[MUSIC] Hello again. Professor Vic Murray here, and welcome to week two of the third course in the Coursera specialization, improving leadership and governance in non-profit organizations. This course focuses on factors that impact the ability of the board of directors to carry out its role and responsibilities effectively. Last week professor Harrison covered the important topics of board structure, operating procedures, and meeting leadership. This week the focus is on one of the most difficult challenges to board performance. Creating the ideal mix of board members and providing them with the training to make them as effective as possible. So here are the questions that this short lecture will address. First, let's be clear, what do we mean by board composition and development, and why is it important? Secondly, why is it difficult to change the composition of the board? As we'll see, it is, for many quite difficult, but why is that? Thirdly, how do you design the ideal mix of board members? Fourth, if you have an ideal mix in mind, how do you locate and recruit these people? The best people you need for the organization, for the board. Fifth, when you've got them, what are the best ways to orient and develop both new members and existing members of the board? And finally as always, a few questions to inform your peer to peer discussions. So lets start by addressing the question of what we actually mean by board composition and why it is important for people like us, researchers, consultants, and board members to understand the nature of board composition. Simply put, word composition refers to the characteristics of the individuals who comprise the membership of the board. Now, there are many characteristics that people bring with them when they come onto a board. They have different personalities. Those personalities are shaped by background characteristics that they have. Male, female, old, young, having different cultural backgrounds, ethnic or racial backgrounds, plus they have their education that can differ, their socio economic status, their work experience. They have different kinds and amounts of connections that may or may not be useful. So there's so many ways in which the mix of characteristics that people bring to the board can be important and have an impact on how the board works. Now getting the right mix of people on the board is important because if it's not matched to demands of the critical issues facing the organization, it can negatively affect the way the organization performs. As we'll see, the best board is the board that's ideally matched to the situations in which it and its organization exist. Not only does this mix affect the organizations performance though, boards that don't reflect the communities in which the organization exist, those they served, those who provide resources, those who are allies and partners potentially. Not reflecting those communities can damage those communities by getting out of touch with their needs and resources. As you may know by now, for the past, six years or so, Professor Yvonne Harrison and myself have been studying how board members themselves and those who relate to boards perceive the board's problems and functions. We've been using the board checkup instrument that some of you have been using and probably know by now. And one of the interesting findings from that research is that many boards perceive that the mix of people on the board could be better suited to the needs of the organization. But they also say, it's very difficult to find and recruit these kinds of people. So that is a real problem it's a dilemma. Why is it that this occurs? Well there are several reasons. Some of them are external to the organization. Perhaps just a shortage of available people, but some of them are internal to the board itself too and they could be called structural reasons for a failure to change. For example, there are a number of non-profits still today that have in their bylaws and constitutions no fixed terms of office. Most by now do usually have some kind of a clause that says a board member will be appointed for a term of one, two or three years, and that term might be renewed twice or three times, after which they're expected to step off the board. And that automatically does bring an opportunity for change. If there are no fixed terms, yeah, boards can still change, but it can be a slow process and it becomes much easier to recruit people just like the ones who have stepped away. Another structural problem is that when it comes to finding board members, there is no actual process or a structure for doing it. One comes up to the annual meeting and about a month or two before someone says my God, we need two new board members. Who knows somebody? So there's no responsibility for oversight such as a governance committee. A governance committee, which in the past was often known as a nominating committee, is the body that's responsible for trying to identify and recruit the best possible board members. Without one it becomes much more haphazard. And with that of course having a committee per say isn't really quite enough. There needs to be a systematic process for identifying and recruiting the best people. Another reason for a failure to change though is not so much structural or procedural as just the board's informal taken for granted, unspoken culture in which the shared understanding is, well, the best people to get on the board are people like us. We've done good job, so let's search among our friends and contacts and colleagues and we'll find some people like us. That definitely does make it a problem to find the right mix. Okay, so how does a board that feels the need for a change in its makeup actually go about doing that? Or maybe more commonly how does a board that has some vacancies to fill go about finding the best people to Put in them. First of all, we have to understand that there is no universal ideal mix of board members for all nonprofit boards at all times in all situations. There's only an ideal mix for a given organization, a given board at a given time, facing a given set of circumstances. However, there are a few basic minimum qualifications that are desirable in all board members and here are three of them. There may be more, but in our experience, these three are really important to try to find in whoever you bring onto the board. And they are kind of obvious. The person really should believe in the mission of the organization and feel a commitment to achieving that mission on a personal level. Secondly, they should be willing to contribute the time and effort. It isn't really good enough to say, yes, yes, you do good work and I'll happily sit there but I don't actually have much time to devote to it. Thirdly, and this is wonderful if it can be achieved. It's someone that you can ascertain is able to see the big picture, and what is best for the organization as a whole. They won't necessarily come with a predetermined agenda or the feeling that they only represent one constituency that it's their job to speak for. Okay, so how should a board go about actually deciding on the kind of people they need in future members of the board? And here we recommend that the board creates something like what we have in our book, improving the effectiveness of boards of directors of nonprofit organizations. We call it a recruitment grid. And it's on page 51 of the book. And here, the main component of this is the identification of the criteria that will be used to screen potential board members. These are the attributes, characteristics, and skills of potential members and existing members. And the procedure is to identify the criteria, look at one's existing board members, and see how well they fit the criteria. Identify the gaps that aren't covered by existing members and use that information in the search for new members. What do I mean by criteria? We identify three different sets of criteria in the sample board recruitment grid we offer in the book. And they refer to such things as connections with important stakeholders that the organization deals with. People such as clients, or users, funders, actual or potential partners, governments and other regulators, community leaders, business leaders, and others that might be important for your organization. Another set of criteria have to do with useful skills and experience that can be brought into the board by potential new members. Experience and understanding of things like fundraising, strategic planning, leadership, finance and accounting, marketing, etc. Also in the chapter I might add, we do discuss the importance of not picking people who will be able to duplicate what management already possesses in the way of skills. But be able to use their backgrounds in strategic thinking and direction at the big picture level. We also mention there demographic representation. That it may be important for your organization to have in its support, that give it balance on the basis of things like gender. Geographic location may be important for your organization, age distribution, ethno-racial backgrounds, socio-economic status backgrounds. All those are potentially important. And I do urge you, on this matter of diversity of backgrounds, to watch the video that goes with this section that has to do with my interview with Pat Bradshaw. So once one gets those gaps identified, then this is the first big step for getting the ideal mix of people on the board. Now let's look at how one actually goes about locating and then recruiting new board members. Here are five basic steps. First of all, let's assume there is a Governance Committee of the board, or if there isn't, think very carefully about creating one. Governance Committee, as we said before, used to be called in some organizations a nominating committee. Governance simply extends, expands its areas of responsibility to include training and orientation of board members and tracking how well the board's performing. So let's assume it exists. It needs to then establish the recruitment needs using a recruitment grid, such as we just described in the previous PowerPoint slide. And let me add that this should be done well in advance of the actual process of finding the people and getting them to agree to stand for the board. Unfortunately, too often this happens about a month before the annual meeting at which board vacancies will be filled. Then there's a bit of a panic ensues. Best of all is if these recruitment needs and the whole process starts, well, it could even be as much as a year before the new members are actually needed. This committee, having identified the gaps needing to be filled, needs to then widely broadcast a call for nominations. This means more than simply going to the rest of the board and saying, hey, folks, give us some names of people who might come on the board. It means going to all sorts of other people who might have contacts and knowledge of potential candidates, such as members of the management team, client groups, funders, others in the stakeholder groups surrounding the organization. And they need to be informed of the qualifications being sought and how the process will proceed. Assume they come up with a whole bunch of names. First pass at these may reduce them somewhat. But then there comes to be another step which is to ask those nominators to provide some information on how well they fill the gaps in the recruitment grid. And maybe some background, further background information on the potential nominee. Then it's the job of the Governance Committee to assess the suitability of these nominees and create a ranked shortlist of prospective candidates. That is easier said than done. It's not easy When going for board members, it's not the same process as trying to fill positions in the staff where you can. It's very well known that references will be checked and background will be looked into. Here it has to be done a little more subtlety sometimes. But nevertheless, the committee should be trying to assess just how suitable they really are, these potential nominees. Once that short list is created, then each person on the list should be approached. And the best approach should be through the board chair who has the position, the dignity, the prestige of that position to bring to the discussion with the nominee how much they might be willing to sit on the board. Okay now, let's assume that your recruitment process has been a success and you have a fine, upstanding group of new board members coming on. The next most important step is to make sure they become effective as quickly as possible. What does that really involve? It's called the orientation process, and it's got at least three major components. One is to provide them in advance, well before their first meeting, with an up-to-date board manual covering basic information on the organization and the operation of the board. This can also be augmented by things like the minutes of previous meetings, so they get a sense of what the most recent business is that the board's been dealing with. And then there needs to be some kind of formal orientation session. This would be the case whether it's only one person coming on or several, three or four. Formal in the sense that it is scheduled, it's got a time allocation, and it's going to be with the most important people in the organization, such as the executive director and the board chair. In which they will be given a full background exposure to what the board does, a tour probably of the organization, a meeting with other key people, and things of that sort. It needs to be planned and systematic. And then once they start attending board meetings, it's a big help if there can be a buddy system. Or more formally a mentor designated to take the new board member under his or her wing for the first year or so. And meet with them on occasion, have a coffee to discuss how they perceive the meetings they've been attending. And to give them, again, background and helpful other information to help them get up to speed for the board. That's all for new board members that needs to be done. But it's not wise to assume that the existing board members don't need any further development either. We've found in our research and consulting practices that when one interviews individuals on the board, or gives them a survey to complete, such as the one you're familiar with that we use at boardcheckup.com. They can identify areas in which a significant number of them feel the need for more training. It will become apparent that they are not comfortable with understanding the financial systems used by the organization or the way funds are raised. Or they don't really quite get it about strategic planning. So these identify crucial areas where individuals need further development. And if there's enough of them, it could be the board as a whole that needs it. Also, some organizations have found it useful to have individual board members carry out their own self-assessment of their own performance in which they identify areas where they believe they need more development. It's pretty interesting how people can be honest if given the chance to say yes, I believe I made these contributions. I've done well here, but I'm not so comfortable with what I've been able to do in this other area. And if those kind of gaps can be identified, it again becomes quite possible for the board to develop additional sessions or information, things to read, etc., to help these individuals get up to speed. Just to give you an example of an individual board self-assessment form, we have added one to the wiki page for this session, and you might find it useful. So that's it for the content of this session on how to improve board composition and develop the board's skills and abilities. Let's wind up as we usually do with a few discussion questions that I think you might find interesting in exchanging views on. For example, how about this paradox that comes out of our research in which we find many board members and others connected to boards perceive that there needs to be an improvement in the mix of people on the board. But then when we look at them a year or two later, and ask, so what kinds of changes have you been making in the way your board works? We find that changing the mix is one of the least changed. It's obviously difficult for organizations and boards to do this. So the question is, why is this? Why is it so difficult to overcome this willingness to change and actually make it happen? Another interesting question is the one that comes out of the interview with Pat Bradshaw on board diversity. Where she has been tracking this, the extent of diversity on nonprofit boards in North America, for quite a few years now. And discovers that there has been a growing number of representation of women on boards. Not so much, however, in the way of representation by ethnicity, race, or socioeconomic status, for that matter. Is this important, and why might this be that this latter kind of diversity seems so difficult to achieve? And what specifically could be done to improve it? Finally, how can boards make sure their candidates for membership are doers and not just people with good-looking credentials? It unfortunately is the case that we pick potential new members on the basis of some paper qualifications. And we don't really manage to find out whether they are actually going to be willing to act and be doers, not just representations of the law or marketing or public relations. How can boards make sure they get doers? So that's it. Thanks for listening, and I hope you find this useful.
