Member-elected Board or Self-perpetuating Board? Does it matter?

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We have noticed what may be a trend in recent years away from boards that are elected by members and towards boards that elect themselves. There are several reasons for this phenomenon.

  1. Organizations that are new begin with a founding board that comprises the original membership required for registration. Focused on their new reason for being, they sometimes never seem to get around to developing a membership from among those who share their Mission.
  1. There seems to be less interest for people to “join” causes. At a time when social media allows self-expression without belonging to a formal organization, there seems to be less need and less interest in becoming a member of any one organization. It’s easy to support whatever need appears next. Crowdfunding is growing rapidly – with no organization at all.
  1. Closely related to this last one are the existing members of existing organizations. Older members are dying and the younger ones aren’t very interested in attending annual meetings. The decisions, including elections, seem “cut and dried” already anyway.
  1. Boards are often frustrated in finding the right kind of people to whom its Directors can pass on the torch. Why bother with a member-election when the board know better anyway who meets the need for governance in the future?

Does it matter?

Yes, it matters, because there is a very important element in organizational relationships that is lost in this transition. Accountability.

Every human being or group is accountable to another human being or another group. In the human universe there are no exceptions to this rule. True, there are many efforts to avoid accountability within groups, but I have found it rare for boards to deliberately try to avoid accountability.   More often, there is a simple lack of awareness that there is any real benefit to building a strong membership to whom the board will be accountable.

What I find to be the most common is that boards are a group of healthy people who are so committed and have such integrity that members trust them to do the right thing even if that includes transferring the right to elect future board members to the present board members. Something important is being overlooked here.

It’s ironic that it’s the integrity of most boards that results in such strong trust that boards and members both forget that trust is based on trustworthiness. That’s all accountability is. It’s weighing the board’s performance in the scales and finding it worthy of trust. Or not. The process of accountability is neutral. It can result in re-election or change in board membership.

What appears to be a lack of interest is actually an accountability process that is so informal and without structure that it’s invisible. You can be sure, however, if it became known that the board was self-serving and damaging the organization, the membership would become aware and want to do something about it.

Members are the owners of not-for-profit organizations and churches. There are three basic rights of members that form the pillars of accountability that must be strengthened to maintain healthy organizations with healthy boards.

 

  1. Members have the right to assemble, directly or through their elected representatives.

 

  1. Members have the right to draft, revise and approve bylaws, the document that describes the two relationships between the membership and individual members and the relationship between the membership and the board.

 

  1. Members have the right to choose the board members to govern the organization or church that they own.

 

Each of these rights is accompanied with an equal responsibility. That is where it takes a trained board to assist the members to understand their rights and responsibilities and not to take the easy way out to excuse the members of their responsibility and weaken their right to elect their board in the process.

 

I have often said that if a board does not hold itself accountable, no one is likely to do it. That is a reality of life today, and forms the main reason why boards have to work to develop a membership, report regularly and with integrity to the membership, and encourage the membership to take the election of the board seriously.

 

Members and donors or funders are the root structure of the organizational tree. The board is the trunk, bearing the weight of everything that happens above it in the tree. Active members with a healthy flow of authority and resources to the board give the tree stability. Developing the root structure instead of allowing it to dissipate because it’s invisible and doesn’t seem to do anything useful is a very significant challenge for boards today.

 

Elections by members matter!

 

 

 

 

 

Who is in Charge of Investments?

Who controls investing The RelationshipModel.com

Question:  In our organization our CEO has total control of the investing of all our endowment funds.  Personally, I do not think this is appropriate.  I believe that the board should not delegate the responsibility, because it cannot delegate the accountability.  And just because the CEO is experienced in investing, the board is not excused from the accountability.  What is your opinion of this?

Answer: you are certainly correct in saying that the board is accountable for the investment function of the organization. However, a board of directors of an organization of any size must of necessity delegate most of its functions to someone.  That someone is usually the CEO.

The investment function, however, is unique in my opinion.  I do not believe that the investment of endowment funds should be delegated to the CEO even if the CEO is experienced in investing.  It is too much responsibility to delegate to one person.  Read more

How Can We Build Trust?

statue build trust

Question:  There doesn’t seem to be much trust in our organization right now.  Our CEO says that we should be more trusting of each other, but it sounds more like a demand than a request.  What is going wrong?  How can we build trust in our organization?  We’re paralyzed without it.  People are miserable and not much is getting done.

Answer:  Trust is a misunderstood value among Christians.  It sounds to me like your CEO, in your view, is demanding trust instead of creating it.  If you are right, you have identified the first part of the solution of broken trust for your organization.

I have often said to people who are struggling with trust issues “Forgiveness is free, but trust is very expensive.”  Trust certainly isn’t a value that we can turn on like a faucet just because someone with more authority is demanding it.  That’s because trust is the result of our behavior first and the cause of more good behavior second, not the other way around.

Read more

Boards Can Learn From Mistakes

wrong way

Question:  Our Board of Directors made what I consider to be a very poor decision.  It led to the resignation of our Board Chair, although even the Board acknowledged that she did nothing wrong.  It’s just that the whole thing was handled poorly, particularly how the Board treated her.  I have challenged the Board about this, but they don’t want to talk about it anymore.  How would you handle a situation like this?

Answer:  I don’t have anywhere near enough information about your situation to speak to your specific issue, but what you are describing is all too common for boards.  Perhaps some general comments about boards taking responsibility for their actions will help you just the same.

Sometimes boards follow a good process but still make a poor decision.  Sometimes boards follow a poor process and still make the right decision.

Sometimes boards follow a poor process and make a poor decision.

Read more

The Balance Between Risk and Caution

Risk and Caution

Question:  Whom do you think make the best board members – people who are willing to take risks or people who are very cautious?  Is there a group or profession of people which produces the ideal board member?

Answer:  Both.  A board needs members who can calculate risk carefully.  It also needs people who take seriously their fiduciary responsibility and demonstrate more caution than the risk takers like to see.

Some boards have erred in the direction of reckless and irresponsible “blind faith”.  They have gambled the resources of others and have lost, putting their organizations in financial jeopardy.  Other boards have suffered from analysis paralysis where a group is afraid to take the first step into the unknown.  In this case opportunities for service have been missed and the organization lost the opportunity to make the contribution they were formed to make. Read more

Support at Any Cost?

Accountability

Question:  Some of our Board members are criticizing our Executive Director far too much.  He has barely completed his first year, and already there is criticism for the major changes he has made.  Can you help me with some reasons to give our Board as to why they should follow the leadership of the Executive Director we have chosen?

Answer:  I most certainly agree that your Executive Director needs your Board’s support.  An Executive Director (or whatever title you give to your Chief Executive Officer) can only function with the authority that comes from the Board.  The Board that has chosen the CEO must provide him with the authorization and resources he needs to fulfill the demanding role of leadership.

The difficult challenge for any board, however, is to define what support is.  Read more

Setting Limits for Length of Board Service

Setting Length of Board Service Limits | RelationshipModel.com GoveranceMatters
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Question:  We seem to have an “old guard” and “new blood” on our board.  It’s obviously just a matter of time before the power shifts to the new members who want to breathe new life into the Board and the whole organization.  I think this is unnecessary pain we’re going through.  How should a Board handle the length of time a person can serve on a board?

Answer:  First of all, it’s not necessarily the “old guard” that causes the problems that boards can have.  People who have been around a long time can also accumulate wisdom and keep the organization on course.  They don’t only hold to blind obedience to harmful tradition.

Still, the problem you raise is a common one for the same reason that many other problems exist.  Boards don’t deal with problems until they occur.  The solution to the problem of board members dying but not retiring should be solved before there is a problem.  That is done in the Board Governance Manual, if it hasn’t already been covered in the bylaws by the members. Read more

God’s Design of Relationships

God's Design of Relationships | RelationshipModel.com
photo courtesy of flickr

You mention on your website that the Relationship Model™ is patterned after God’s design of relationships in the Bible, but you don’t explain that anywhere.  Can you give me some more insight into the connection between God’s design of relationships and your governance, leadership and management model?

Thanks for asking.  I have been meaning to develop a section on this subject for some time.  You’ve given me the nudge to begin it. Read more

Monitoring and Managing Board

Monitoring or Managing
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Question:  The Board of Directors for which I work is making a transition from a managing board to a governing board, but I think they are just managing in a different way.  Could you tell me the difference between monitoring my management and managing over my shoulder?  The line between the two seems a little vague right now.

Answer:  The answer to your question lies in the limitations of your authority that the board has delegated to you.  A governing board must monitor your use of the authority they have delegated to you to satisfy themselves that you are fulfilling their expectations of your responsibility without violating the limits of your authority. Read more

Minutes and Daze

Board Meeting Notes
photo courtesy of flickr

In the course of my work in many countries I get a lot of questions, but one that overlaps all the borders I cross is this one.  If you are asking the same one, I hope this answer will help.

Question: Our Executive Director’s Administrative Assistant recently took over the role of taking board minutes from her predecessor, but she doesn’t have the same gifts for accuracy. Before, we could always assume that the motions were recorded accurately, but now I get the minutes and find they aren’t the same as I thought the decision was that we made. How should we handle this? Read more