A few months ago, I was asked to review a manuscript that touched on the subject of nonprofit boards and innovation. It struck a nerve, and I’ve been sore ever since.
As an example of recent innovation in nonprofit board practice, the manuscript cited the use of the “consent agenda.” A consent agenda allows boards to lump routine decisions into a single agenda item—eliminating the need to waste time discussing boilerplate items. The board can then approve all the items with one vote and minimal discussion.
To the best of my knowledge, the consent agenda concept was first discussed in The Effective Board of Trustees, a book by Dick Chait, Tom Holland, and Barbara Taylor that was published 17 years ago. Since then, it has been mentioned in several BoardSource publications.
Although I have a few reservations about the utility of the consent agenda in practice, my sore spot is not with the concept. What I find frustrating and astonishing is that this relatively minor tweak in the way boards go about their business, which was first suggested almost 20 years ago, is so often cited as a prime example of innovation in nonprofit governance.
Really? Is that all we’ve got?
If boards were generally high functioning and effective, I could understand the reluctance to innovate. Why mess with a good thing, right?
But there’s abundant evidence that boards often don’t function all that well. Just read through the comments that have been posted to this blog.
Or take a look at the Daring to Lead 2006 report. In it, about one-third of the nearly 2,000 executive directors surveyed reported low levels of board engagement and performance.
Or review Francie Ostrower’s eye-opening 2005 study of nearly 5,000 organizations, in which large numbers of respondents—between a third and half—rated their board’s performance as only fair or poor in most areas of board responsibility.
If what we’re doing now isn’t working for large numbers of boards, shouldn’t we be trying new things?
To be fair, there’s innovation taking place beyond the consent agenda. Boards are constantly downsizing and upsizing to find the right balance between inclusiveness and unwieldiness. Electronic communication and governance software are changing the way board members receive information and make decisions. But these things strike me as “mini-vations”—small and incremental changes at the margins—rather than real innovation.
On the theoretical side, Judy Freiwirth, Ruth McCambridge, David Renz, and others have proposed interesting new ideas about the fundamental role and purpose of boards. But what’s not clear to me is how the average executive director or board member is supposed to translate these ideas into innovative practice.
But then again, maybe I’m wrong. Perhaps exciting, big-picture board innovations are taking place all around us. If so, I’d like to hear about them. Any innovations out there?
10 Responses to Desperately Seeking Innovation
dparker626 - October 12, 2010 at 2:23 pm
Great post, Rick. Keep pushing us!
rebeccaleet - October 12, 2010 at 4:31 pm
Rick, I’m not suggesting an innovation, but here is something more Boards really should be doing in these difficult times: looking at a cash flow spreadsheet at some fixed time each year. It would show how close to the edge an organization is really living. Or whether questionable practices — like spending restricted grant money to cover cash flow on a routine basis — are alive and well in the organization. I see more and more organizations that need to do this.
shirleymarshall - October 13, 2010 at 8:56 pm
Rick. Great question, especially for frustrated Executive Directors! Here’s another: could functions of the Board [keeping connected to "community," fundraising, governance] be done by another entity and only the executive officers kept on for form’s sake?
Could, for instance, an audit function be used to ensure that proper controls are in place. For fundraising, many nonprofits already use “Friend of..” entities. As to keeping in touch with community: does this help or hinder in true innovation of services and achieving major change? Some Board members will always prefer to hand out food, regardless of the “outcomes.” If nonprofits are monitored by funders in terms of their accomplishments, does it matter if they have 3 or 30 Board members?
Personally, I’ve seen both extraordinarily good and pretty bad Boards. The common thread: they take a lot of resources. Board members must be kept informed, included in discussions, have meetings organized, etc. This takes staff time. While a good Board makes this worthwhile, does that mean the outcome is valuable enough to justify the cost? Great boards have members that can provide pro bono advise, thoughtful discussion, and leadership in common with the ED. But couldn’t a well chosen Advisory Board do the same?
The fear seems to be that the ED will take over and … do what? Pay him/herself too much? Change the agency? That can go on right now. Maybe finding a way to tighten financial controls would be a better innovation than requiring a full Board of Directors? Just thinking out loud…
chron504 - October 14, 2010 at 8:57 am
Honestly, a funder pushing back against constent agendas because they’re not innovative enough? When did innovative become the holy grail? Oh, wait, that’s right – funders typically only support the “new” in lieu of infrastructure. “Give us big and bold, get to scale now,” right?
Surely you know better than most that a great many NPOs are smaller and for the vast number of executive directors (who are new to the game), a constent agenda is a giant step forward.
Your articles show that you can write, but what about advise? You ask “Is that all we’ve got?” Okay, let’s see what you have that’s better.
judyanderson - October 14, 2010 at 11:56 am
Rick-I agree with you. If the system was working, then why do we need consultants (which I am one) repeating the same ideas and formats (which I try to avoid if it won’t break through the problem)?
How about, for starters, reformatting the board chair’s job description to be less of the “king” and delegate some leadership to other board members?
How about creating a team leadership and partnership model with the ED as the norm, rather than having the ED “work for the board and follow their direction in strategic planning, vision, ideas”?
What about recognizing the consistent challenges of nonprofit governance, including the understanding that many board members often are out of touch with the constituency that is being served, as well as those disenfranchised in the community? Instead, they have been recruited because of their connections to possible funding.
loringsternberg - October 14, 2010 at 9:57 pm
Rick as a member of The Fund Raising School Faculty and a Senior Governance Consultant with BoardSource I will personally testify that the consent agenda is perhaps the most under utilized governance tool known to our sector.
Sure it is not new as a concept but it is new to hundreds of thousands of nonprofits who spend the bulk of their board meeting time debating the absolute wrong things, never discussing the most critical issues – fundraising, board member expectations and accountability and board recruitment to name a few.
Using it properly is more than cathartic for the hundreds of boards I have worked with. Perhaps you should have said: “often using old techniques can lead to innovative outcomes”.
Afterall, the wheel is a pretty old invention that has lasted a long time and still serves mankind farily well.
Keep those observations coming…
Dave Sternberg
linda_crompton - October 15, 2010 at 9:26 am
I’m happy to see that the Chronicle is focusing on the critical issues that face nonprofit boards, and that Rick is flagging the importance of innovation in the sector.
Innovation doesn’t occur in a vacuum, and nor is it very often the “killer idea” of a single individual or organization. True and lasting innovation comes at the end of an iterative process involving a lot of conversations and minor “innovations” like consent agendas! Maybe I’m just an optimist, but I see lots of signs that these conversations are happening – the recent Texas Nonprofit Summit –“On a Mission – Igniting a Nonprofit Revolution”, our own Board Leadership Forum coming up –“Open for Innovation: Governing in a New Era” and countless other convenings are being held throughout the sector that specifically address this question of new board models and practices. I think the need for change has indeed been recognized, and innovations are brewing!
Linda C. Crompton
BoardSource
Rick Moyers - October 16, 2010 at 11:06 am
In response to Chron504′s comment above. I suppose I could have done a better job of articulating my point, which is that the consent agenda is a perfectly fine arrow to have in our quiver of innovations, but it can’t be the whole arsenal. As for the consent agenda itself, doesn’t its effectiveness depend on the nature of the items that typically come before the board? The boards I’ve been on have struggled to come up with things to put on the consent agenda — and if the only two items on it are the minutes and bank account signature authority approvals, it hasn’t really saved all that much time or transformed the work of the board.
The comment about funders being obsessed with supporting newness and innovation at the expense of general operating support and infrastructure — while true — seems like a cheap shot. I wasn’t suggesting that failure to innovate would have an impact on any organization’s worthiness to receive grant support. Organizations using traditional approaches to governance that lead to engaged and effective boards are just fine by me. And while I think my work at the foundation puts me in a good position to observe and comment and ask questions, I’m hesitant to advise toward any particular form of innovation until I have a better sense of what people are trying and what seems to be working. Which is why I wrote the post — and the comments have been really helpful.
Rick Moyers - October 16, 2010 at 11:13 am
Amen, and I’m planning a future post on this topic. In the mean time, I recommend Richard and Anna Linzer’s excellent books and tools on cash flow budgeting and planning: http://www.linzerconsulting.com/materials.html.
buckbruce - October 19, 2010 at 6:36 am
Maybe finding a way to tighten financial controls would be a better innovation than requiring a full Board of Directors? Just thinking out loud…Organizations using traditional approaches to governance that lead to engaged and effective boards are just fine by me. And while I think my work at the foundation puts me in a good position to observe and comment and ask questions,Or whether questionable practices — like spending restricted grant money to cover cash flow on a routine basis — are alive and well in the organization. I see more and more organizations that need to do this.
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