Strategic leadership is a key responsibility for any board of directors, but in charities and other non-profits it can often be quite a weakness, unfortunately. A key issue is that at very many charities trustees often have limited knowledge of governance and strategy and typically they (who are usually unpaid volunteers, of course) only meet together infrequently for just a few hours each time.
Nor does it help that charity boards usually do not include any of a charity’s (employed) senior executives, so board members have less direct awareness of what’s happening in a charity and have to rely greatly on the charity’s CEO. A situation of two parallel leadership ‘teams’ emerges – the employed executive team and the trustee board: this creates a gulf and slows overall leadership, only partly alleviated by many charity boards asking senior staff to sit in at board meetings (which then become crowded and more cumbersome).
So, what are some of the other, noteable problems that can hold back a non-profit’s strategic leadership effectiveness and what are some appropriate measures trustee boards can take? Here are nine factors based on my own experience as a board trustee, CEO and consultant-facilitator with quite a range of non-profits/charities over recent years:
i) Failure to see strategy as the board’s primary governance responsibility: Sometimes charity boards assume that it’s the job of their CEO and employed managers to look after strategy. Actually, while a board should rightly expect executive staff to be strategic in their thinking, it is the board that has legal liability and duty for overall leadership and so can’t abdicate this. The right approach is for board members and senior staff to work together collaboratively to review/discuss/shape overall strategy, let the exec team develop and propose more detailed options and proposals, then the board settles what is to happen, and from there monitors/oversees ongoing implementation by the staff. Critically, at the end of the day, it is the board’s role to decide what are to be the organisation’s goals and initiatives and to challenge executives to re-work proposals it considers inadequate.
ii) Not having the right composition of people on the board: Like for any leadership team, a non-profit board needs to have the right balance and diversity of people to form it. Most directors/trustees should have a decent level of knowledge of or affinity with the sector/profession in which the organisation is operating, but it is wise also to have a few directors who have broader, external knowledge/experience, so that the board as a whole has a rounder perspective and avoids becoming insular in its thinking (this can be a big problem, for example, with membership bodies). It is often a good idea for one or two board members to be representatives of key stakeholder groups – for example, a disability charity’s board should certainly include one or two individuals who have the disability in question or close affinity/experience dealing with it in their family. Crucially, at the same time, though, there should be an appropriate mix of people in terms of demographics – particularly gender and age – and relevant professional and cognitive skills.
iii) Board meetings that focus on too much micro-management: Boards must leave the daily management of the organisation to their CEO/executive director and avoid any tendency to micro-manage. Instead, beyond ensuring that managers are running things dilligently, board members must focus on ‘bigger picture’ issues. This doesn’t mean the board dealing with strategic things only at a once-a-year strategic ‘away-day’, but rather making sure, as far as possible, that every board meeting includes some consideration of a small number of selected/topical strategic issues. Examples of some good practices to consider: in board meeting agendas prioritise/lead with strategic or big topics needing a full discussion or a difficult decision to be made; time-plan all items on the agenda with target limits for each topic, which the chair should enforce; avoid executives giving every board paper/report an oral summary at the start of the agenda item; and regard each board paper as automatically approved unless, by exception, a board member raises a specific question or concern about it.
iv) The board lacking a concise performance reporting/scorecard system: Some non-profit CEOs forget that their board members are usually busy people themselves and may have difficulty finding time to read a lot of material in between board meetings. So, it’s important, of course, that information sent to board members is focused on key issues, concise and well summarised, as well as timely and clear. In particular, performance reporting to board members should focus on overviewing a limited but balanced set of ‘key performance indicators’, together with short updates on key projects/initiatives set out in the organisation’s strategic/business plan. Without such a summary ‘scorecard’ (dashboard), board members will find it harder to monitor and lead the organisation strategically.
v) Poor team spirit or deficient team leadership by the chair: Despite meeting infrequently, a board needs to feel and work as a team as much as possible to help it fulfil its leadership role. Like for any group, team spirit and cohesiveness are fostered by a variety of measures, including: spending adequate time together informally to get to know each other personally; developing and committing to an organisational vision together; developing respect and trust for each other; being able to accept and handle differences of opinion between each other; treating everyone equally and fairly; and avoiding letting individuals’ personal egos or narrow-thinking get in the way of what is right for the organisation. Of course, a board’s chair has a major responsibiulity for ensuring such measures, but recruiting the right person to do this role can be a major challenge for a non-profit/charity – especially finding a leader who is able and willing to make the extra time commitment needed, usually with no payment being provided in return.
vi) Too much hanging on to the past or avoidance of risk-taking: To respond to today’s pressures and challenges, non-profits need to be ready to be innovative and creative and this means their boards must be willing to take chances, to try new things, and to take risks sometimes. Unfortunately, this does not come easily to many third-sector boards, as it is naturally easier for a mixed group of people to pefer and stick with the status quo. But, of course, sticking with the status quo can sometimes be a greater risk than trying something new! For many charity boards it can be a challenge, for example, thinking/acting commercially or collaborating/merging with other non-profits (for fear, often, of their own charity closing and its trustees losing their position).
vii) Board members not keeping in touch enough with external changes or changing needs of clients/beneficiaries (or other stakeholders): To help the fulfil their strategic role, board members need to keep in touch with and think about ongoing changes in their organisation’s environment. However, without the organisation helping them, board members can easily fail in this area of responsibility. So, examples of helpful measures are: include with regular board papers a news update on the latest external developments; schedule time during board meetings for discussion about selected external news topics; periodically send board members copies of media articles that cover relevant issues/trends; and invite expert individuals from external organisations to speak at a board meeting on a topical issue. Specifically, to help board members keep in tocuh with stakeholders’ views, two obvious measures to help are: arranging for directors to go and visit/meet with key external individuals and holding periodic ‘open/consultation’ forums for directors (online or in person) to meet groups of different people.
viii) Directors not clarifying and promoting enough the organisation’s aspirations, values and direction: Trustees – especially the board chair and vice chair – have a key role in ensuring the organsiation’s driving beliefs, aims and strategies are as clear as possible to all key stakeholders – from staff to service users to external partners, local communities and the media. This vitally includes spending time personally interacting with different people to refer to and discuss the charity’s goals and activities, to help check understanding and help reinforce support. And, at the same time, of course, trustees – like senior employed staff – need to ensure their own personal behaviour and conduct always reflect and support the declared values and standards of the organisation: such things are readily watched/noticed by staff and others! Another important issue – for fresh issues and challenges that come up over time for the organisation – the board chair must actively ensure that the organsiation’s vision and strategy are used as an ongoing ‘reference frame’ to guide and steer appropriate decisions by the executive team.
ix) The board not reviewing or developing itself as a governing body: Like for any team, it is important for a trustee board to monitor and manage its own effectiveness, if it is to fulfil its responsibilities well. Unfortunately, this is a weakness of many charities/non-profits – not least because it can, of course, be uncomfortable for people when they have to look at themselves (or as a group) and consider a ‘dry’ subject like governance! So, some particular practices worth following: ensure all board roles have good descriptions / skill profiles and all board committees have good terms of reference; ensure good induction programmes for all new board members when they start; have all board members each year think about how well the board itself has worked (and also with the CEO/executive team) over the preceding period and then discuss together opportunities for improving effectiveness; and ask board members individually each year to suggest areas where they feel they could use some devlepment support to enhance their own skill or knowledge as trustee. Overall, boards should seek to foster a continuous learning culture for all its members (and the executive team). Use an external facilitator or HR expert possibly to help the review, where useful.
Altogether, ensuring effective strategic leadership for a charity / non-profit is a challenging process, but a very important requirement. I hope the above points, including some suggested measures, are helpful.