While all governance errors are important to avoid, perhaps the most damaging one is the Failure to Understand Fiduciary Duties. As stewards of the organization’s financial welfare, board members must understand the impact of any decisions they make or choose not to make. Since these decisions often have far-reaching implications, not only on the association’s annual bottom line, but also on future financial outcomes, it’s crucial that boards understand the consequences of any actions they take. Board members should know how to read a financial statement, have sound investment advice to counsel them and feel comfortable asking hard questions at any time to alleviate or dispel concerns. Read our blog on How to Break Down Financial Statements to learn more.
Failure to Achieve Meaningful Results at Board Meetings can often result in too much ‘kicking the can down the road’ in order to avoid confronting serious or divisive issues. This will only result in creating a backlog of issues that will eventually have to be dealt with later. In some instances, it may be too late to resolve them efficiently. To avoid this situation, agendas should be thoughtfully prepared in conjunction with staff and carefully facilitated to make the best use of the limited time available. Meetings should stay on track and not be diverted by extraneous conversations or nongermane issues. Agendas should be sent at least one week prior so that members have ample time to familiarize themselves with the content. A consent agenda can help save time for items that are merely information-sharing and require no definitive action. Items that will involve considerable discussion should be tackled first. Minutes with clearly defined follow-up items should be sent no later than one week after the meeting. Keeping good records is vital to board success.
Insufficient Board Orientation is often a cause of lackluster board performance due to poorly delineated duties and expectations. Sufficient time should be taken to review the background and history of the organization, the roles of staff and each committee as well as the duties of every officer and board member. Legal obligations plus strategic goals should be reviewed along with rules for effective discourse such as allowing for a diversity of opinions, keeping confidentiality, maintaining professional courtesy, and following parliamentary guidelines like Robert’s Rules of Order.
Failure to Develop a Strong Leadership Pipeline is one of the many reasons why boards (and associations) fail to thrive. Without taking sufficient care to thoughtfully recruit new members, boards may either find themselves with open slots or slots filled with individuals who are less than committed to fully executing the duties of the position. It’s important that board presidents encourage members and past presidents to actively recruit new board members. Newsletters can promote board and committee chair leadership by including a complete job description and time commitment. Consider holding a Leadership Summit at an Annual Conference and inviting new members to participate to mentor them for future board service. Active committee chairs should also be encouraged to run for board positions.
Failure to Rid the Organization of Ineffective Programs is something boards often avoid. Perhaps it is a program or service that members have come to associate with the organization without realizing it is operating on a low or non-existent profit margin. Perhaps it is a pet program championed by a past president or founder who does not wish to see it disappear. Whatever the reason, boards need to regularly review what’s working and what’s not across the board to maintain profitability and sustainability and stay in tune with what the majority of members want. Member surveys can tell a lot if the right questions are asked. In addition, boards should review the profit and loss of each program or service. Failure to do so can result in inefficient or sub-par service to members, potentially generating a drop in membership retention and a reduction in member loyalty. Members would likely seek out the services they need somewhere else.
With organizations having so much to gain and yet so much to lose, the importance of strong and responsible governance cannot be emphasized enough.