FROM BOARD BOOK TO BOARD PORTAL 2

A SYMPHONY IN G 5

MEASURE RESULTS, NOT ACTIVITIES 7

GOVERNING GREEN: ENABLING THESUSTAINABLE ORGANIZATION 10

LOOKING AT THE BIG PICTURE 16

Insight and Ideas for Nonprofit Governance

Departments

EXECUTIVE’S CORNER 9 !! BOOKMARK 9ASK OUR CONSULTANTS 15 !! A BOARD MEMBER SPEAKS OUT 19

B O A R D M E M B E R®

VOLUME 19 | NUMBER 3 MAY/JUNE 2010

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!! F R O M T H E P R E S I D E N T !!

Last fall, in my article, “TheNew Future of Governance,” Iinvited you to commit to“transformative governance” —to engage in breakthroughthinking that embracesemerging trends anddevelopments and ask, “What does this mean forgovernance?” Since then,BoardSource has been exploring this topic further on our Web site, in the pages

of this publication, and in my new executive blog, always encouraging others to weigh in. The new future is complex and multifaceted, and it is only through wide-ranging dialogue and debate that we’ll be able to envision it.

One of the most important — if not the most important— facets is sustainability. I therefore direct your attentionto this issue’s feature article, “Governing Green,” whichwas written by Peter Soyka, an environmentalmanagement and strategy consultant who is dedicated topromoting sustainable business practices. Soyka believesthat board members are in a position to lead thesustainability charge within the nonprofit sector — andthat it can start within our own organizations. I agree andencourage you to consider implementing Soyka’ssuggested action steps, as BoardSource itself is doing.Some of the most rewarding work we can undertake overthe next few years is guiding our organizations to a moresustainable and effective future.

This is the second digital issue of Board Member.® Whilewe expected some of our members to voice a preferencefor the print version, I’m happy to report that did nothappen. Soyka opens his article by stating, “Nearlyeveryone wants to have a healthy environment, and manyfeel obligated to contribute toward this goal.” When itcomes to our members, he’s obviously right.

Leading theSustainability Charge

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While many nonprofit organizations have embracedadvanced information technology, their boards oftenhave remained the last bastion of old-fashionedcommunications.

Today, that’s changing as more boards adopt “boardportals” to deliver materials to board members andexpedite information flow between the chief executive,staff, and the board and among board membersthemselves.

What is a board portal? It’s a Web-based, onlineworkspace devoted exclusively to the board. It offersboard members confidential access to board materialsand provides tools that make it easier to prepare forboard meetings. Typically, the portal includes securitycontrols that keep board documents and members’communications with each other protected andconfidential. It also includes tools that greatly reducethe time and cost of producing and managing boardmaterials and scheduling board work.

Key featuresA well-designed board portal is easy to use. It’s possibleto navigate intuitively among all features, to print theentire board book with a single click, or to printseparate documents as needed. While each vendoroffers its unique suite of services, key features ofteninclude:

Document access and management. Board membershave access to confidential board materials andcommunications. When traveling, they can downloadmaterials before or during the trip and review them inlocations that don’t have Internet access.

Board books and document controls. Portals typicallyinclude robust tools for creating a board book andcentrally managing organizational documents. Portal administrators can broadcast materials to all boardmembers or to a specific committee or selectedindividuals.

LINDA C. CROMPTONPres ident & CEO, BoardSource

JOIN THE BOARDSOURCE LINKEDIN GROUP www.linkedin.com/groups?gid=131626or follow BoardSource’s Twitter feed www.twitter.com/BoardSource

From Board Bookto Board Portal

LINDA BATTAGLINIPresidentBattaglini ConsultingBurlington, MA

Reliable security. Board membershave user-level defined access toboard and committee materials.Portals use a variety of methods tomaintain strong security, such asmultiple passwords, scramble pad, orkey fob. Support staff have user-levelaccess matched with their scope ofwork, keeping all other materialsconfidential.

Alerts. Support staff can send outalerts about new materials. Someportals take board members directlyto new materials when they log in.

Calendar management and meetingscheduling. Portals show thecomplete board calendar, includingall meetings and events. Some toolslink calendars to materials for eachscheduled meeting.

E-mail and discussion tools.Depending on the portal’s capabilities,e-mails can be kept among boardmembers and stay within the portal,with confidentiality controls. Access islimited to appropriate staff.

Survey and voting tools. Portals ofteninclude survey tools for polling boardmembers and conducting boardassessments. The board chair evencan call for online voting, if permittedby law.

Note-taking. Some tools allow boardmembers to make online notes asthey review the meeting packet and toaccess their notes during meetings,just as they would with a paperdocument.

Reliable support. The portal is ahosted environment, and the vendorprovides software, servers, storage,and backup systems that ensurebusiness continuity. Some vendorsoffer 24/7 support.

Searchable archives. Most portalsprovide unlimited storage for keyorganizational information, such asthe board manual, bylaws, minutes,meeting materials, financial reports,

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electronic voting feature for relativelyminor decisions that can’t wait for thenext board meeting and developedpreliminary annual goals using asecure discussion area within theportal. Each board member identifiedthree top priority goals and thenengaged in significant give and take.“They were able to review andcomment on the previous discussionon their own timeline,” says CindaPerkins, executive assistant to the

dashboards, and strategic plans.Materials can be searched bykeyword, topic, committee, and date.

Portals in useBoard portals are still an innovativeapproach to governance support withbenefits and drawbacks.

Saint Alphonsus Regional MedicalCenter in Idaho started using a portalthree years ago. The board uses an

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then decided to examine a number ofexternal options. Both tech-savvy andtech-phobic board membersparticipated in the search.

In March 2009, the chosen portalwent live. Now, board meetings arepaperless. Inexpensive laptops arecompletely set up in the boardroomwhen board members arrive. Inaddition, board members can accessmaterials before or after meetings ontheir home or work computers.Recently, when a member had troublelogging on at 11:30 p.m., the portal’saccount representative fixed theproblem at 1 a.m. “I thought that wasphenomenal,” says Matthew VanPatton, chief of staff to the board.“They promised us support, andthey’ve kept their word.”

Board portals have gone throughthree generations of development,making them a stable technology.While there often is a transitional

period when board members learnhow to use these new tools, there canbe substantial payoff as they find theycan carry all needed materials on alaptop and participate in secureonline discussions at any convenienttime.

chief executive. “We took a summaryof that discussion to the boardmeeting that set the final goals.”

Shore Memorial Hospital in NewJersey has board members with awide range of computer skills. In2004, they began using a secure in-house board Web site that includesboard packets, minutes, and theboard calendar. However, boardmembers have been reluctant to usethe in-house portal, and the hospitalstill sends out paper packets.

A little more than a year ago,executive staff members came acrossan external product that provides amore convenient way of dispersinginformation to board members. Thehospital is now in the process oftransitioning to this product, with thegoal of going paperless by the end ofthe year. “I believe our boardmembers will have greater comfortwith this portal’s reliability,

confidentiality, and ease of passwordmanagement,” says Pattye Herron,secretary to the board.

Spartanburg Regional, a health systemin South Carolina, also tried an in-house system. Navigating multiplelayers of logins and folders provedonerous to board members, however,and they soon decided that paper waseasier. Wanting speediercommunications betweenmanagement and board members,with more time to review materialsbefore board meetings, the hospital

Adapted from “Using E-Governance toMake Board Work Easier” and “GreatBoards Buyer’s Guide to Board Portals.”Bader and Associates, 2009.www.GreatBoards.org

Editor’s note: BoardSource membersnow receive a discount whenpurchasing portal products fromBoardEffect(www.boardeffect.com/boardsource)

and BOARDnetWORK(http://insurancefornonprofits.org/bnwboardsource.htm)

RESOURCE:

Meeting, and Exceeding Expectations: A Guide toSuccessful Nonprofit Board Meetings, SecondEdition, by Outi Flynn. BoardSource, 2009.

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A Symphony in G

By changing its governance structure,a regional orchestra positioned itselffor a dramatic organizationaltransformation.

In 2006, Florida’s oldest continuingorchestra was known as the FloridaWest Coast Symphony. Theorganization had 58 board members.

Today, that orchestra is known as theSarasota Orchestra. Through astrategic reorganization, the boardnow has 18 board members.

While we obviously have experienceddramatic change in the past four yearsat the Sarasota Orchestra, the story ofour transformation really begins nineyears ago, in 2001 — the year I joinedthe symphony and the year in whichwe committed to recast theorganization for the 21st century.

First Movement: Allegro In 2000, subscription and ticket salesbegan to show subtle declines atFlorida West Coast Symphony —even as the population and personalwealth of Sarasota’s local residentsgrew, and as newspaper reviews andsubscriber surveys praised theorchestra’s performances. Thissituation was just one of many,however, that required theorganization’s attention. So, a fewmonths into my tenure, Irecommended to the board’s executivecommittee that we take a look at theentire organization in terms of whereit was going, what it wanted to be,and whom it wanted to serve. Thatled, in the summer of 2001, to the

start of an exhaustive strategicplanning process that took the betterpart of nine months to complete.

In May 2002, we presented the planto the full board. It was, basically, acapacity-building plan that focused onconverting the Florida West CoastSymphony from a small business andcommunity orchestra model to a mid-size business and regional orchestramodel. In short, we planned toembark on a lifecycle change — achange that would impact every partof the organization, including the sizeand structure of the board itself.

Second Movement: Andante Though it was common in 2002 fororchestras to have large boards thatcanvassed a cross-section of theircommunities and served social as wellas philanthropic purposes, FloridaWest Coast Symphony’s board sizewas unmanageable. Its 58 membersmet six times a year. Its executivecommittee, which comprised 18members, met 10 times a year and

acted as a board within a board. Thesymphony had many board memberswho were disengaged anddisenfranchised and staff memberswho spent much of their time puttingtogether meeting packets and boardreports.

During the summer of 2002, theboard recognized that to achieve theorganization’s next level ofprofessionalism and artistic success, itwas going to have to make somedramatic changes in how it governedthe organization. Fortunately, most ofthe members’ excitement about theoverall strategic plan overshadowedtheir anxiety about the forthcominggovernance changes.

During 2003 and 2004, wecommenced the change by workingon parts of the plan that excited theboard — artistic changes, technologyimprovements, and staffing — whileadvising the board about the benefitsof best governance practices. SandyHughes, a respected consultant whowas affiliated with BoardSource formany years, steered the board intoseeing that change, though difficult,can be exciting. Then, in 2005, with avisionary board chair as its championand Hughes as the guide, the changewas accelerated.

Third Movement: Scherzo, AllegroThe first thing we did as we picked upsteam was roll out, in November2005, the Maestro Society, a givingsociety that features special events forits members. We began to use this

JOSEPH MCKENNAPresident & CEOSarasota Orchestra Sarasota, FL

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Our findings led to a top-to-bottomreinvention of the organization’sbrand, which has included theredesign of programs; the creation of anew multimedia series; the rollout ofnew marketing vehicles, includingdigital media; and finally a namechange. And the board has beenkeenly involved every step of the way— this was, after all, its first majorinitiative as a “new” board. The newstructure and size enabled the boardto be nimble and strategic with theresearch and with orchestrating andimplementing the branding initiativethat led to the Sarasota Orchestra.

Today, the Sarasota Orchestracontinues its pursuit of “best practice”transformational change by facingthree major issues:

1. The continued advancement ofthe demographic change.

2. The role of technology as anaccelerating agent of change.

“social club” as a way to significantlyreduce the board’s size. As boardmembers completed their service, weinvited them to remain engaged withthe organization through the MaestroSociety. The society also enables us tobuild and maintain excellentrelationships with donors andprospective board members.

The big component of the change —the development of a strong,accountable board committeestructure — was next on our to-dolist. In late 2005 and early 2006, wedecided on a structure that wouldfeature five standing committees —finance, audit, governance,development, and endowment — andeliminated the executive committee.We developed charters for eachcommittee, carefully chose committeechairs (matching their strengths andexperience), and supported the chairsin their new roles and responsibilitiesas well as on how to work in syncwith key staff members. Then, in April2006, with precise and strategicexecution, we opened the curtains onour new governance structure.

Fourth Movement: PrestoAs dramatic as it was to adopt thisnew governance structure, the boardand organization started down thepath toward another seismic eventwithin the year. In December 2006,the earlier, subtle changes in salespatterns could no longer be dismissed,so we initiated a research project toexplore causes for our declining ticketsales.

We learned that prices, programming,and competing cultural pursuits hadlittle to do with the decline. Ourpredominantly “mature” audience wasdeclining due to age-related issues. Sothrough demographic surveys andpsychographic analysis, we turned ourattention to attracting new audiencesfrom the Baby Boomer and Millennial(aka as Echo Boomers and GenerationY) demographics. What, we asked,would entice them to attend ourconcerts? The answers: interactiveprograms, a wider range of musicalexperiences, a change in our image,and less formality.

3. The organizational redefinitioncaused by the global economiclandscape.

Had the organization not embraced apioneering spirit, which started withthe board moving to a contemporarybest-practice structure, we would notbe as well positioned for this newworld. The road ahead requires —within the board, the orchestra, andthe staff — a heightened ingenuity tocompose a successful future for theorganization.

RESOURCES:

“Size of the Board.” www.boardsource.org/knowledge.asp?ID=1.242

Navigating the Organizational Lifecycle: ACapacity-Building Guide for Nonprofit Leaders byPaul M. Connolly. BoardSource, 2006.

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ones the chief executive should beheld accountable for or should anyof them be assigned elsewhere?

2. Consider if the goals aresustainable and balanced.

Most organizations do not have theluxury to spend time and moneyon short-term results. Therefore,goals must be sustainable. Forexample, any organization canimprove its profitability and achievecost savings by laying off staff,eliminating services, or postponinginitiatives, but at what cost? Afterthe goals are established, askyourselves: Are we achieving theseresults to the detriment of otherresults? Are these resultssustainable for at least five years?

3. Identify auxiliary goals forothers to accomplish.

When identifying goals for the chiefexecutive, it’s important to realizethat his or her success in attainingresults often depends on othersmeeting related sets of goals. Theseauxiliary goals support the chief

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Measure Results, Not Activities

JOYCE HENDERSONProfessor of HumanResourcesUniversity of MarylandCollege Park, MD

Do you struggle with setting annualgoals for your chief executive? Here’ssome step-by-step advice.

Does your board struggle to identifysignificant results-oriented goals tohold the chief executive accountable?If you answered “yes,” you are notalone. While most boards recognizethe significant governanceresponsibility of annual performanceappraisals and goals setting, most donot find it easy. Think about yourown chief executive’s annual goals.Are they linked to the organization’svision and mission, measurable, andfocused on results? They should be,and, better yet, can be. Just followmy lead.

1. Focus on results linked to thevision of your organization.

When I assist a board with settinggoals for the chief executive’sevaluation, I first ask the board andchief executive to walk me throughtheir organization’s vision andstrategic plan. Boards often do agreat job helping develop thestrategic plan but then forget torefer to it when determining theannual goals that the chiefexecutive must meet to achieve thisagreed-upon plan.

I then ask everyone — includingthe chief executive — to select onekey result that if not accomplishedin the coming year would put thestrategic plan at risk. Many timesthe strategic plan covers so muchthat it can split the board’s focus totoo many activities and initiativesrather than narrow it. And

remember, because some strategicgoals take years to achieve, theboard may need to dissect a largegoal into annual actionable stepsthat over time will lead to theachievement of the goal.

Effective goals focus on one or afew targeted results or outcomes.Keep in mind that an activity —implementing a new marketingplan, for example — or a behavior— such as communicatingeffectively — is a means to a result.Activities and behaviors areimportant but they aren’t what theboard should hold the chiefexecutive accountable for. It’sresults that count! Many boardsattempt to identify all the activitiesand behaviors they expect the chiefexecutive to perform rather thanisolating the key results requiredfor the success of the organization.

Identify the three most importantresult-oriented goals. Some boardsthen find it helpful to pause andask: Are these the three goals thatabove all others need to beaccomplished? Are these goals the

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executive’s goals, and are theresponsibility of others, such as theboard itself or various members ofthe organization. Examples includegoals related to a capital campaignor the introduction of a newproduct or service. These goals,like the chief executive’s, should bebased on results, not activities.

4. Scan for potential obstacles orhurdles.

If your organization developed astrategic plan recently, it’s likelythat an environmental scan

identified the external and internalinfluences for the organization.Using that information, while alsoincorporating fresh impressionsand data, you now should identifypotential obstacles or hurdles thatcould prevent the chief executivefrom achieving his or her goals.Identifying these obstacles orhurdles will help the boardunderstand what needs to besupported and funded to enablethe chief executive’s success.

Some chief executives habituallyabandon their goals. It could bethat he or she does not think theyare the right ones or areunattainable, does not believe the

board will actually hold him or heraccountable, or just does not wantto be held accountable. The boardcan avoid this by including thechief executive when identifyinggoals and by gaining agreementthat he or she will be accountablefor those goals.

5. Clarify metrics and dates.

It’s essential to include metrics ormeasurements in the chiefexecutive’s goal statements. This isthe only way you will know if he orshe has attained the results. It’s also

important to indicate when youexpect the results to be achieved. Itmay be that benchmarks areneeded each quarter leading up tothe cumulative success at the endof the year. These are crucial steps— without these two addedspecifics, you will not be able toeffectively evaluate the chiefexecutive’s performance.

6. Cascade and communicate thegoals throughout theorganization.

Chief executives who are mosteffective in achieving their annualgoals make them shared goals at all

levels of the organization.“Cascading” the goals — a termcoined by Angelo Kinicki — createshorizontal and vertical alignment inan organization, helping tominimize conflict and buildinterdependent focus on theoutcomes.

A large nonprofit I worked withwas able to cascade the goals —one of which was increasing theorganization’s name recognition —from the chief executive to all 50 ofits affiliate organizations. Eachaffiliate in turn cascaded the goalsto its direct reports, making thefocus on the goals over 350 peoplestrong rather than that of the chiefexecutive alone. The end result wasthat the organization increased itsname recognition by 15 percentagepoints nationally and, in somemarkets, by 20 percentage points.

Goal setting is vital to not only thechief executive performanceevaluation process but, moreimportant, to the long-term success ofthe organization. When goals link tothe organization’s vision and strategicplan and are results-oriented,measurable, balanced, and agreed toby the board and the chief executive,the board’s work at performanceevaluation time will be easy.

RESOURCES:

“Critical Conversations” by Jacqui Cook.Associations Now/The Volunteer Leadership Issue,January 2010. www.asaecenter.org/publicationsResources/ANowDetailLeadershipIssue.cfm?ItemNumber=46651

Assessment of the Chief Executive: A Tool forNonprofit Boards by Joshua Mintz and JanePierson. BoardSource, 2005.

More in the BoardSource Knowledge Centerabout chief executive assessment

It’s harder than you might think topush someone off a cliff. What ifshe doesn’t grab that branchpartway down? What if he doesn’trealize he has a parachute? Thenagain, what if he or she actuallyCAN fly?

As leaders, pushing people offcliffs is part of our job — as ourboards should be reminding us on a regular basis. It’s our responsibility to createopportunities for our young staff members to develop theirown leadership skills, to try outtheir own wings. It’s scary for us,however, because we don’t reallyknow what’s going to happen. We also are giving up control and parts of our own power when we teach staff members todo without our constant help andsupervision. Nevertheless, withoutpurposely created opportunities tofall (at least part of the way), howcan our staff members learn tolead and voluntarily take that leapthe next time?

I also believe that, in mostinstances, we should provide thosewe’re pushing with branches andparachutes and sometimes even alarge net (we are the net!).Challenging our staff membersshould not be a death sentence! It’sOK to start small and work up toan actual cliff, but the element ofrisk and responsibility needs to bethere. Sometimes, however, it evenmakes sense to forgo the net andlet them fall.

I watched one of my risk-takingemployees SOAR away from metoday — it was one of the hardestbut most rewarding experiences ofmy career.

A Spouse

LOU ELLEN HORWITZExecutive DirectorUrgent Care Associationof AmericaChicago, IL

Your bylaws can encourage your board members to attend meetings.

To discharge their fiduciary duties, board members must attendmeetings. Deliberation and participation are integral elements of boardservice.

To encourage attendance, some nonprofit organizations have bylawprovisions that allow the automatic removal of members who miss aspecified number of meetings (either in a year or in a row). Suchprovisions sometimes contain references to “excused” or “unexcused”absences, although this raises the issue of what will be considered anexcused absence, who has the power to excuse that absence, andwhether many excused absences are any less detrimental to boarddecision making than a few unexcused ones.

To avoid these issues, some organizations treat all absences the same.Of course, one danger of a strict attendance policy is that it couldresult in the removal of a good member who has missed severalmeetings simply because of a period of extended illness. On the otherhand, one would hope that a member with an extended serious illnesswould acknowledge his or her inability to give proper attention toboard duties and would voluntarily resign. But if a member withseveral absences does not take steps to resign, the board chair mayneed to be proactive and politely encourage the member to do so forthe good of the organization (as well as to protect the nonparticipatingmember from personal liability for dereliction of duty).

Given that state laws normally allow a member to be counted as“present” if the person participates in a meeting by telephone, andgiven that most people have cell phones that arguably allow them tocall into a board meeting from nearly anywhere in the world, thereshould be little excuse for members being absent from most boardmeetings that have been announced sufficiently in advance. Therefore,there is some merit in having some type of reasonable attendancepolicy in the bylaws and enforcing it. Alternatively, the bylaws couldprovide that board meeting attendance will be strongly considered indetermining whether a member will be reelected to another term.

Excerpted from Better Bylaws: Creating Effective Rules forYour Nonprofit Board, Second Edition, by D. BensonTesdahl, Esq. BoardSource, 2010.

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Bylaws Rule!

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Governing Green:Enabling

the SustainableOrganization

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Is your organization practicing goodstewardship toward the environment?It’s up to the board to lead the way.

In less than two generations, there hasbeen a sea change in attitudes towardthe environment. Today, nearlyeveryone wants to have a healthyenvironment, and many feel obligatedto contribute toward this goal. Wealso expect corporations and otherinstitutions toconduct their affairsin a way that doesnot impose undueburdens on theenvironment andthat complies withall pertinentenvironmentalregulations.

The expectation ofgood stewardshiptoward theenvironment appliesto nonprofitorganizations assurely as it does tofor-profitcorporations andcalls for vigilance aswell as soundpolicies andapproaches. Managing such issuesproactively therefore requiresleadership and direct board ownershipand involvement.

For many nonprofit leaders, this canpresent a quandary. You may beunclear how an environmental issuerelates to your organization’s missionor the degree to which you cancontrol or even influence your

PETER A. SOYKAPresidentSoyka & Company,LLCVienna, VA

organization’s environmental aspects.You also may be confused by themany competing voices and abundantinformation (and misinformation)making claims about environmentalissues. In total, the situation can bevery vexing, making it difficult toknow what to do or even where tobegin.

Fortunately, nonprofit board memberscan effectively leverage their talentsand limited time by focusing on thefollowing actions:

1. Define the nature of yourorganization’s relationship withthe environment.

The first and, in some respects,most important board activity is to

evaluate environmental issueswithin the context of yourorganization’s mission, vision, andvalues. The extent to whichenvironmental protection/enhancement are consistent with,support, or further yourorganization’s reasons for beingshould define the degree to whichyou view environmental activities asnew opportunities or as obligations.

The distinction is vital, and yourorganization’s posture on this pointwill flow through all of yoursubsequent decisions and activities,even if only implicitly. The boardshould take a clear position on thisquestion very early in thedevelopment of any newenvironmental initiative.

2. Develop a policy.

Regardless of how the environmentis viewed in the context of yourorganization’s ongoing work, yourboard should establish or direct thedevelopment of an organization-wide environmental, sustainability,or social responsibility policy. Thepolicy is the cornerstone of effectiveorganizational environmentalprograms and establishes theposition, aspirations, andcommitments of the organizationand all of its members.

While this task may seemintimidating, in practice, adoptionof a limited number of widelyrecognized principles and practiceswill yield a solid and workablepolicy:

• Comply with the law and yourorganization’s own commitments.

• Determine and control yourorganization’s significantenvironmental effects.

• Prevent pollution at the source,where possible.

• Conserve resources where feasible.

• Check progress and improve overtime.

• Address stakeholder input andtransparency.

Note that none of these principlesrequire your organization to addressenvironmental issues that do notapply or to invest resources toreduce/eliminate environmentaleffects unless doing so is both aneffective response and is financiallyfeasible.

Test your environmentalknowledge

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3. Establish long-range goals.

Having established yourorganization’s intendedenvironmental posture andcommitments, the next logical stepis to establish a few long-rangeobjectives. These should serve asguideposts showing the principalthrusts of your organization’senvironmental improvementactivities and future points ofreference to ensure that progressand overall direction are on track.These objectives should beaspirational, reflect theenvironmental/sustainability policyand commitments, be focused onthe medium-long term, and bechallenging but reasonable in scope

and rigor. Board members shouldeither lead or be intimately involvedin the development and approval ofthese long-range goals.

4. Assess your environmentaleffects.

Prior to delving into specific goalsand making decisions aboutprogram focus, you should identifyand assess your organization’s actualenvironmental effects. This can bedone using an EnvironmentalAspects Analysis, a key componentof formal environmentalmanagement systems (EMS) usedby large and small companies andgovernment organizations aroundthe world. The aspects analysiscomprises several sequential steps:

• Review all activities, products, andservices, and how they intersectwith the environment.

• Determine the extent to whichyour organization has control orinfluence over each. Then setaside those that are outside theorganization’s control or influence.

• Define and evaluate the“significance” of each point ofintersection (organization-environment). At minimum, thefollowing types of intersectionsshould be evaluated:

o pollutant emissions to air, water, or land

o solid waste generation

o land alteration

o use of natural resources (e.g., energy, water)

o local or community concerns or issues

When correctly applied, this simpleyet deceptively powerful approachyields a clear (and usually, small)set of environmental issues that arethe most important for yourorganization to address. This smallissue set then becomes the focalpoint for all subsequentperformance improvement efforts,helping to prevent attention and

The policy also should includeprovisions that speak to applicationand implementation:

• The policy applies to allemployees and locations.

• The policy is overseen, enforced,and periodically reviewed andimproved, as appropriate, by theboard.

• In evaluating the environmentalsignificance of your organization’sactivities, it considers all lifecyclestages of the products, materials,and services it uses and provides.

Adopting these provisions will forman effective base for any newenvironmental program or initiative.

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Board involvement in establishingboth goals and measurementprocesses is very important to theoverall success of any coherentenvironmental improvementinitiative.

6. Review investments.

Another area in which boardinvolvement is essential involvesinvestments. In many organizations,board members either serve as oroversee the actions of fiduciariesresponsible for investments.Historically, fiduciary duties havebeen interpreted as limitinginvesting activities to those thatmaximize returns given a definedlevel of risk, or conversely,minimize risk while attaining atleast a stated level of financialreturn. Under this interpretation,fiduciaries have taken the positionthat they are prohibited fromconsidering the environmental (orsocial) characteristics of firms inwhich they might invest. Thisposture has impeded the practice ofenvironmental or, more generally,

“socially responsible” investing(SRI), which makes use of corporateenvironmental, social, andgovernance (ESG) data.

During the past several years, twomajor works of legal research andanalysis commissioned by theUnited Nations have completelyaltered how fiduciary duty has beeninterpreted in the United States andseveral other developed countries.The second of the two reports,released in late 2009, goes so far as to suggest that fiduciaries have a duty to consider responsibleinvestment strategies; thatintegrating ESG issues intoinvestment and ownership is part of responsible investment; that such integration is required tomanage risk and properly evaluatelong-term opportunities; and ESGissues materially affect bothcompany-level and systemic riskand cannot be ignored by theprudent investor.

The implication is that boardmembers who neglect to considerenvironmental (and relevant social)factors when managing (oroverseeing the management of)investment accounts may besubjecting themselves to risks and,possibly, future legal liability.

7. Direct the formation andoperation of programs.

Your boards and individual boardmembers also can play a vital rolein leading the development ofinternal programs, formal orotherwise, to achieve yourorganization’s environmental goalsand improve its environmentalperformance over time. Severalissues are of particular interest:

Building space. Building energy useis often a major (or the mostimportant) source of anorganization’s pollutant emissions.Fortunately, many cost-effectiveimprovements can be made tobuildings that reduce energyconsumption and associatedemissions. While there may be onlylimited short-term opportunities tomake significant changes to

resources from being diverted toissues that simply don’t matter toyour organization’s environmentalperformance.

5. Establish specific goals ortargets.

Next, assign specific goals/targets toeach significant environmentalaspect. These should indicateprogress toward the definedobjective(s), be specific andquantifiable, and have associatedtime frames for attainment. Foreach, the organization, led by yourboard, should define one or a fewperformance measures/metrics thatare understandable to staff andstakeholders, verifiable, responsiveto stakeholder concerns, consistentwith the defined goals/targets, and,of course, environmentallymeaningful. A properly designedand implemented set of metrics anddata collection methods will yieldresults that are accurate, complete,and comparable, hence both usefulfor decision making and credibleinside and outside the organization.

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SAMPLE ENVIRONMENTAL POLICY

This policy applies to the Canadian company, Aspire Sports Supplements Inc.

The Aspire Green Policy reflects the philosophy of Aspire and our commitment toreduce the impact that our organization has on the environment and to ensurecompliance with all environmental legislation. With a focus on the four principles of“Reduce, Reuse, Recycle, and Recover,” Aspire has set specific guidelines for itsbusiness activities, including:

Compliance with environmental regulations. We seek not only to comply with safetyand environmental regulations but also to implement in-house standards to improveour environmental performance and prevent pollution.

Efficient use of resources. We seek to reduce environmental loads by attempting toefficiently use resources, save energy, reduce waste, and encourage materialrecycling in our operations.

Use of recyclable materials. We endeavor to minimize environmental impact byusing recycled paper for all our promotional materials and ensuring all productcontainers are recyclable.

Choosing green partners. Wherever fiscally possible, we attempt to work withsimilar-minded, environmentally oriented organizations and to adopt environmentallyfriendly technologies for the ordering and shipping of our products to customers andthe purchase of required resources.

Educate employees regarding the environment. We endeavor to raise our employees’environmental awareness and to ensure that they recognize the essence of thisGreen Policy by actively addressing environmental concerns.

High-level environmental standard for our manufacturer’s production facilities. Ourmanufacturer has been registered to internationally recognized manufacturingstandards, which provides our customers with additional assurance of the quality ofour products and services and our commitment to environmental responsibility.

Support for nonprofit environmental programs. Our corporate responsibility policyrequires that we make social contributions in partnership with local communities bysupporting community health programs and/or environmental initiatives.

physical space, you should considerreviewing the space occupied byyour organization and attendantenergy/environmental characteristicswhen evaluating lease renewal orsearching for new building space.Your board can play a supportive, ifnot catalytic role, in stimulating thistype of thinking and ensuring thatavailable opportunities to improvethe environmental performance ofyour organization are captured.

Travel. Trips, particularly long-distance, can be an organization’smost significant environmentalaspect, mainly because of theenergy and pollutant emissionintensity of airplanes, and, to alesser degree, motor vehicles.Clearly, the issue’s importancehinges on the frequency and typicaldistance of travel by yourorganization’s employees, therelative importance of travel tofulfilling your organization’smission, and the environmentalimpacts of other organizationalactivities. If, however, long-distancetravel can be reduced through suchtechniques as video- and Web-conferencing, your organization canboth reduce its environmentalfootprint and likely save money aswell.

Document management. The issuehere is how best to use paper andelectronic communications and inwhat proportions. Making smartand efficient use of whatever paperis employed will produce bothsome level of environmentalbenefits and reduce costs. Simplesteps such as recycling office paper(and other materials, whereappropriate) and using double-sided printing are obvious places tostart.

Material use. Your organizationmay procure and use many differenttypes of materials. Depending uponthe nature and quantities of suchmaterials, your board may wish toensure that your organization’senergy and pollutant intensity,sources, and post-use managementare evaluated and understood. At ageneral level, you may wish to

can and should be delegated tomanagement and staff, there are anumber of logical places for boardentry and involvement that willensure that the capabilities of boardmembers are properly leveraged whilenot unwisely consuming their limitedtime. And while creating some form ofenvironmental program from scratchmay seem overwhelming, there aremany useful models and examplesthat can help to show the way.

RESOURCES:

Green Nonprofitswww.jolera.com/greennonprofits/default.htm

Transformative Governance www.transformativegovernance.org

ensure that your organization ispurchasing and using greenerproducts and services when andwhere quality, availability, and costare comparable to existing offerings.Simple examples of where this typeof approach can be applied includeoffice equipment (EnergyStar!labeled), office paper (recycledcontent and/or SFI, FSC, and/orPEFC certified), cleaners (low-VOC,low toxicity), and pesticides(integrated pest management).

In the years to come, all organizations,nonprofits included, will be expectedto operate in an environmentallysound manner. Because of theimportance and complexity of theseissues, board involvement in how theyare managed is essential to the long-term success and sustainability of yourorganization. While many activities

! May/June 2010 ! BoardSource ! boardsource.org ! Board Member® ! 15

TONY SCUCCIBoardSource SeniorGovernance Consultant

Our board committees rely heavily onstaff members to do theadministrative tasks. Is this OK?What is an acceptable way to involvestaff on board committees?

The board/staff relationship is one that hastremendous potential — for constructivepartnership or for misunderstanding andconflict. Like all relationships, it must be

attended to. The best way to do this is to clarify roles,responsibilities, and mutual expectations and tochallenge assumptions.

Because this question refers specifically to boardcommittees, let’s begin by agreeing upon a workingdefinition of a board committee. Here’s one for yourconsideration:

Board committees are the board’s workforce. They report tothe board and help carry out the board’s mandate to overseethe organization, ensure its financial security, and plan forits future. Board committees generally do not include staffmembers (except, in some cases, the chief executive), thoughthey are often supported by staff. Examples of boardcommittees include executive, finance, compensation, andgovernance committees.

Often, the chief executive assigns a staff person tosupport a board committee. Although the chiefexecutive should always be viewed as the primary linkbetween board and staff, a designated staff personworking directly with a board committee allows formore efficient and practical communication. This isespecially true when board committees’ oversight rolesdovetail with specific staff responsibilities, such asfinance. It is important to note, however, that the staffperson assigned to work with a board committee is nota member of the committee; he or she supports thecommittee while continuing to work for the chiefexecutive.

There are multiple ways staff can bring real value toboard committees and their work. Staff can, forinstance, provide context, explain standards in the field,or help with background information. Whenappropriate, the staff member also may serve as thesecretary to the committee to take notes, follow up onadministrative tasks, and coordinate logistics. Board committees can be particularly productive when

they have professional staff support, but there must beclarity regarding roles, responsibilities, and mutualexpectations among the committee chair, committeemembers, chief executive, and the staff person whosupports the committee. If a board committee appearsto be squandering staff time on redundant orunnecessary tasks, the chief executive should talk withthe committee’s chair to determine how the supportingstaff member’s workload might be lessened. In someinstances, board committee members handle theircommittee’s administrative tasks and utilize staff only asliaisons between the committee and the organization.

Finally, if the relationship between the committee andthe staff person is going well, ask “How can we do evenbetter?” But if it feels like things are going awry, theyprobably are. Don’t wait for things to work out on theirown; they seldom do. Attend to the task at hand, butalso attend to the relationship; it is within thatrelationship that the task gets accomplished mostefficiently and most effectively.

RESOURCES:

“The Power of Committees” by Laurie Larson. Trustee, February2009. www.trusteemag.com/trusteemag_app/jsp/articledisplay.jsp?dcrpath=TRUSTEEMAG/Article/data/02FEB2009/0902TRU_FEA_CoverStory&domain-TRUSTEEMAG

Getting the Best from Your Board: An Executive’s Guide to a SuccessfulPartnership by Sherrill K. Williams and Kathleen A. McGinnis.BoardSource, 2006.

The responses to the “Ask Our Consultants” questions are basedon our consultants’ experience working with nonprofit boardsthroughout the country. If you would like to improve your board’seffectiveness, please consider contacting BoardSource’s consultingteam for assistance via e-mail (consulting@boardsource.org) or call877-892-6293.

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!! CC AA SS EE SS TT UU DD YY !!

Looking at the Big Picture

The Rapid Rivers Museum of Artstrives to be a place for artisticdiscovery, education, andentertainment. Six galleries presenthistoric and contemporary art bylocal, regional, and national artists; aneducation program offers organizedtours, lectures, classes, and specialevents for children and adults; and apermanent collection is representativeof the Rapid Rivers region. Themuseum receives state and federalfunding; seeks corporate sponsorshipof programs, exhibits, and events;earns revenue through individualgiving, a membership program, andsome of its educational programs; andutilizes volunteers to help run themuseum. Visitors are encouraged, butnot required, to pay a generaladmission fee. A registration orentrance fee is associated with specialexhibits.

The center is governed by a board of15 residents of the region; it meetsquarterly. At the board’s fall meeting,the members will review thefollowing dashboard. Based on datacontained within the dashboard,Samantha Smith Suarez, the chiefexecutive of the center, expects theboard to have a robust discussion.

What questions do the followingindicators raise? What issues mightthe board discuss at its meeting? Andwhat action might it take to addressthe overall direction of the center?

RESOURCES:

“A Nonprofit Dashboard and Signal Light forBoards” by Jeanne Bell and Jan Masaoka. BlueAvocado, July 1, 2009. www.blueavocado.org/content/nonprofit-dashboard-and-signal-light-boards

The Nonprofit Dashboard: A Tool for TrackingProgress by Lawrence M. Butler. BoardSource,2007.

! May/June 2010 ! BoardSource ! boardsource.org ! Board Member® ! 17

D E F I N I N G DA S H B OA R D M E TR I C S

There is no single set of right things to measure for every organization and for every board; each board must choose what’s best inregard to its current circumstances, and refrain from making it overly complicated. Where a board falls in its lifecycle may have alot to do with what the board considers important to measure. A founding board may have a set of concerns related to institutionalestablishment, formation, and initial survival. The board of an organization with a deeper history may want to assess its impact ona clientele or population group. Issues of outcome may be the primary focus for those organizations whose purpose is thepromotion of particular, definable changes in the behavior, condition, or status of a population group.

Organizations with more amorphous purposes of societal betterment may choose to focus on the quality of their services and thesatisfaction levels of those they serve. And, because all boards have clear fiduciary obligations regardless of their institutionalpurpose or lifecycle change, there may well be a common set of measures that assure any board of the financial solvency andongoing viability of the enterprise.Having acknowledged the challenge of defining dashboard metrics and the varied perspectives that can be brought to bear, thereare still ways of proceeding that can help get a board started on this important step. The following suggests six approaches todefining dashboard metrics.1. Outcomes2. Mission as spine3. Strategic initiatives4. Drivers of success5. Risk factors6. Service/resource matrixThese approaches are neither exhaustive nor mutually exclusive. Each offers a way to systematically identify performance indicatorsthat are high level in terms of their significance for institutional (or program) success, informative as to key aspects oforganizational performance, and sensitive to critical changes, especially negative changes. Staff leadership, in collaboration withthe board, should feel free to choose among these approaches and, if considered appropriate to their particular organizationalexperience and needs, combine features of these different approaches in moving toward a manageable set of meaningfuldashboard metrics.

More

18 ! Board Member® ! boardsource.org ! BoardSource ! May/June 2010 !

ARTHUR H. WOLF Board ChairDesert WetlandsConservancyLas Vegas, NV

Samantha and her board need to havethat robust discussion. Thedashboards indicate some worrisometrends: investment income, admissionfees, and state grants are all downversus expectations. Federal grantsand public donations are up, and itlooks like general administration andfundraising have either cut orpurposely underspent their budgetsto date. We don’t know, however, ifthere is a reserve fund built from pastoperating surpluses, or if there arelarge program expenses that have

LIAL JONESDirectorCrocker Art MuseumSacramento, CA

not managed more prudently in theface of the income shortfall? Whatprecipitated the drop in income, andwas it unexpected? Did the boardadopt an unrealistic budget?

It also is clear that state and federalgrant funding is below projectionsand the level of previous years, whilemembership, public donations, andadmissions are up. This is good news:There is an increasing level ofaudience engagement. The fiscalsituation is precarious, however —the surplus from the 2007 and 2008budget years cannot cover the currentdeficits, and it would appear that notmany other resources are available. Atthe same time, fundraising expensesare down. Considering the currentshortfalls, the board should considerdirecting more resources intofundraising, not less.

To steer the museum back onto acalmer financial surface, the boardmight include instituting orincreasing program fees, chargingadmission, and seeking new andincreased donations and

The dashboard presented to the RapidRivers Museum of Art’s board omitssome of the critical informationneeded to support a robust boarddiscussion, such as data aboutmonthly visitation, membership,program participation anddemographics, and attendance atspecial exhibits. This type ofinformation would allow the board toconsider financial measures of successin the context of mission-basedactivities.

This dashboard does indicate,however, that budget projections areconsiderably out of line with actualincome and expense, raisingquestions about the state of theorganization’s operations and itsbudget process. Why were expenses

sponsorships. During thesechallenging times, the board alsoshould track the museum’s fundingprogress more frequently than just atits quarterly meetings.

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While the Rapid Rivers Museum ofArt is experiencing a significantdecrease in income and an out-of-balance increase in spending thatrequires immediate course

GAIL ANDERSONPresidentGail Anderson &AssociatesNovato, CA

When I became the newest andyoungest member of a nonprofitboard, I was anxious about my lack ofgovernance experience but confidentthat I would learn and grow. I lookedforward to being mentored by anexperienced member and using myfundraising experience and expertiseto benefit the organization. And Iprepared by learning as much as Icould about the organization andeducating myself about governance.

So why was my entry onto the boarddifficult? And why are other youngprofessionals having similarly rockyexperiences? It comes down, I think,to issues of respect and trust.

Seasoned board members aresometimes resistant to bringing onyoung “new blood.” There is fear ofchange, fear that the new memberdoes not share their commitment tothe organization, and fear of anoutsider’s perspective — especially an“outsider” with considerably less lifeexperience. The results can be ugly. Ihave seen and heard of seasonedboard members challenging,undermining, and resisting all ideasbrought to the table by their board’snewest members — members whohave expertise or insights the board islacking. There is nothing morediscouraging for a young professionalhoping to contribute in a meaningfulway.

So, to seasoned board members, I say:Trust that you made the right decisionin bringing on a new, young boardmember; please respect our expertiseand insights — as we will yours; andknow that we are truly committed toadvancing the organization’s missionand strengthening our communities.

D’ANA DOWNINGBoard MemberRebuilding TogetherHoward CountyColumbia, MD

been prepaid during the year forspecial exhibits that will bring inadditional admission revenue in thefourth quarter. The dashboards alsodon’t address cash flowrequirements or uncollectedreimbursable grant expenses.

The board might discuss the timingof exhibit and program expenses;expectations for fourth quarterperformance, including fundraisingand annual giving by the public;the proportion of program activitiesfunded by restricted state, federal,or corporate funds; and theprospects for continued fundinggiven the current volatility ofgovernment and corporategrantmaking.

The board should take thisopportunity to review progress onthe current strategic plan anddiscuss course corrections that canmitigate the financial volatilitywhile continuing to engage theRapid Rivers community. Thesemight include slowing down themerry-go-round of travelingexhibits, finding interesting newways to interpret the permanentcollection, establishing a modestmandatory admission fee, andtaking steps to inspire communityparticipation through social mediaand visitor-created experiences. Theboard might also use thisdiscussion to decide what measuresare most important to include infuture dashboard reports.

correction, the larger issue may bethe apparent decrease in publicengagement with the museum and,possibly, the lack of relevancy andalignment of the institution with itscommunity.

But first, what has caused the highlevel of expenditures in excess ofincome? Why is there a heavyemphasis on program expenses andvery little for administrative andfundraising costs? What accounts forthe low attendance fees andcontributed income? Has there beena change in earned-income activities?

Immediate steps are required tomitigate the situation. These mightinclude a shift in how the chiefexecutive spends her time, anincreased board role in fundraising, amoratorium on significant and non-essential expenses, and themodification of programs andexhibitions.

The dashboard prompts otherquestions as well. How do the boardand the chief executive stay in touchabout the museum’s overall health?Are quarterly financial reportsfrequent enough? What level ofexpense or income generation (orlack thereof) triggers a change instrategy? What level of reserves mustbe in place to cushion the operation?Should the dashboard bereconfigured to provide moreforward-looking and balancedinformation about different aspects ofoperations beyond just financialtracking? And what is the role of themuseum relative to its communityand constituent base?

The current state of the museum’sincome and dramatically increasingexpenses is a wake-up call; tacklingit now is the prudent course ofaction for future stability.

B OA R D O F D I R E C T O R S

David Nygren (chair)Principal, Nygren Consulting

Roxanne Spillett (vice chair)President, Boys and Girls Clubs of America

Audrey R. Alvarado (treasurer)Former Executive Director, National Council ofNonprofit Associations

Anne Cohn Donnelly (secretary)Clinical Professor, Kellogg School of Management,Northwestern University

Linda C. Crompton President and CEO, BoardSource

Carol Goss President & CEO, The Skillman Foundation

John S. Griswold, Jr. Executive Director, Commonfund Institute

Phillip HendersonPresident, Surdna Foundation

Aaron HurstPresident, Taproot Foundation

Philip R. Lochner, Jr.Director, CLARCOR Inc., CMS Energy Corp., and Crane Co.

Kimberly Roberson Program Officer, Charles Stewart Mott Foundation

Edward B. WhitneyDirector, American Rivers, IRRC Institute forCorporate Responsibility, The Wilderness Society,Early Music Foundation

EditorAnne Atwood Mead

Contributing EditorsDeborah DavidsonOuti Flynn

Production ManagerMonica Luchak

Board Member® (ISSN 1058-5419) is published sixtimes a year and distributed every eight weeks byBoardSource, 1828 L Street, NW, Suite 900,Washington, DC 20036-5114. Tel: 202-452-6262;fax: 202-452-6299; mail@boardsource.org;www.boardsource.org.

Board Member® is provided to all BoardSourcemembers. Individual membership dues are $169 fortwo years; $99 for one year. Student membershipdues are $49 for one year. For information onorganization membership, contact BoardSourcedirectly.

Board Member®, BoardSource, 1828 L Street, NW,Suite 900, Washington, DC 20036-5114.© 2010 by BoardSource. All rights reserved.

No part of this newsletter may be copied orreproduced without permission from BoardSource.

BoardSource is dedicated to advancing the publicgood by building exceptional nonprofit boards andinspiring service. It is a 501(c)(3) nonprofitproviding practical information, tools, bestpractices, training, and leadership development forboard members of nonprofit organizationsworldwide. Through our highly acclaimed programsand services, BoardSource enables organizations tofulfill their missions by helping build strong andeffective boards.

B O A R D M E M B E R

Better Bylaws: CreatingEffective Rules for YourNonprofit Board,Second EditionMost nonprofits begin theirexistence by filing articles ofincorporation with the state.Another critical step is to draftan initial set of bylaws toestablish key governance rules— how to call meetings; whatconstitutes a quorum; how toelect, add, and remove boardmembers; how to formcommittees; and more.

Founding board membersoften get bogged down indrafting the initial bylaws,struggling to get the first setperfect and cover everyconceivable issue that mightarise in the future. Or theyblindly borrow a bylawsexample, even though itmay not fit their needs.

A helpful approach is tostart with very basic bylaws that cover major issues

surrounding meetings and elections and then gradually amend those bylaws overtime as the nonprofit matures and as new governance issues arise that were not clearlycovered by the initial bylaws.

Better Bylaws will help you draft workable rules. The book includes

• a definition of bylaws• an overview of the issues and areas bylaws should address• examples illustrating the relationship between state laws and bylaws• samples that can be used as a starting point or to revise existing clauses• helpful advice on how to choose among alternative bylaws provisions• instructions on how to amend bylaws

Carefully crafted bylaws and adherence to them can help ensure the fairness of yourboard decisions and provide protection against legal challenges. Give your bylaws theattention they demand.

By D. Benson Tesdahl, Esq. 102 pages. Includes CD-ROM. 2010. (#386) $34.00 members; $51.00 regular price

Are you givingyour bylaws theattention they

demand?