NCMA Governance:

Are We An Exceptional Board?Are We An Exceptional Board?

Governance Committee Report(As Of September 27, 2006)

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ObjectiveObjective

• Begin a dialog to determine if we are properly structured to – – Pursue the Association’s Strategic Objectives– Perform in a competency based manner

• Reach consensus that change is needed

• Set foundation for a vote in December

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NCMA National Board Structure

Overview• Characteristics of Exceptional Boards

• Obstacles of Current Board Structure

• Association Benchmarking

• Proposed Way-Ahead

• Potential Issues & Resolution

• Recommendation

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Characteristics of Exceptional Boards *

1. Govern in constructive partnership with the Executive Director

2. Shape and uphold the mission, articulate a compelling vision and ensure congruence between decisions and core values

3. Allocate most of their time to strategic thinking to hone the organization’s direction

4. Institutionalize a culture of inquiry, mutual respect, and constructive debate and sound decision making

5. Put the interests of the organization above all else and act in an independent-minded manner

6. Adopt an ethos of transparency to ensure stakeholders have access to appropriate and accurate information

* Source BoardSource “Twelve Principles of Governance That Power Exceptional Boards” 2005

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Characteristics of Exceptional Boards * (Continued)

7. Promote strong ethical values and disciplined compliance through appropriate mechanisms for active oversight

8. Ensure sustaining resources exist to link bold visions and plans to financial support

9. Measure the organization’s advancement toward mission objectives – Results oriented

10. Fulfill essential governance duties by structuring themselves to support organizational priorities

11. Embrace continuous learning by evaluating their own performance and assessing the value they add to the organization

12. Energize themselves through planned turnover, thoughtful recruitment and inclusiveness

* Source BoardSource “Twelve Principles of Governance That Power Exceptional Boards” 2005

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Characteristics Most Relevant to Board Structure and Election Process

Exceptional Boards – • #3 – Use strategic thinking to hone organizational direction• #5 – Put interests of the organization above all else• #9 – Maintain a strong focus on organizational

advancement toward mission objectives• #10 – Structure themselves to support organizational

priorities• #12 – Energizing themselves through planned turnover

and thoughtful recruitment

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NCMA National Board Structure

Overview• Characteristics of Exceptional Boards• Obstacles of Current Board Structure• Association Benchmarking• Proposed Way-Ahead• Potential Issues & Resolution• Recommendation

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CURRENT STRUCTURE

• 14 DIRECTORS FROM REGIONS– Elected by Chapter Presidents within a region

• 4 AT-LARGE DIRECTORS– Elected by Board of Directors

• 3 OFFICERS (President-elect, Secretary, Treasurer)– Elected by Chapter Presidents

• President and Past President• 2 Ex Officio – Executive Director & General Counsel

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Specific Obstacles• Selection process for 23 voting Directors limits Board’s ability

to ensure it is structured to achieve strategic objectives– 14 Directors elected within regions (7 each year)

• Nomination process implementation is uneven among the regions

• Focused on finding willing and able participants

• Chapter Presidents within each region have limited selection options

– 5 Officers elected nationally by all Chapter Presidents (3 each year)• Nomination process allows any interested member to run with the support

of a member of the Board of Directors

• Out of step with comparable organizations (NIGP, PMI, and ISM Boards all select their Officers)

• Doesn’t allow Board to select leadership focused on strategic objectives

– 4 Directors elected “at large” by the Board (2 each year)• Only ability Board has to select Directors like an “Exceptional Board”

– Limited Board continuity – potential for 52% turnover each year (12/23)

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Does NCMA’s leadership reflect and serve the objectives of the Association?

• The strategic objectives define needs that would be best served with various competencies and areas of expertise.

• Board members should be chosen to enable the Board to advance the Association’s strategic objectives.

• The only avenue to deliberately achieving that goal at present is in the nomination and election of At-Large Directors.

• We should expand that to a conscious evaluation of board strengths and weaknesses and work to address specific needs.

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Matching Strategic Objectives to Board Members Qualifications – Some Examples

• Public Policy • State & Local Gov.• Commercial Contracting• DoD Policy • Certification Experience• Faculty Member or Student• Executive Level Person• Line Contracting Officer• Specific Functional Expertise• Deployment Expertise

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NCMA National Board Structure

Overview• Characteristics of Exceptional Boards• Obstacles of Current Board Structure• Association Benchmarking• Proposed Way-Ahead• Potential Issues & Resolution• Recommendation

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OTHER MODELS

NIGP PMI ISM

Board Size 15 – 13 from regions and 2

at-large

May have 12-18; currently have 15

at-large 15

Nominated By

Nominating Committee. Voters may nominate by petition (requires 10% of voters in region or 5% for at-large)

By petition (1% of eligible voting membership) or Nominating Committee. Must make reasonable efforts for geographic diversity.

Nominating Committee – no others authorized

Elected By

Agency Representatives

and Chapter Presidents

Eligible voting membership

Members at

annual meeting

Officers Chosen By

Board Board Board

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QUALIFICATIONS

• PMI requires that candidates meet certain criteria, including proven PMI leadership performance; proven business and project management experience; proven experience in strategic thinking; experience in areas which can bring added value to the PMI Board (senior management/executive experience; membership in other similar organizations; international, multi-national or global enterprise experience).

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QUALIFICATIONS

• ISM requires at least 7 of 15 directors be members. Majority are Senior Vice presidents, CEOs, or Chief Procurement Officers.

• NIGP requires that candidates be in the public sector; officers must hold a CPPO. Questionnaire for potential candidates includes experience, certification, education/professional development, contributions to the profession and NIGP, contributions to society, and an essay.

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NCMA National Board Structure

Overview• Characteristics of Exceptional Boards• Obstacles of Current Board Structure• Association Benchmarking• Proposed Way-Ahead• Potential Issues & Resolution• Recommendation

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BASIS FOR CHANGE• Limited ability to recruit candidates based on talents

related to strategic objectives• Some regions have had no viable candidates• Other regions have multiple candidates, but only one

can be elected• Need increased ability to recruit candidates based on

competencies, not just geography• Ensure effective Board balance between chapter

level experience and executive level experience• Enhance ability of chapter presidents to participate in

nation-wide election of Directors• Ensure Board has better knowledge base for

selection of officers• Decrease Board turnover rate for more stability

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PROPOSED NEW STRUCTURE• Chapter Presidents elect 8 Directors in an Association-Wide

process– 2 to 3 Directors each year

• Board elects 5 Association officers and 10 other Directors– N&E Committee will build slate based upon Board approved Charter– 3 to 4 Directors each year– 3 Officers each year

• Directors serve 3 year terms to reduce turn over– May serve one additional consecutive term.– Voting member turnover reduced to 9 of 23 annually (<40%)– Director to Officer transition may reduce turnover further

• Retain three step Presidential progression • Treasurer and Secretary serve one year terms

– May serve one additional consecutive term.• 2 EX-Officio Directors remain as is

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TRANSITION

Under Construction:

• Transition cannot be worked until we have consensus on a construct

• Need a plan before December Vote

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NCMA National Board Structure

Overview• Characteristics of Exceptional Boards• Obstacles of Current Board Structure• Association Benchmarking• Proposed Way-Ahead• Potential Issues & Resolution• Recommendation

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CHAPTER CONNECTIVITY• Issue: Does this change reduce Chapter connectivity?• Mitigation –

– No change from current structure – Directors do not and will not have regional “management” responsibilities

– Communication is universal in today’s environment. – Each member, each chapter officer, each committee member

has the same opportunities to avail themselves of the organization’s activities and information via the website, blast emails, flyers, leadership conferences, etc.

– Geographic diversity will still be a factor in Board composition– Chapter Development Committee is continuing to work on ways

to foster Chapter President interaction and influence– Introduction of “chapter mentor” program gives chapters access

to mentors to guide and assist them in areas such as programs, chapter volunteers, leadership, succession planning.

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CHANGE RESISTANCE • Issue: How do we explain this Governance change to the

Chapters ?• Mitigation –

– Review BoardSource Twelve Principles of Governance• Charts 4 to 6 provide characteristics of Exceptional Boards

– Our current approach has brought many excellent people to Board• But only randomly addressed strategic objectives

– No pressure to find viable candidates in each region each year– Consideration of multiple candidates from any region each year– Allows Association leadership (Presidents and Board) to ensure the

Board is aligned to strategic objectives– Allows Board to select Association Officers like Benchmarked

Associations

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BOARD TOO EXCLUSIVE

• Issue: Is the Board trying to limit diversity and create an exclusive club?

• Mitigation – – Reverse of question is THE goal. – Want to address diversity using a broader spectrum of

considerations– Changes focused on advancing Association objectives– Chapter Presidents have broader choices in National

election

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Others??

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Recommendation

• President direct Governance Committee to prepare By-Law change and transition plan to accomplish proposed changes that reflect today’s dialog

• Board participate in November special telecon meeting to discuss further

• Board vote in December– By-Law change– Nomination & Election Policy revision