Leadership Workshop Series
Nonprofit Board Leadership
March 1, 2001
Moderator
Bill Meehan
Stanford Business School Lecturer, Strategic Management in Nonprofits
Panelists
Peter Hero, President, Community Foundation Silicon Valley
John Morgridge, Chairman of the Board, Cisco Systems
Sally Osberg, Executive Director, Skoll Community Fund
On March 1, 2001 the Stanford Business School's Alumni Consulting Team, Board Fellows, and Public Management Program sponsored a workshop on Board Leadership. This was the second in a series of workshops aimed at improving leadership in social purpose organizations. GSB alumni, students, and community members interested in nonprofit board leadership were among those who attended the March workshop. To facilitate a dialogue concerning issues involved in board leadership and ways to maximize the benefits to the board members and the nonprofits, thought-leaders with a diverse range of experience in the private and nonprofit sectors were assembled. These notes attempt to capture the range of ideas that were shared at the workshop. By highlighting the important takeaways from the discussion, we hope to disseminate knowledge and build a platform for an ongoing dialogue about these issues.
Welcome Remarks
Bill Meehan briefly welcomed the participants to the Workshop. Meehan
noted that we are at a seminal moment in nonprofit and philanthropy- second
American revolution in the field. Analogous to one hundred years ago when
industry titans built an architecture for philanthropy, we are in the
first of several decades of building a new structure. That new structure
has yet to be developed, but Silicon Valley is at the epicenter of nonprofit
change. Today's leaders need to know about board governance from all angles:
- Directing the staff of the nonprofit
- Investing in the nonprofit, as in individual or a foundation program manager
- Serving on the board
Panel Discussions
Each panelist discussed his or her background and experience in the nonprofit
sector and shared some ideas on how to create an effective board.
Bill Meehan, Stanford Business School Lecturer and West Coast Chairman,
McKinsey & Company
Bill Meehan is a member of the board of governors of the San Francisco
Symphony, the board of directors for the United Way of the Bay Area, the
board of Philanthropic Research Incorporated, the California Roundtable,
and the Committee on JOBS. From his vantage point serving on many boards
and consulting to nonprofits, Meehan articulated the following attributes
of truly effective nonprofit boards.
Nine Attributes of Effective Boards
- The organization has an ambitious and clearly stated mission statement.
- Intermediate goals are tied to the mission and are measurable.
- Roles and responsibilities are explicit and well understood. Possibilities
include:
A pure development role.
Representation of the organization.
Evaluation of the executive director and the staff.
Representation of other constituencies. - The board has clear structure and composition (e.g., size, term expectations).
- A small group of committed and cohesive leaders; 4-5 people for whom the board is their single major non-work avocation.
- Enough board members to supply needed skills.
The right combination of work, wealth, and wisdom.
A limit of 10-15% of directors who do not contribute in any important way. - Well-defined tasks for handling key actions.
- Strong governance processes which insure:
A process for interaction on important issues.
Board members time is well spent. They will stop attending if time is being wasted.
Members interact and are brought into contact with one another. - Good boards engage members in the substance of the organization (e.g., music at the Symphony board).
Peter Hero, President, Community Foundation Silicon Valley
As president of The Community Foundation Silicon Valley Peter Hero currently
oversees assets of $600 million and grants of approximately $1 million
per week. In addition, Hero has served as the president of the Maine College
of Art, was appointed to the National Council on the Arts in 1991, and
has served as a board member for a wide range of nonprofits. Using his
many perspectives, Hero suggests there are four tactical areas with which
effective boards need to be concerned.
4 Tactical Areas of Concern to Nonprofit Boards
- Communications:
Inform Directors in a manner that allows them to be constant advocates for the organization.
Have board members talk in first ten minutes of any board meeting; you may lose their attention otherwise.
Evaluate the effectiveness of the meeting with an executive board.
Structure meetings around a particular topic.
Do not have a board meeting unless you can come up with a compelling reason. - Team Building:
Need to motivate and train board members to interact with other board members or else the board becomes a team that "plays, but never practices." - Structure:
Examine the efficacy of so many committees.
Use short-term task forces for better results.
Be flexible and responsive to needs of the organization.
Change the style of board meetings from time to time and always tie the board activities to strategy. - Leadership:
A tight connection between the chair and the executive director is of paramount importance.
John Morgridge, Chairman of the Board, Cisco Systems
John Morgridge served as president and CEO of Cisco, where he grew the
company from $5 million in sales to $1 billion. In addition, he serves
as a director of numerous nonprofit organizations including the Morgridge
Family Foundation, Interplast, Inc., The American Leadership Forum for
Silicon Valley, and The Nature Conservancy. Based on these experiences,
Morgridge sees the following as being absolutely essential to an effective
board.
Essentials for an Effective Board
- Nonprofits should not push so much paper at people. Be far more selective.
- Personal involvement is critical.
Be careful to avoid a disconnect between your interest as a board member and the expectation of the nonprofit.
Make sure you have a good understanding of the culture of the group.
Must have a feeling that you can make a contribution. - Board members need to get to know one another to encourage cross-pollination.
- Off sites are important for team building.
- As a board member look for leverage.
What experience combined with rest of your experiences can you use to increase your contribution?
What assets or knowledge can you, as an individual, utilize in combination with other board member's abilities or the organizations capabilities to make a stronger board?
Sally Osberg, Executive Director, Skoll Community Fund
Before assuming the helm of the Skoll Community Fund, Sally Osberg was
the executive director of the Children's Discovery Museum of San Jose,
widely regarded as a national leader in the museum field and in the area
of informal learning. Osberg has also served as president of the Association
of Youth Museums and as a director on the board of the American Association
of Museums, the American Leadership Forum, and many other nonprofit organizations.
Osberg reviewed her lessons learned during a career spent as both a nonprofit
leader and a board member.
Lessons Learned
- Directors must understand the organization and know the business.
- Quality and accountability of the board sets the tone for the entire organization.
- Good people attract good people.
- Airplane Rule: If you were sitting next to the director on the airplane, a good director would talk to you about the organization There is no such thing as a "pure development board."
- Fundraising must follow from some sense of purpose and commitment to the organization.
- A close working relationship between the chair and the executive director is essential.
- Boards need diversity in all areas for richness of debate and the courage to ask tough questions.
- A good structure and system (e.g., strong communications, and strong board relationships) is important to free the board to do important work.
- Entrepreneurs can add a special dimension; they will push the organization.
- Use task forces to pull in people from other organizations.
Discussion
The last 45 minutes were dedicated to answering audience questions. Following
are some highlights from the ensuing discussion.
Board Diversity
- Boards need to attract people with strong and different opinions (e.g., risk-takers and risk-adverse people).
- Bay Area boards are not diverse enough. Hispanics and Asians are underrepresented
- Do not get people who just focus on "return on investment." The things that are easiest to measure may be the least important.
Paperwork Issues: Keeping the board Informed Without Overloading
- Take examples from the business world:
Items stated more crisply.
Text not only form of delivery. - Layer importance of communications (e.g., IF YOU READ NOTHING ELSE, READ THIS).
- Send out update every two weeks, but only touch on points that are mission critical.
- Communicate with the nonprofit. As the board member, what works for you?
Board Tenure: Balancing Continuity and Fresh Ideas
- Use an advisory board to try out prospective members or as a "boneyard" for old members.
- Term limits: Limits are not per se necessary, but term expectations are good. Boards need to have a review process after the term has expired.
- Expectations are important. Make it clear that directorship is not a lifetime appointment. Some flow is needed.
- Use a chair-elect so that the executive director can begin developing a productive relationship with the next chair.
Board Focus: Day-to-Day Operations vs. Long-Term Vision
- Time spent on issues must be based on priorities according to the strategic plan. Sometimes immediate operations will be the priority.
- If access to capital is hindering the operations, then that becomes the key issue.
- If nonprofits defined themselves as "public benefit corporations," fundraising might be easier.
- Board "meddling" is not always bad.
Most board members are there for the right reasons, and "meddling" shows interest and engagement.
Some are on board for the wrong reasons and can seriously hamper staff. Such directors need to be removed by letter, or more preferably, in person.
Executive Director as Board Member
- Arguments For:
Have knowledge of operations and can make a contribution.
It does work for many organizations. - Argument Against:
The board needs an opportunity to share ideas without the presence of the executive director, who can meet with board separately.
Joining a Nonprofit Board (Especially for Recent MBA's)
- Find a nonprofit in which you are interested and start showing up at board meetings.
- Be deliberate and careful to make sure that your expectations are in line with the nonprofit. Take a "dating service" approach.
- Understand that the fiduciary aspect of being a director is a serious responsibility.
Making the Most of your Board
- Give recognition for time and energy.
- Leverage the network of the directors and draw upon all of their talent to create an "ecosystem."
- Look for ways for nonprofits boards to work together with other nonprofits. Nonprofits are not always competing with each other over limited resources and can work together to create a "bigger pie."
- Avoid a bottom-line only mentality. The U.S. nonprofit sector is widely admired because it allows for civic engagement to address social problems in ways that profit-driven companies cannot.
Grants
- It is not practical to have the board involved in actual grant writing.
- It is the board's responsibility to insure that the organizations does not recast its mission to meet grant requirements.
Nonprofit Leadership Development
- Sloan Program at Stanford is accepting small numbers from nonprofits.
- Interest in leadership development is high, now it is a matter of executing on that interest.
Finding the Right People for Your Board
- Use the connections that you already have and extend the networks.
- Set goals and targets and go after them.
- Get one good member who can bring in others.
Contribution Requirements
- All board members should contribute to the organization.
- It is a delicate issue but the organization must be up front and straightforward about the expectations.
- The best boards do not have a single number for a minimum contribution.
Board and Staff Relationship
- The board and staff are brought together by clear goals and real work.
- Trust and human interaction between the board and staff is important to build the social capital of the organization.
