How nonprofits can keep strategy front and center
As a consultant to nonprofits, I often hear board members complain, “We almost never have time at board meetings to talk about strategy. We’re too busy with board of directors!”
This, of course, begs the question: what kind of board activity requires more focused attention than strategy?
Honestly, none. But in the nonprofit world, many boards never discuss strategic issues because tradition dictates a certain unproductive, uninviting pace and pattern for board meetings. In the name of fiduciary responsibility, boards fill their agendas with operational details and reports on routine activities, and board meetings become exercises in boredom and futility.
The standard meeting opens with the approval of the minutes. Then there is a long discussion about this month’s finances. Then each committee reports. It goes on and on, then it’s time to leave, and the meeting ends – until a few weeks later, when another meeting unfolds in an equally uninviting way.
The strategy of many nonprofit boards is something to think about every three years or so. As time passes, they engage a consultant to facilitate an in-depth planning process, which involves full-day or half-day retreats; they develop a set of goals that they hope will guide the work of the organization over the next few years; then they put that plan aside until the next strategic planning process, in several years – except when they have to dust it off in the meantime to send it to funders as part of the grant application process.
This is not how things should work. Boards need to keep strategy front and center in everything they do. But it requires rethinking how organizations craft their board agendas, which can be more disruptive than you think. Yet there are effective ways to do it.
Strategy, at every meeting
I suggest that at least half of every board meeting be devoted to strategic discussions. It’s not easy when you already have a regular agenda full of non-strategic issues to discuss. But it is possible to free up this time by eliminating operational subjects or more effectively dealt with outside the plenary meetings of the board of directors.
The area that typically occupies the most time in meetings is the fiduciary responsibility of the board. This is obviously of paramount importance, as the board needs to know that the organization’s funds are being used legally and ethically to further its mission. The board must confirm that the organization properly invests and accounts for its financial assets, treats staff, customers, and suppliers fairly, pays its payroll taxes, completes all appropriate forms with the IRS, and is honest with its donors on the use of their contributions. But here’s the thing: if you have a good treasurer and a finance committee on top, most issues regarding fiduciary responsibility can be considered and resolved outside of full board meetings.
Boards also need to take CEO oversight seriously. This is arguably the important job of a board of directors – to hire, support, monitor, evaluate and, if necessary, replace the CEO. But none of this should routinely take up a lot of time in meetings. Instead, boards should make CEO evaluation an intensive, once-a-year process.
Boards also play an important role in fundraising, and many spend a lot of time discussing the subject. As a fundraising consultant, I can attest to its importance, but I can also assure you that it doesn’t need to be discussed as much as people think. A commitment to fundraising must be widely assumed, and the best time to make plans and carry out development work is primarily Between plenary meetings of the board of directors.
To sum up: Boards should perform their fiduciary responsibility, CEO oversight, and fundraising duties, but they can do so without consuming huge chunks of board meeting time. administration. And with all that extra time, they can better direct their attention to strategy.
A more strategic agenda
Here’s how a two-hour strategy-focused board meeting might go:
The board of directors can open the meeting with a speaking time of 10 minutes missionary moment, during which a staff member, board member or client tells a story of the organization at work, something to remind everyone why they are there. Then the board approves the consent agenda, which includes the minutes, the financial report and any committee reports that do not require discussion. Boards approve these routine agenda items by consent in a single vote, although they have the right to remove particular agenda items by consent for further consideration.
At this point, about 20 minutes into the meeting, it’s time to spend an hour discussing a strategic issue.
What outcome? Boards should look to their strategic plan, which is the one they don’t want to leave out. Let’s say the plan has five strategic goals. Let’s also say that the council meets six times a year. Assign one of these goals to each of the first five meetings of the year. In January, it’s Goal One. In March, it’s Goal Two. Etc. Prior to each meeting, staff should prepare a brief report on progress and challenges in this goal area, highlighting what is working and what is not. There should be some framing questions at the end for the board: options for moving forward or open-ended questions about challenges that have arisen. The discussion should be honest, collaborative and strategic. These can and should be dynamic and engaging conversations, designed to elicit real board input.
At the end of this hour’s strategy discussion, I recommend devoting 20 minutes to a Q&A with the CEO, developing a bulleted CEO report that would have been included in the board brief. After that, the board chair can do a quick evaluation of the meeting – what worked and what could have gone better – and close the main section of the meeting with a few inspiring words.
Finally, each meeting should include an executive session as a standing agenda item. This is an opportunity for board members to discuss issues without the presence of the CEO or other staff. This session doesn’t need to be used every time, but having the executive session as a standing item for every meeting saves CEOs from worrying about getting in trouble when an executive session suddenly pops up at the agenda.
So basically here’s the plan: At the start of the meeting, 20 minutes for a welcome, mission story, and adoption of the consent agenda. At the end of the meeting, approximately 40 minutes for a conversation with the CEO, an evaluation of the meeting, closing comments and an ongoing executive session. And in the meantime, at the heart of the meeting, 60 minutes for an in-depth discussion on one of the major strategic objectives that the organization has set itself. That’s half the meeting time devoted to strategy.
This model leaves organizations with a sixth meeting, at the end of the year, where the board can approve the next year’s budget – itself a strategic conversation, because nothing speaks more to an organization’s priorities than how she spends her money. And during this sixth meeting, the board can also finalize the annual evaluation of the CEO.
A few caveats:
• It only works whether there are active committees that consider issues between board meetings. The finance committee, more importantly, should study the numbers thoroughly so that the rest of the board can feel comfortable approving the financial report as part of the consent agenda.
• It only works if there is a chairman of the board who controls the meeting and prevents the conversation from drifting into details. If a board member removes the financial report from the consent agenda for discussion, for example, that is the right of the board member, but the chair should respond: “Please let us know the area(s) on which you have questions, and we get those answers. This is not an opportunity for a sprawling conversation about every line item.
• It only works if the board does its homework and reads the documents (including and especially the consent agenda) before the meeting.
• And it only works whether the board chair and CEO take the agenda creation process seriously, and whether staff provide transparent and engaging reports on the strategic issues discussed.
I recognize that not everything is as simple in practice as in theory. And, yes, I know that unforeseen and critically important issues will arise that will require immediate action from the Board of Directors, and that these issues will alter the small meeting agenda that I have established. But if organizations use this program as a model, they’ll be off to a good start by keeping the board focused on strategic issues, which means they’ll do a better job of actually looking after business.