“The speed of decision making is the essence of good governance.“ ~ Piyush Goyal
Governance. It is a fundamental component of a strong and successful organization. Good governance facilitates decision-making, and without this nothing moves forward.
Governance is often perceived as being complicated – as it sometimes involves legal counsel. This may be required, but not if you are just starting to set up a governance process, or if an existing process requires a simple reboot.
Your board of directors must understand their leadership role and the power they have within your organization. It is crucial to have the correct framework set up to steer the board in the right direction. Without good governance, organizations will find themselves in a position whereby they can no longer function effectively or make decisions in the best interest of their organization.
Have you defined what type of board you have? It is a working, managing, governing, ratifying or disengaged board?
A governing board sets the initial direction and has full authority to act in the organization’s best interest. Governing boards function at arm’s length from the operation organization. They focus on the big picture and are future-oriented.
Working boards lead the organization but also do double duty as volunteer staff. These are common in small and community based organizations that don’t have the resources to hire employees. It’s easy for these boards to lose sight of their governance duties when they are caught up in the day-to-day, rolling out programming or services.
Advisory boards serve to provide insight and perspective to any decision maker including boards. An advisory board typically does not have authority of its own but works to educate a person or group.
Fundraising boards are most often a subcommittee of the main board whose sole purpose is to use its members’ connections and influence to raise money for the organization.
Donors, now more than ever, expect accountability. It is important to take time out annually to have a discussion around goals, review your checklist, perform a self-assessment and set an action plan for the coming year.
Philanthropic organizations in general have strived for better governance over the past decade, therefore it is critical for all others to follow suit. Schedule time to begin the discussion if you have not already done so.
Below is a spring cleaning governance checklist to help get your organization on the right track:
- When was the last time you reviewed your mission statement? Is it still current and allied with your organizational vision?
- Are your by-laws up to date, do you have board terms, termination clauses etc.?
- Has your board, staff, and volunteers all signed a non-disclosure and/or confidentiality agreement?
- Do you have a process to invite new board members to your organization? Do current stakeholders understand this process?
- Does your board reflect diversity and include key stakeholders?
- Does your organization have a succession plan in place for the board and the leadership of the organization?
- Do you organize a board and/or leadership retreat? If so how often?
- Do you have Director and Officer liability insurance in place?
- How do you know how well you are doing? Are annual survey and/or evaluations performed with all your stakeholders?
- How do you ensure that you are following your processes and integrating any feedback being offered to the organization?
- Have you determined your expectations and outlined roles for volunteers? Do you have job descriptions for your staff?
- How do you ensure that there is no conflict of interest amongst team or board members?
- Do you have a code of conduct in place?
- Do you have a crisis management plan in place?
- Do you review your policies annually, review your signing authorities, access your risk management?
The above features only a snapshot of an extensive list of items.
At Phil we understand the importance of good governance and we are here to guide you and your board through a workout, a reboot or even a start-up.