MaRS Library The role of a successful board
It’s quite simple: boards govern while management manages. Board members are stewards. Good boards work on the premise that while accountability can be delegated, responsibility cannot. Boards are responsible to their members for the success and failure of the organization. They oversee the conduct of the business or the NPO, always through its leader, not around him or her. For this process to work, the operational leader must report to the board, not be a member of it.
The overriding role of the board is threefold:
- Financial: This applies to both for-profit and NPO ventures. It involves overseeing the financial results, judging the forecasts, ensuring that lines of funding are available, seeing to the fair allocation of earnings, and guiding the leader to always focus on the right path to growth, financial security and success. This sounds like a business but it equally applies to NPOs. Not only does it take money to make money, it takes money to serve a community with a worthwhile mission.
- Visionary: This means “doing the right things” as opposed to “doing things right.” While the strategic plan should come from the management, the board can provide insight, vision and focus for the strategic objectives and the way in which they can be achieved. Given their wider scope and experience, board members can bring ideas from their own backgrounds to assist with strategy and implementation.
- Reinforcement: This includes the strengthening of the skills of the board itself as well as the staff. It involves being transparent, adding wisdom to the day-to-day workings of the organization and ensuring that the many choices facing the organization are prioritized, while watching over the balance of compensation, authority and responsibility. This reinforcement bears upon all members of the organization—from the key executive through to the staff.
The importance of reinforcement
The first two roles above are easily organized into reports and periodic agenda items. Too often, especially when times are tough and the competition is making gains or the community is not responding, boards spend too much time on the money issues, not enough time on the review of the current strategy, and little time on the soft stuff of reinforcement. The third role requires the board to step back now and then to reflect on the greater good of the venture. A balanced board led by a balanced chairperson is sensitive to this three-sided leadership triangle.
What is “accountability”?
Behind all of the nice words applied to the ideal attributes of any board, the strongest is “accountability.” Accountability requires good governance from the NPO sector as much or more than it does from the for-profit sector. It is the obligation to demonstrate and take responsibility for performance in light of agreed expectations. Accountability involves due diligence. There is a difference between responsibility and accountability: responsibility is the obligation to act; accountability is the obligation to answer for an action.
Bourgeois, D.J. (2009). Charities and Not-for-Profit Administration and Governance Handbook (2nd ed.). Markham, Ont.: Butterworths Canada Ltd.