Ever wonder what it really takes to be a nonprofit board member? It's definitely more than just showing up for meetings. As a nonprofit management consultant, I've noticed something over the years: many board members don't get a proper orientation about their actual roles and responsibilities. So, let's dive into the three most important jobs you have as a board member.
If you'd rather watch than read, you can see my full video on the top responsibilities of a board member here:
Responsibility #1: The Board as the CEO's Boss
First and foremost, remember that you're the CEO's boss. This means you have a big role in:
recruiting
hiring
managing
reviewing
retaining
compensating
potentially firing
Think of it like a school board hiring a superintendent or a city council hiring a city manager. It's a huge decision! But keep in mind: your job is to manage the CEO, not the other employees. The CEO handles everyone else.
Nuances of Overseeing a Founder-CEO
Now, things get a little trickier if the founder is still around. Maybe you're the founder's boss. This requires some finesse. But for established nonprofits where the founder isn't running things anymore, you're in charge of the CEO.
The Importance of Regular CEO Reviews
Here's a problem I see all the time: nonprofit boards don't review the CEO every year. Some CEOs don't even have a job description! So, when you join a board, ask to see the CEO's job description. If there isn't one, offer to help create one. Don't worry, it's easier than it sounds! AI can help, and so can we at Schmucker Advising Group. The CEO can also help edit it to make sure it is what they are actually doing. The board needs to approve the job description and make sure it is what they want the CEO to do.
Key Elements of CEO Performance Reviews
Make sure your CEO has goals every year. Then, review their ability to meet those goals. Ask yourselves these questions:
Are they meeting their goals?
Are they fulfilling their job description?
How are they contributing to the strategic plan?
Are they being compensated fairly compared to similar organizations in your community?
Do they deserve a raise or bonus?
What about benefits?
These are critical decisions for the board.
The Consequences of Neglecting CEO Oversight
If you don't give regular reviews or fair compensation, guess what? Your CEO might leave. Just like you would if you weren't getting feedback or competitive pay. Then it becomes the board's problem! Your most important job is to get the best CEO you can and keep them happy.
Responsibility #2: Financial Resource Oversight
Ready to talk numbers? Whether you're a financial whiz or not, you need to pay attention to the money. You'll review and approve the budget every year.
Monitoring Financial Performance
It's not just about the budget itself. You need to track "budget to actual" performance. This means comparing what you planned to spend and earn with what actually happened.
Analyzing Revenue and Expenses
How is revenue doing compared to the budget? What about expenses? How is the CEO managing these decisions?
Supporting the CEO in Financial Management
Where can you help the CEO make better financial decisions? Can you help bring in more revenue or control expenses? This is where the board can add real value.
Responsibility #3: Setting Strategic Direction
This is my favorite part! It's all about the future of the organization.
The Board's Role in Strategic Planning
You might be involved in creating the strategic plan, or you might just approve it. Either way, you're guiding the organization forward. What's the strategic plan? Are you fulfilling the mission?
Affirming Vision and Mission
Review and affirm the organization's vision and mission statements every year. Make sure everyone is on the same page.
Alignment with Strategy
All your decisions should align with the strategic plan. This keeps you focused and moving in the right direction. Ensure the organization is fulfilling its mission by reviewing and approving the strategic plan annually.
So, there you have it: the three most important jobs for a nonprofit board. Take care of the CEO, watch the resources (especially the money), and set the strategy for the future.
Want to learn more about nonprofit board governance?
Follow @SchmuckerAdvising on LinkedIn, Facebook, and Instagram and visit Schmuckeradvisinggroup.com for more resources.
Comments