How Can Boards Better Measure Up to High Expectations?

June 30, 2011; Source: Chronicle of Philanthropy | Nonprofit boards are underperforming, according to the recently released study, “Daring to Lead 2011: A National Study of Nonprofit Executive Leadership,” sponsored by CompassPoint Nonprofit Services and the Meyer Foundation. That’s the perspective of over 3,000 nonprofit executive directors who participated in the national survey. Results are consistent with findings from two prior “Daring to Lead” studies conducted in 2001 and 2006. Furthermore, similar surveys of nonprofit board members themselves have yielded similar conclusions.

Just 20 percent of responding executive directors indicated high satisfaction with their boards’ overall performance as governing body. Though a majority felt positive about their partnership with the board chair, they rated the board’s overall level of engagement as moderate. For example, 45 percent of executive directors didn’t have a performance review last year: of those who did, two-thirds felt the evaluation wasn’t useful. Respondents gave highest marks to their boards in the area of financial oversight. They gave lowest marks in the area of policy/advocacy engagement.

Is this lackluster assessment a sign that nonprofit Board members are unwilling to commit, unable to perform, or unaware of how to productively participate? Many remedies proposed for underperforming boards focus on better board recruitment, orientation, ongoing training, and use of committees. These may be important, but the deep dissatisfaction suggests a systemic problem as well.

Given all the changes facing nonprofits—including more complex compliance and reporting requirements, market-driven business models, sustained reductions in core funding and demographic shifts– how well do we understand anymore how strong governing boards enhance nonprofit effectiveness? In this turbulent operating environment, how well do we know anymore how best to focus the limited time and energy of a volunteer board?

Buried in the “Daring to Lead” report is a relevant statistic. The report notes, “other studies have found that executives who spend 20% of their time on board-related activity have high rates of satisfaction with board performance.” Among “Daring to Lead” respondents, executives who spend more time on board-related matters are also more satisfied with board performance. Still, the largest group of respondents (39 percent) spends just 5-10 hours a month on board-related activity. That’s roughly 6 percent of their time at most.

If a more robust executive director/board working relationship correlates to better board performance, nonprofits and their funders should view time invested in cultivating this partnership as mission-critical. It’s not time wasted. It’s fundamental for organizational performance and sustainability in a complex world.—Kathi Jaworski