Governance Articles

Shaping Up Your Board Requires Control, Planning

Last November, the National Association of Corporate Directors issued a new set of guidelines for the conduct of corporate directors. This prompted me to consider appropriate guidelines for association directors. I thought about the many association boards we have worked with over the years, and what distinguished those that were successful and those that were not. The result of this review was the following set of guidelines for successful association boards. Get your board down to fighting weight. It's a myth that you need a big governing body to represent members' interests. Big boards consume huge amounts of resources that could be better spent on member programs. A good rule of thumb is that a board should be able to sit around a large dining room table and operate informally to encourage full discussion of all issues. Another benefit is that you won't need an executive committee with such a compact board. Keep your eye on the big picture. The board is the only body that is charged with creating the future for the association and its members. Virtually everything else can be delegated; strategic thinking cannot. Most of the board's time should be spent considering future opportunities and threats and what to do about them, developing a strategic plan and monitoring whether staff is meeting the objectives set for them. Adhere to the NIFO principle, nose in, fingers out. Don't let your new president hijack the association. It is customary at many association to let the new president set the agenda for his or her administration. This is often different from the previous year, requiring the staff to scrap what has been started and begin anew. The association should be governed by its strategic plan, not the president's desire to build a personal monument. Keep infusing your board with fresh new blood. Rotate a third of your board off each year. This means that a third of your board will have served at least three years and will serve as its institutional memory. A third will have served two years and a third will provide fresh perspective. Limit the number of consecutive terms to two. Work out a partnership between board and staff. Staff should advise the board during the strategy development process and the staff should be responsible for devising and implementing tactics to reach the board's strategic goals. An association is in for trouble when it is either staff-driven or board-driven. Partnership is essential. Manage by exception. If the board has a true strategic plan, you can eliminate the typical voluminous written reports that take up so much of a board's precious time. Exception reports only point out what has not been accomplished, not what has. Develop a clear set of governance policies. These policies should set out a broad framework for both the board and the executive. Instead of spelling out precisely what the executive is allowed to do, it spells out what he or she cannot do without board approval. This provides a high degree of flexibility, maintains the proper degree of board oversight, and frees the board from time-consuming discussions of administrative trivia. Evaluate the executive annually according to written criteria. Compensation of the executive should be directly tied to the achievement of the board's specific strategic goals. Assess the performance of the board and of individual board members. Each year the board should turn the spotlight on itself. An impartial outside group should tally the results. Appoint outside watchdogs. The nominating committee and the audit committee should be composed of persons of impeccable reputation who are not board members. This will help keep board members from perpetuating themselves and their cronies in office, and will help to surface misfeasance and malfeasance in the association's operations.

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