Honor your commitments with integrity.
Over the past few weeks the media has highlighted stories of two young organizations with serious lack of financial controls. The first was the material girl. I wrote an earlier post about the hot stinking mess she left in Malawi and now it’s an interesting new controversy with Greg Mortenson, author of Three Cups of Tea and Stones into Schools and founder of the Central Asia Institute (CAI).
What disturbs me most in both these situations is the stunning lack of board governance and financial controls. It looks like in Mr. Moretenson’s case his multimillion dollar organization only had three board members- one of which was him! This organization has been around for almost 20 years, raised millions of dollars and has a multimillion dollar budget, but they have no established board. I do not count him and two other members as a board. I consider that to be a lunch date.
Every day I coach new executive directors and great people with wonderful visions wanting to start a new nonprofit. My advice is always the same– invest the time and energy in board recruitment and development. Poor governance and lack of oversight are unacceptable and will ultimately hurt the communities you want to help.
Here are the 4 most essential responsibilities of a board.
If your board is not doing these – then I would prepare myself for a crash because one will be coming.
Select the Chief Executive Officer. They should search for and find the most qualified individual to lead the organization. That is not always the founder. It’s the board’s job to make sure the correct person is sitting in the top chair. They should make sure they have the support needed to help move the organization forward. They should provide regularly scheduled evaluations of his or her performance.
Ensure effective planning for the organization. A board must actively participate with the CEO and staff in the planning process. They must also make sure those plans are being implemented. They have to makes sure those plans are resourced even if it means raising the resources needed themselves. It is there job to make sure the work that is being done is impactful. That means holding people accountable and evaluating and assessing the outcomes of those plans.
Manage resources effectively. You want to keep your tax status? Do you want to keep your donors? Do you want to stay out of the NY Times and off of 60 minutes? Then handle your fiduciary responsibilities effectively and with integrity. The board is responsible for developing / approving the annual budget and ensuring proper financial controls. The board is ultimately responsible for ensuring the organization is not only following legal standards but ethical norms.
Monitor Program Effectiveness. The board needs to determine which programs are the most effective. What is the return on impact and investment? They need to make sure programs are being monitored and managed on all levels with integrity.
If we want our work in this sector to last the test of time we have to offer the full story of this work. Very soon we have to get past the idea or good intention. The good idea or intention are never enough if that is all you have. We have to build our organizations for the long run– they have to be able to go the distance. To do that you need strong foundational pieces in place. You need strong boards and governance. Not just a fancy name or a good story.
You cannot just have the sizzle. You need the steak.