Governance Articles

Board Benchmarking


New pressures require that association boards do the right work -- macromanagement not micromanagement. They should analyze market forces and trends, articulate clear strategies to attack them, demand and evaluate results from staff and volunteers, assure that resources are applied to mission priorities, and give implementers room to be creative.

How can boards shift from being tactical to being strategic? By benchmarking, a technique widely used in for-profit firms to gauge their performance against a baseline, best practices and their competitors. Board benchmarking has three basic components -- individual evaluation, board evaluation and organizational evaluation.

Individual evaluation identifies the personal thinking preferences of each board member using instruments such as the Meyers-Briggs Type Indicator® or the Hermann Brain Dominance Indicator administered by certified evaluators. Members should be encouraged to share their confidential results with one another because they explain where and why conflicts and communications problems occur within the board. Armed with this knowledge, board members can learn how to work more effectively by appreciating their differences. Both indicators can be used to create a group profile of the board that can be used to help guide the nominating committee in selecting candidates that will round out the leadership.

It also is useful to compare group profiles of the board, senior staff and committee chairs to determine if there are serious differences in work preferences that can impede understanding. For example, a board full of linear thinkers may be frustrated by a staff of conceptualizers. Knowing that the board prefers orderly, fact-based analysis would enable the staff to present concepts in a more organized way.

Board evaluation measures the board's performance against generally accepted norms and best practices. One element is board orientation that describes the fiduciary responsibilities required of board members by law and defines the proper roles of leaders, staff and volunteers. This assures that the board comprises members who accept that their duties are serious, that their responsibilities are to the membership as a whole and that their job is to steer, not row. A helpful tool for role definition -- an association authority matrix -- was devised by Fred Johnson, president of the Credit Union Executives Society in Madison, WI (608/271-2664). He presented it at the 1996 ASAE Conference and he has been generous in making it available.

Board evaluations can be done with self-assessment instruments. ASAE's Information Central has examples. Good ones describe best practices in areas such as strategic thinking and planning, fiduciary responsibilities, board selection and orientation, board operation, and board/staff relationships and ask respondents to rate their board against them by answering a few closed-ended questions. The instrument also should allow for open-ended comments on how board performance could be improved in each area. It is a good idea to have a nonstakeholder administer, tabulate and facilitate discussion of the results of the self assessment.

Organizational evaluation compares the board's structure and performance with the accomplishments of others or standards and guidelines. If another association has achieved successes through governance transformation, do a side-by-side analysis of their leadership policies and decision-making processes with yours. Most executives are willing to share information and a post on the Executive Management Section's listserv is likely to yield information about who's doing what and how.

Interestingly, association boards and for-profit boards have much to learn from one another. Recently, the National Association of Corporate Directors in Washington, DC, (202/775-0509; web: www.trainingforum.com/ASN/NACD) issued its first guidelines for members of corporate boards because of criticism that corporate board members too often are beholden to the CEO, are not required to have a stake in the company and fail to protect the interests of shareholders. The guidelines boil down to a simple mnemonic -- NIFO (Nose In, Fingers Out), good advice for association boards, as well. While not applicable across the board, these guidelines can help association boards understand how the for-profit world is organizing its governance to deal with a supercompetitive environment. Another source of guidelines and information is the National Center for Nonprofit Boards in Washington, DC (1/800-883-6262, 202/452-6252, web: www.ncnb.org).

New uncertainties make it imperative that association boards clearly understand their responsibilities, focus on the future and make sure that the mechanisms of governance do not inhibit market responsiveness.



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