BoardSource has recently published its NonProfit Governance Index 2010. Tesse Akpeki says the findings hold valuable insights from the US for governance development in the UK.
The BoardSource Nonprofit Governance Index 2010 updates baseline data about board practices in the United States. There is a continuous quest for better boards. The index reveals that the global recession has taken its toll on nonprofits. The findings are illuminating and show that:
Boards have between 15 - 22 members. Smaller boards are preferable. As board size goes up, attendance goes down. 90 per cent of small boards have average attendance of 75 per cent - 100 per cent, compared to 73 per cent of large boards.
The index stresses that diversity is and should be defined in the context of each organisation and its community. Increasingly, governing boards are convinced of the need to reflect their communities and ensure that a multiplicity of voices contribute to the organisation.
In relation to board meetings the survey reveals the need to balance the number of board meetings with the governance work that must be done. This requires looking at not only the frequency of meetings, but the length of meetings, agendas and materials. Recognising that it is the quality rather than the quantity of time spent in meetings, boards are taking advantage of useful techniques such as consent agendas and dashboards to streamline meetings, and technology to expedite information sharing and board meeting participation.
Turning to committees, the findings are interesting. When committees are working well, they support the work of the board, providing board members with a way to dive more deeply into the strategic issues affecting the organisation.
Successful committees require clarity of purpose, coordination and strong communication with staff. Committees are being put under pressure, resulting in a reduction in the number of committees. The focus is on core board functions – board self-management, finances and fundraising. In the spirit of form following function, ad hoc forces are increasingly being used to address critical issues at hand.
Chief executive ratings
In current times as never before, the board and chief share leadership and responsibility for their organisations. Some 84 per cent of board members give the board an A or B for supporting the chief executive. This was at variance with the chief executive perspective where only 69 per cent give their boards the same top marks. On a positive note, previously only 29 per cent of chief executives were committed to staying in their position but in the 2010 index this number rose to 56 per cent. This probably reflects the reality of the current economic environment.
The average tenure of chief executive is 8.2 years, with the chief executive managing three board chair transitions. The maximum tenure of board chair is 3.3 years (chairs usually serve for two terms).
On average the maximum tenure of a board member is 7.2 years, with the most common board member term structure is two consecutive three–year terms.
In relation to board recruitment, the chief executives' highest priority is professional skills. Board members' highest priority is the ability to represent constituents.
Overall the index showed priorities from different perspectives, and criteria from different perspectives. By and large board members are volunteers with only 3 per cent of nonprofits paying board members an honorarium for their service. 26 per cent reimburse board members for travel and other meeting expenses.
Tesse Akpeki is a lawyer, chartered secretary, coach, facilitator and accredited Centre for Effective Dispute Resolution mediator
