Welcome to Governance Month
As we’ve said a few times now—thank you for the fabulous theme month of December. With your participation, it became bigger and better than we could have imagined.
As I introduce a theme for January—I’m wondering if we can come anywhere close. Our theme:
It perhaps doesn’t ignite the passions and creativity of big ideas. But would anybody deny that association boards play a huge role—for good or ill (and, as always, probably both)—in our organizations?
Want to translate it into a big idea: Somebody write this post for me and I’ll promise to write a rebuttal taking an opposing view: “What if associations could do away with their board of directors—why should they (or shouldn’t they) and what would that look like?”
We’ll have some video of association CEOs and (cross my fingers) some insights from a couple of brilliant governance experts, as well as some thoughts from the usual crew of Acronym bloggers. To start things off, here are some stats, with my commentary. These are from ASAE & The Center’s relatively new Benchmarking in an Instant program. (Note: these numbers are continually updated as someone new completes the survey. “n” is the number of respondents at the time this was written.)
First, some board composition stats (n=62):
Number of voting board members: 15.2
Number of nonvoting board members: 2.8
Number of board members under age 50: 5.6
Number of female board members: 4.4
Number of board members that are members of ethnic or other minority groups: 1.2
My thoughts—Not sure what to make of the board size. There are many who preach that smaller is better, and while I don’t think you can govern effectively with 75 or 100, I think there are some advantages to a 40-person board and other advantages to a 10-person one. The culture of the board and the organization are much bigger factors in how effective the board is.
The age stat doesn’t really bother me the way it might other people. A fifty-year-old has another 15 or 20 if not more years of career left, and you figure he or she has 25 or so years of career service already. I would expect, and don’t think it a bad thing, that boards skew older. Maybe I’d be more comfortable if this number were 6 or 7. What would worry me is if I looked at my board and I saw it being pretty much all to one side of age 50.
The gender question – eh, it’s not good enough, but I would guess that this is an improved number over a few years ago, and I think it will continually improve. I hope we keep doing better, and quicken the pace some. Now ethnic and other minority groups: that’s a pathetic number; we’ll have to do better than that to survive.
Some policy questions: We asked association execs if their boards have formal, written processes, policies, procedures, or roles related to the following (n=69).
Monitoring the financial and risk management of the association.
Certainly the right piece of pie is larger, but if you don't have a process, policy, or procedure for this, what do you have one for? I don't understand the quarter of associations who don't.
Managing the investment portfolio.
Again, a third of associations don't have this policy? Fiduciary duty.
Requiring periodic rotation of auditing firms and/or their partners on the association's account.
Guess this is a best practice that hasn't caught on yet. If you don't have such a policy, Google "Enron audit firm."
Specifying its protection of whistleblowers.
So much to learn from Enron.
Specifying conflict of interest.
Now that's more like it. I mean you gotta figure there's gonna be three clueless percent out there on just about any question.
Assessing the board's overall performance.
Not surprised really, but seems like it would be a good practice.
Evaluating the performance of the executive director.
Just wow! Was thinking this one would look more like the conflict of interest graph. Why would any CEO not be pushing for this until he or she got it through? Would seem essential if you value your livelihood.
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Comments
Thanks for the new theme! I'm not going to do a blog post on this topic this time, because my feelings about boards are based on limited personal experience and not very helpful - I think boards are completely pointless, do nothing but slow down progress, stunt innovation, stifle any creativity, are completely out of touch with the workings of an organization at ground level (where it matters), drag out irrelevant governance minutiae that have no bearing on business intelligence, and exist only to pad resumes for people who are too busy to otherwise give a crap.
At Jeff De Cagna's session at a recent ASAE conference (can't remember which one) he asked for "crazy ideas" or something like that and mine was to have Board Survivor Island (which got a big laugh in the room and has been mentioned since) - where board members should present mission-driven ideas and plans for implementation, experiment fast and fail fast and competitively to let others get a chance to do the same. I was completely serious about that. The whole system is totally broken IMHO - given the number of associations I've heard of in serious financial troubles, they are not even doing the job of fiduciary duty properly.
Phew! Rant over. Not that I have an opinion or anything. :)
Posted by: Maddie Grant | January 8, 2010 8:45 PM
Maddie - I hate it when you hold back. If you have an opinion, you should just let it go (insert smiley emoticon thingy).
I'll wait to see if anybody wants to publish a post answering the question of doing away with boards, but if nothing comes in this week, I'll take your comment as the closest I'm going to get and try to write an opposition post.
Posted by: Scott Briscoe | January 12, 2010 3:35 PM
LOL! A friend said to me that people should print my comment and show it to their boards and say, "this is what some people think of boards - how would you refute it?" and see what they come up with. I know I'm not the only one who thinks like this. If you want me to write a more measured and less ranty version for you to rebut, just let me know :)
Posted by: Maddie Grant | January 13, 2010 10:44 AM
No way - full rant is perfect (and always the way to go). Wish I could do a full rant rebuttal, but that wouldn't work. I think there's a lot of truth in your rant, so rebuttal will have to be more subtle and nuanced.
Posted by: Scott Briscoe | January 14, 2010 11:51 AM
I think I'm going to write a post - but I don't think it will be doing away with Boards, but we will see. Scott I will let you know when I post. My blog is at www.onemoreassnvoice.wordpress.com - something coming in the next day or two :)
Posted by: Cathi Eifert | January 14, 2010 1:05 PM
The problem isn't "boards" per se, just like the problem isn't conflict, strategic planning, or hierarchy. It's the way we DO all those things that's the problem. And I think our problem with Boards is highlighted by Maddie's Survivor suggestion--we are generally unable to question their relevance. That's not allowed, because they are in the bylaws. Everyone else does it that way. We've always done it that way. Rarely are we allowed to have a conversation about the essence of our enterprise and what kind of structure we should have to make the highest level decisions about that enterprise. That's considered too much work or too difficult. It is a big task, but SOMEONE in every organization (nonprofit and for profit) should be thinking and talking about that all the time.
Posted by: Jamie Notter | January 18, 2010 7:15 AM