Shaping Your Board - Key Considerations for Success

April 21, 2023 |
3 minute read
|

The structure of a board can help, or hamper, its effectiveness, and consideration of these matters is important to improving a board’s performance. Factors such as size, board chair, diversity and recruiting all play a part in shaping the dynamics related to the structure and membership of effective boards.

Board Size

At one time, boards were frequently quite large. Boards with 20 or more members were common, and those with upward of 30 trustees or more were not unheard of. The presence of honorary members—often substantial donors—was also customary. These practices have changed and the trend has been toward smaller boards—although there is general agreement that no single size fits all. The thinking guiding the trend to favor smaller boards is that they are thought to function better, particularly with respect to efficient workflow and process management. 
In such bodies it can be easier to schedule meetings, secure a quorum and communicate among members. Smaller boards may also share a greater sense of camaraderie and the costs related to board activities will likely be lower. In order for smaller boards to avoid becoming overburdened, the chair may establish ad hoc committees, a taskforce or working groups to deal with specific issues and make recommendations to the full board.

While there is no “one size fits all” solution, a board of five members or less will be challenged to manage even routine workloads while a board that is exceptionally large will likely be unable to achieve cohesiveness and engage every member in a constructive manner. 

Board Chair

If there is a single most crucial factor in board success it is the selection of the individual who will serve as the board chair. The diligence, commitment and character of the chair determine the board’s agenda and the way committees are populated and help to ensure that board and staff view the mission in the same way. Leader, spokesperson, advocate, facilitator, source of authority: the role of the chair is the most demanding and time-consuming. The chair is a guarantor of board effectiveness, enabling individual board members to contribute meaningfully to its work. 


Board Recruitment and Diversity, Equity and Inclusion

If a board is to be successful, the board chair and trustees must be identified, nurtured and sustained. Successful boards thus begin with the recruitment process. It is important that there be a strong nominating committee or board development committee to vet potential members. The central functions of such a committee include identifying and communicating candidly with potential trustees, explaining to them the role of the board and their own roles and responsibilities as prospective trustees, gauging their capacity to serve given their understanding of the role and probing to understand why the individual wants to serve.

Beyond recruitment, however, the committee has a more strategic role in shaping the board as a strong, dynamic entity that understands its function and actively seeks to improve its performance. To take one example, a board should ideally be composed of people with varying backgrounds, perspectives, experiences and expertise. A board that is too homogeneous will not benefit from the range of perspectives that leads to vigorous, well-rounded discussion and examination of key issues and decisions. There can be exceptions. Audit committees are frequently populated by CPAs, auditors and lawyers. Similarly, investment committees benefit from having members with specialized knowledge and relevant industry experience. Even then, however, it is not necessary for every member of the investment committee to be an investment professional.

Functional diversity is only one way to think about diversity as it relates to nonprofit boards. The other is from the perspective of diversity, equity and inclusion, or DEI as it is abbreviated. Historically, boards tended to be homogeneous, as new members were often recruited by incumbent members in the same social, business, community or faith network. Alumni and donors were also primary sources of board members. Just as people with different professional backgrounds can enhance board performance, so too can factors such as color, ethnicity, family or marital status, gender identity, religion, sexual orientation, age and disability, among other characteristics.

Board Onboarding

New board members, who are thoughtfully recruited and carefully vetted, are the lifeblood of the high-functioning board. It cannot be assumed, however, that new trustees coming from a business or professional background—no matter how successful they may have been—will automatically grasp the nuances of nonprofit governance, which may frequently seem foreign to them. Board orientation is the first step. In the weeks leading up to their first meeting as trustees, new board members should attend, as a class or cohort, a briefing led by the board chair or the nominating or board development committee along with the chief executive officer. The format may vary; a popular setting is a day-long or weekend-long retreat prior to a full board meeting, but there might instead be a series of shorter sessions focused on specific topics. It is beneficial if some or all incumbent board members attend in order for the new trustees to meet and begin the process of bonding with their colleagues. 

If you are interested in learning more about what factors can potentially impact your board’s effectiveness, download our whitepaper “Benchmarks for Boards”.  The paper takes a deep dive into more topics such as board committees, governing under duress, responsible investing and more!

Benchmarks for Boards CTA 2022

George Suttles

Author

George Suttles

Executive Director

George Suttles

Author

Allison Kaspriske

Director

Disclaimer

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Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.