This article is adapted from Gayle Gifford’s book, How to Make Your Board Dramatically More Effective, Starting Today ($24.95 each + shipping, quantity discounts available).
For more information about the book, click here.
A Board Member’s Guide to Asking the Right Questions
“The art and science of asking questions is the source of all knowledge,” said American novelist Thomas Berger. We’ve known that since ancient times, Socrates being a notable advocate.
Your willingness to ask questions – 34 of them, in fact – lies at the heart of your becoming an effective, dare I say extraordinary, board member.
In this excerpt, adapted from my book, I’ll focus on just three questions board members should ask themselves.
Is Our Organization Worthy of Support?
Can your organization pass the Mom test?
Let’s say your mother comes to you for advice: “Dale, you’re well off, your sisters don’t need my help. I’ve decided to leave what money I have to charity. What do you think of my giving it to the group you’re involved with?”
When deciding what to say, you would probably consider two questions. The first is likely to be: Is this organization worthy of my Mom’s money?
If your group has focused on your mission, there should be little doubt in your mind. As suggested in chapter 3, you already know how much your community needs your organization. You’re measuring your impact as chapter 7 recommends. Further, people outside the organization can testify to the importance of your work. Your peers consider your programs a model to imitate. That’s all in your favor.
But, although worthiness is essential, it still isn’t enough to meet the Mom test. You can probably think of a few worthy causes where you question just how efficiently they operate.
Which brings me to the second Mom question: Is this a place my mother can trust with her money?
Trustworthy organizations deliver on their promises. They accept nothing less than ethical behavior. They are open, honest, and aboveboard. Their directors and staff consistently act in the best interests of the community and the people they serve. And they spend their money as their donors intended.
In other words, exemplary organizations combine worthiness of cause with trustworthy behavior.
So lead with your mom in mind. If your organization isn’t worthy of her support, it isn’t worthy of anyone else’s, either.
Does Our Board Focus on the Financial Data That Matter Most?
Which of the following describes your board when finances are discussed?
a. Directors scrutinize every line item and grill the CEO on any variances.
b. Directors avoid eye contact with the treasurer and think, “I’m really glad Mary understands this stuff.”
c. Directors don’t worry about a thing because their CEO has the finances under control.
I hope you’re thinking, “None of the above,” because the preferred answer is:
d. Directors review a concise report of key financial targets, raise questions about variances, and persist until they’re satisfied corrective action will be taken.
Most of us have a love/hate relationship with things financial. We love money but hate the thought of managing it.
How many of us stick to household budgets or follow long-term investment plans (or even have such things)? And reading corporate financial reports – UGH, I’d rather eat a cricket! Unfortunately, what may be acceptable in your home isn’t sufficient to carry out your fiduciary responsibility as a board.
Although you needn’t be a certified public accountant to understand nonprofit finances, you do need to know enough to ask and answer the questions that matter.
When I worked at an international children’s charity, our board used a handy tool to hone in on the most important financial indicators. We called it a top line report; others use the term dashboard.
Each month, rather than scan pages and pages of financial data, our directors reviewed a single sheet on which ten indicators were listed. Every director, regardless of financial acumen, could see at a glance whether or not our $25 million organization was on target.
If an indicator was off, staff attached a report explaining what action was underway to address the problem. A complete explanation was available to directors who wanted it.
Of course, the reason for knowing your financial condition is so you can act promptly to keep your organization solvent. Identifying the problem only means something if you take steps to remedy it – wishful thinking won’t fill your coffers or trim expenses.
Or, as Eleanor Roosevelt said, “It takes as much energy to wish as it does to plan.”
Do Our Committees Improve the Functioning of Our Board?
Draw a line down the middle of a sheet of paper. On the left side, list all of your board’s standing committees. Then, on the right side, write down what each committee is expected to accomplish this year.
How did you do?
Directors can usually answer the first question. The second gets to the heart of effective committee use.
Committees work best as mini-think tanks that can summarize particular issues, offer options, and lay out their implications. Great committees improve the effectiveness of the full board without usurping its authority to make decisions.
On the other hand, committees that make decisions that should go before the full board or that allow the board to abdicate its responsibility make your board less effective. Having a finance committee, for example, doesn’t exempt the remaining board members from their fiscal responsibilities.
In assessing the need for individual committees, ask yourself the following:
- Does this committee make our board more effective?
- Does this committee improve our board deliberations?
- Does this committee help advance our strategic plan?
- Do we really need an ongoing committee, or could this project be completed by a time-limited task force?
- Is this committee still needed at all? Can we dissolve it (in accordance with the bylaws, of course)?
In addition to your written committee description, it’s good practice for the board to assign every committee a set of annual objectives. Some might be routine (complete CEO performance review). Others might be special projects (create a policy for accepting corporate gifts).
Too many boards have a tendency to proliferate committees unnecessarily. Try limiting standing committees to the fewest needed. State or provincial law will advise whether you’re required to have any standing committees at all.
About the Author
Gayle Gifford brings over 30 years of experience to her work with nonprofits – from her personal activism for peace, disarmament, environmental, human and civil rights, to her professional work as a consultant and former director of development and senior nonprofit manager. Visit her Web site or blog, The Butterfly Effect, at www.ceffect.com. Or connect on Twitter @gaylegifford.