Two types of boards are compared here: a “hands-on” board or a “governance” board.
The hands-on model is common in small organizations where board members are also full-time workers, such as clubs or food co-ops. Board members are selected for their ability to contribute as workers, essentially, with a workload and time commitment that goes with it.
The governance model is far more common, especially in organizations with a large number of owners, and is officially what NCF has used since the mid-1990’s (when an exasperated NCF executive director enrolled NCF’s board in a United Way/YMCA Board Development course, to reduce micro-managing and divisiveness).
In the governance model, the board hires a person to be in charge (called “Executive Director” at NCF). The Executive Director (ED) runs the organization, and the board is (or should be) virtually invisible and fairly idle in normal times. The purpose of the governance board, essentially, is to watch over the organization on behalf of owners, and jump into action during abnormal times (eg., to hire an ED). Board members are selected for their ability to recognize (not create) good plans and good management, and the workload is manageable as an unpaid occasional volunteer.
Below is a list of roles of a governance board, based on United Way/YMCA BoardWalk material.
A governance board:
· Is steward of the long-term vision, mission, and traditions. Directors acquaint themselves with the history and purpose of NCF, to ensure it stays true to its traditions and to the desires of the majority of its owner-members.
· Promotes the organization in the community (eg., by using personal connections, and by explaining the vision, traditions, and mission).
· Perceives changes in the community and adjusts NCF vision and mission to keep NCF relevant.
· Sets personnel policy; hires, counsels and evaluates Executive Director
· Monitors and evaluates the organization's operations, using well-known simple metrics.
· Approves the budget and monitors the financial integrity of the organization.
· Serves as a review panel and sounding board for the Executive Director, providing expertise, wisdom and an objective viewpoint.
· Establishes a structure to carry out the Board's work (committees, resources, etc)
· Maintains and builds the Board. The Board should evaluate itself and recruit Board members from the community who have skills to complement existing members and the demands of NCF (eg., someone with a financial background, someone with a legal background, etc).
· Is accountable and legally responsible for the organization. This requires directors to act with due care and diligence, to the best of their abilities and as would be expected of a reasonable person with their background.
[The BoardWalk material includes “Approves/sets policy” as a board role, but if it’s hard to draw the line between policies that should be set/approved by the board and those with which board involvement would just invite micro-managing, then maybe “policy approval” can cause more distraction, micro-managing and conflict than it’s worth. Instead, the board can shape what the Executive Director does by describing a general vision for the organization, and then give the Executive Director latitude to develop appropriate policies within that context. The board can stay away from details and instead track progress by monitoring key macro parameters.]
A governance board follows an annual calendar, and do (or have done) work between meetings to ensure that the meetings themselves run smoothly. Materials are prepared and reviewed ahead of meetings. Meetings have a formal component and are mostly a chance to hear from the ED and for informal discussion, and dealing with unusual circumstances and opportunities. It is unrealistic and unwise to just show up, hear about problems and proposals, and make decisions without anyone having time for adequate consideration or research. Also, at NCF, with its founding idea of open governance, preparing materials ahead of the meeting and posting them online allows members to review and decide if they want to attend a particular board meeting.
It’s probably obvious why NCF uses the governance model, but one final point: If NCF were to operate as a hands-on board, expecting its unpaid directors to directly manage an organization serving thousands of people, it would probably have difficulty attracting and retaining board members!