SIXTY-NINE percent of nonprofit boards struggle with governance-related issues. This is according to BoardEffect, a US-based solutions provider for nonprofit boards, which conducted a study in 2015. Of these respondents, 40 percent missed their annual fund-raising goals, 29 percent had “serious financial difficulty,” and 16 percent struggled to draw new and effective board members. The study also cites five governance challenges facing today’s nonprofit boards, along with tips in addressing them:
Challenge 1: Implementing best practices
Adopting effective board governance practices—whether fund-raising, board education, composition or others—is a common challenge. Since board members meet infrequently and are typically busy people with many other responsibilities, one can assume that the board and its rules of governance simply aren’t top of mind for members much of the time.
The solution: “Remember that educating board members on best practices is a marathon, not a sprint,” says Dottie Schindlinger, vice president and governance technology evangelist of BoardEffect. She suggests providing board members with information on best practices and then having people take turns presenting one new concept or practice at each meeting.
Challenge 2: Building board diversity
Ethnic and gender diversity is a key issue for virtually every board and for good reason. Research shows that the greater a board’s diversity, the better the organization performs as a whole. And yet, despite this evidence, many organizations struggle to make their boardrooms more diverse.
The solution: Schindlinger says this doesn’t mean the board should only focus on mirroring the demographics of the community it represents. “Organizations first need to determine the skills and expertise they need on the board—for example, finance, fund-raising or advocacy—and then find diverse candidates with those skills,” she adds.
Challenge 3: Overcoming the fear of social media
Is your board a bit fearful of social media and the powers it can unleash? That’s common because platforms like Facebook and Twitter can amplify angry voices along with more moderate ones.
The solution: Organizations that recognize and use the power of the public voice, Schindlinger says, will out -perform their peers, especially when a board is about to make a big decision.
Challenge 4: Dealing with nonperforming board members
An annual PricewaterhouseCoopers survey asks corporate board members if a peer on the board should be removed for any reason. Over the past five years, “yes” responses have hovered around a third. This year it jumped to half-and Schindlinger bets it would be higher if conducted in the nonprofit space.
The solution: “This is an example where technology could be a game changer,” Schindlinger says. About half of boards do a yearly evaluation, but because the process rarely allows the board to respond anonymously and securely, they don’t typically evaluate peer performance, and few boards act on evaluation results.
Challenge 5: Using technology effectively
Smaller boards in particular are often reluctant to explore technology, fearing the cost and learning curve. They often fail to realize that there are solid tools available for nonprofits of any size and some are low cost, less than hiring a staff member, in fact.
The solution: “The only way we can move the needle for this organization we all love is by staying in the loop through technology, Schindlinger says. “I don’t know how it would work any other way.”
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The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and CEO and founder of the Philippine Council of Associations and Association Executives (PCAAE).
PCAAE is holding its 6th Associations Summit on November 23 and 24, 2018, at the Subic Bay Exhibition and Convention Center (SBECC).
The event is hosted by the Subic Bay Metropolitan Authority (SBMA) and supported by the Tourism Promotions Board (TPB).
PCAAE enjoys the support of ADFIAP, TPB, and the Philippine International Convention Center. E-mail: obp@adfiap.org