its time supervising the work of the organization

The board spends most of its time directing the work of the organization

The board spends most of its time reviewing the work of the organization

The board spends most of its time affirming the work of the organization

Primary board output is labor Primary board output is

coordination

Primary board output is direction “Five Primary Models board for Boards” output - © is counsel 2004 R. Terrence Primary endorsement Jackson

board output is

Board and Chief Executive

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Board as Staff Board as Managers Board as Governors Board as Advisors Board as

Figureheads

Legal responsibility resides with the board

Legal responsibility resides with the board

Legal responsibility resides with the board

Legal responsibility resides with the board

Legal responsibility resides with the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the board

Reasons for organization to exist are determined by the CEO

Organizational objectives are set by the board

Organizational objectives are set by the board

Organizational objectives are set by the board

Organizational objectives are set by the CEO

Organizational objectives are set by the CEO

Strategies to achieve organizational objectives are developed by the board

Strategies to achieve organizational objectives are developed by the CEO

Strategies to achieve organizational objectives are developed by the CEO

Strategies to achieve organizational objectives are developed by the CEO

Day-to-day operational authority rests with the board

Strategies to achieve organizational objectives are developed by the board

Day-to-day operational authority rests with the CEO

Day-to-day operational authority rests with the CEO

Day-to-day operational authority rests with the CEO

Day-to-day operational authority rests with the CEO

The board spends most of its time doing the work of the organization

The board spends most of its time supervising the work of the organization

The board spends most of its time directing the work of the organization

The board spends most of its time reviewing the work of the organization

The board spends most of its time affirming the work of the organization

Primary board output is labor Primary board output is

coordination

Primary board output is direction “Five Primary Models board for Boards” output - © is counsel 2004 R. Terrence Primary endorsement Jackson

board output is

Grass Roots –

Start-Up - Incubation Adolescent -Growing Mature -

Stagnation & Renewal Decline & Shut-Down Invention

Sustainability Nonprofit Organizational Life Cycle Staff Leadership & Management

Major conflict

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between Executive Director and board

Executive Director makes key decisions w/out board

Executive Direction is inaccessible and unable to meet deadlines

Board Not yet a real

concern

Beginning strategic

Single minded

division of labor founder whose vision

Executive director drives the

still primary decision organization

maker and is less

Sole decision making

accessible to staff / – little to no

turnover hierarchy

Both external and internal demands

Need for well- rounded Executive

Entrepreneurial and visionary leader

director

Sometimes ‘Founder’s Syndrome’

Delegation of authority and clear accountability

Founder likely to leave

Change agent needed

Board size and

Formal governance

Board expansion –

diversity increases structure in place

first ‘outsiders’

Main function is

Small, passionate,

New board members

policy and oversight and homogenous

are added who are

Fundraising becomes board

professionals with

a more important

Members tend to be

expertise

role volunteers or hand-

Less focus on

Good committee chosen by executive

operations, more on

structure – most director

planning and

work done in

Operating board

oversight

committees

Strong emotional

More reactive than

Better board commitment and

strategic in policies

accountability motivation to the

Transitioning to

Key board role is to mission

governance board

ensure organization longevity

Very low board attendance

No new board members

Key board members may leave

Eventually dissolves itself

Major disagreement among board on mission and future

Board members making derogatory statements in public

Finances & Fundraising

No or very high board turnover

Sluggish and less involved

Bogged down in structure that may be outdated

Focus on gathering resources

Limited financial resources

Small budget with limited to no financial/accounting systems

Established relations with key funders but still unpredictable funding resources

Efficient at in-king and volunteer resources

Cash flow problems –

Reliable and diverse funding streams

Significant cash reserves

Expanded major giving program

Have, or are considering, planned

Unable to meet payroll and behind on

Insufficient cash

payables reserves

Relies on lines of

Not yet a

Falling behind on

credit for basic bills concern

financial obligations

Possible bankruptcy

All resources

Loss of financial

Major funders

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What did your Board say?

Role of the Board

1. Chief Fiduciary Agent 2. Protect the mission 3. Maintain a healthy board - CEO relationship (Hire, support

and evaluate the CEO) 4. Ensure impact (metrics and accountability, strategic plan,

resources) 5. Ask tough questions

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1. Chief Fiduciary Agent

A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.

1. Stewardship of tangible assets

2. Compliance with laws and regulations

Chief Fiduciary Agent

3. Stewardship of resources

4. Efficiencies and effectiveness of operations

5. Love and nurture of staff

6. HOW we deliver on our mission!

Biblical Truths & Sound Business Principles

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“1 in 4 board members do not have a strong understanding of the mission.”

- 2015 Survey, Stanford Graduate School of Business

2. Protect the mission ...on behalf of the owners

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Protect your Core By-Laws

Nonprofit: Edify

We will seek to include Christian teaching and principles in every aspect of our work.

It is hereby resolved that this primary purpose cannot be changed unless there are unanimous votes of all then duly elected members of the Edify Board of Directors at a face-to-face meeting in three consecutive years.

“It is the exception that an organization stays true to its mission. The natural course – the unfortunate natural evolution of many originally Christ-centered missions – is to drift.”

- Chris Crane, President and CEO of Edify

The Core Biblical TRUTH

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“If board members aren’t bleeding for the mission, drift will always trickle down.” -Peter Greer and Chris Horst

Board Affirmation Tool 69

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3. Healthy Board – CEO Relationship

“The right leadership structure and the right relationship between the leaders (board and CEO) are the most critical factors of an organization.”

“The clearer the job descriptions (board and CEO) the easier the job.”

- Peter Greer

“As long as the CEO uses any reasonable interpretation of the board’s ends and works within the means... the CEO is authorized to make all decisions, take all actions, establish all practices, and develop all activities.”

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Board Policy Manual - Board Functions

The Board hires, fairly compensates, nurtures, directs, evaluates and if necessary terminates the CEO – their sole agent. (BPM p. Lorem 11)

Ipsum is simply dummy text

Conduct annual, comprehensive

of industry.

the printing and typesetting

evaluation agreed upon of objectives, CEO Lorem industry's – against Ipsum standard has metrics been dummy clearly

the

text and

ever reporting methods since printer (BPM the took 1500s, a galley p. when 13)

of type an unknown

and

Create (BPM p. an 14)

ongoing scrambled specimen succession book.

it to make a type

plan

Evaluate the Executive Director

“CEO selection is the most important thing the board does.”

- Bob Andringa

“A board that provides strong support and guidance can make the CEO role more manageable.” - 2017 National Index

“It is important to provide honest feedback to the CEO so they can be aligned with the board and on the same page.”

- 2017 National Index

“Feedback is the breakfast of champions.”

- Ken Blanchard

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Healthy Board – CEO Relationship cont.

Advice vs. Direction

Mission Triangle: Executive Director 360

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Confusion: The Hats of a Board Member

Volunteer

Implementer

Governance (Board)

Governance (Board)

The board hat is only worn at the board table. The board speaks with one voice.

Role of the Board Chair

“The chair usually spends TWO times (20+ days/year ) the amount of time of an average board member. The chair manages the board so the CEO can manage the organization.” - Bob Andringa

Consensus builder

Fosters an environment of trust

Board culture

Board accountability

Facilitates the board meeting or oversees the facilitation

Resolves conflict

Ensures board’s time is well spent and skills leveraged

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71-74

Board Chair

“Effective chairs embrace their role as a strategic partner and important resource to the executive, and work to build a trusting relationship built on mutual respect.”

- Peter Greer “The board chair is the key to a board working as a collaborative team that works well together toward a common goal”

- 2017 National Index

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Ensuring Impact – Resource Sustainability

Financial Parameters: Ensuring strong financial management and fiduciary oversight (BPM p. 36)

Development Parameters (BPM p. 41)

Advancing and enhancing the funding and public image of the organization

Development Philosophy

Fundraising Strategy / Development Plan

4. Ensuring Impact

The board ensures impact through oversight of two main avenues:

Resource Sustainability Strategic Planning

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79 Development Philosophy Board Policy Manual

“The best source of a major gift is a donor you already know.”

-Joanne Fritz, nonprofit.about.com

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Ideal Development Pyramid

Major gifts are 80% of these individual donors

Dinners, Events, Direct Mail

Your Major

Gifts Team

Executive Director

Board Members

Every Champion

Individual Donors 80%

Donor Acquisition 10%

Grants 10%

Wills

80

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1st Quarter 2019 WORKSHOP: Transformational Giving

Raising Funds in a Healthy Way WS

“Fundraising is proclaiming what we believe in such a way that we offer other people an opportunity to participate with us in our vision and mission.”

- Henri Nouwen

Ensuring Impact - Strategic Planning

84% of organizations report they have a written strategic plan

54% report the board is good at monitoring organizational performance against the strategic plan

26% report board meetings are focused on strategy and policy versus operational issues.

"Boards questions changing should in about the continually internal what is working, and focus external on what strategy, environment”is not, and asking what important is - 2017 National Index

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“VTO” – Traction Side

Triangle based nonprofits using Traction:

Corral Hope Reins House of Hope Iron Academy Jobs for Life Mission Triangle Oak City Academy Raleigh Dream Center Rivercross

Strategic Planning Model

“It is simply impossible to fully pursue diverging goals.”

81-82

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2nd Quarter 2019 WORKSHOP: Strategic Planning

WS“The board ensures that a plan is in

place, that is it implemented and executed according to meaningful

Gaining Traction with one clear plan

metrics and a reporting frequency they deem appropriate.”

- John Carver, Boards That Make a Difference

Topics:

Developing a 1,3,10 year Strategic Plan

Setting quarterly and annual SMART goals

Tracking outcomes AND impact

Conducting effective weekly meetings

5. Ask Tough Questions

How and when should we hire and fire the CEO?

How do we hold board members accountable?

What about board members that don’t show up or come late and leave early?

Is the Chief Executive a member of the board? A voting member?

Why is the “executive session” awkward?

What should we do about CEO behavior outside work?

How do we get our whole board to give financially?

Where do we find good board members?

What should we do about our lack of board diversity?

How do we implement term limits?

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Assessing board performance

Set clear expectations for individual board director performance

Annually assess if individual expectations are being met

Organizational Board Assessment

83-84

VS.

Grace & Commitment

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Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Officers) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

The Board Composition Think Right Skills, not Specific People!

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Litmus test for board members...

Demonstrate an understanding (breadth & depth) of the organization’s why and mission!

Board Composition Worksheet

“The quickest path to losing your spiritual way is through whom you put on your board.”

- Wess Stafford

President, Compassion Intl.

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Effective Board Meetings and Processes: Small Group

You can’t recruit board members without a plan and you can’t retain

SG

them without effective follow-through.

Effective Board Meetings and Processes January 23, 2019

11:30-1:00pm Topics:

Running Effective Board and Committee Meetings

Role of Executive Director in Board Meetings

Roles of Board Officers in Board Meetings

Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Officers) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

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MISSION OWNERS {Recipients & Champions}

Committees

“Committees create a structure for deploying board members to ongoing responsibilities that require group – but not necessarily full board engagement.”

- 2017 National Index

Board

Goal: Policy Board Governance Function| Transparency Outcomes Financial & & Results

for Structure

| Owners Strategic Plan |

Committees

Task Forces

Executive Director

FULFILL THE MISSION

Volunteer

Staff

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How does the committee structure best serve the board?

The work is done outside of the Board Meeting

The work is done by the “right people” (those with expertise)

The Board Chair and ED are ex-officio members of each committee

Committees are fertile ground for your next board members

Committees engage the community and helps grow owners

The Committees provide reports to the board

They don’t make decisions

They may not even make a recommendation unless the board so directs

The Board has to determine when they want the report from the committee so there can be appropriate discussion, Q & A, prayer prior to a decision.

Committees

Current Committee

Clear Charge & Task

Clear Metric/ Measure

Clear Metric/ Measure

Reporting Method/ Frequency

Reporting Method/ Frequency

Reporting Method/ Frequency

Appropriately Staffed / Board Liaison

Appropriately Staffed / Board Liaison

Appropriately Staffed / Board Liaison

Appropriately Staffed / Board Liaison

Action to be taken Priority

Action to be taken Priority

Action to be taken Priority

Action to be taken Priority

Action to be taken Priority

Governance

Finance

Development

Executive

Strategic Planning

Committees study, research, provide options, do not make decisions, but may make recommendations!

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Committee Formation Exercise 86

Finance Committee Description

87

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Board Officers

Chair

Vice-Chair

Treasurer

Secretary

Board Committees and Officers: Small Group

SG

Board Committees and Officers February 5, 2019

11:30-1:00pm Topics:

Main recommended Board Committees

Purpose and authority of each Board Committee

Identifying, nominating, and supporting Board Officers

Term limits for Board and Committees

The job of the committee is to SAVE time, not TAKE time. It is about maximizing skills and leveraging resources. Without committees, everybody has to do everything.

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Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Officers) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

The Board Meeting: Why don’t they show up?

They don’t take it serious, because we haven’t made it serious.

Just 26% report board meetings are focused on strategy and policy versus operational issues.

- 2017 National Index

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Strategic Thinking

Board Meetings

Pre-Work

Utilize Technology

Read all reports

Agenda: During the Meeting

Fellowship, Prayer

Board Development (Spiritual Dev. & Gov. Dev)

Approval of minutes

Discussion of committee and CEO reports

Strategic Plan – update

Strategic Plan – next steps

Actions/Decisions

Executive Session

What needs to be communicated to whom / by whom?

Review decisions and action taken and assignments, adjourn

Post Meeting

Committee Work

Accountability

Board and executives collaborate to reframe problems, address ambiguities and make meaning.

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Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Officers) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

Discernment

Board and executives collaborate to reframe problems, address ambiguities and make meaning with the Holy Spirit at the center of the process!

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Discernment

Decisions that warrant a full discernment process

Shaping your nonprofit identify and mission, policies, values and direction

Decisions requiring significant resources

Key personnel decisions

Key personnel decisions

Decisions affecting the pace and quality of life for staff and constituency

Decisions affecting the pace and quality of life for staff and constituency

Decisions affecting the pace and quality of life for staff and constituency

Peace and unity are two marks indicating that God’s will has indeed been discerned.

- Ruth Haley Barton, Pursuing God’s Will Together

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91-92 Board Discernment

Board Governance Assessment

1. Board Policy Manual 2. Clear Roles and Responsibilities (Board, Chair, ED) 3. Board Recruitment 4. Board Organization (Committees & Officers) 5. Effective Meetings 6. Christ-centered 7. Current Board Status

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