Whether you are new to a Board of Directors or have been on a Board for a long time, you’ve likely heard about the two “types” of boards in the non-profit sector: working or governance boards. In this blog post, I’d like to examine the differences between the two and showcase the situations in which each type of board shines.
A Working Board.
A working board is often found when a non-profit is just launching or is so tiny that it has only a small number of volunteers with clearly delineated roles. In this situation, board members have dual roles or wear various hats depending on their activities.
One day, these volunteers may sit at the Board table as a board member, cooperatively setting strategic direction, defining policy, and participating in board committees with other Board Members. The next day, they may play an active role in the organization's daily operations, whether marketing, client care, bookkeeping, etc.. In other words a working board has operational responsibilities even if they are volunteers..
It is important to note working boards collaboratively set strategic direction and make decisions at the board table. These same people may then be responsible for individually unrolling the strategic direction or decisions as a working volunteer. The key is that the strategic direction is set collaboratively by the board by board members. Then, the individual or work team determines how to operationalize the goals and objectives by creating and implementing an action plan and unrolling that plan as volunteers. The Board Member's and Volunteer worker's roles must be clearly defined in such situations.
The line between what is strategic direction or decision-making and what is operational must always be front and centre for volunteers working in an organization with a working board. Confusion and tension can reign if a worker decides to make a strategic decision without having a collaborative discussion with the Board.
Care should be taken to ensure that no one volunteer becomes the “leader” on an operational or board level. When one person claims “ownership” of operations and sits at the board table, they tend to let that individual influence the decision-making process as they are in the know. This can lead to resentment as other ideas are not considered.
This can happen when one individual starts a non-profit and recruits others to fill the board seats. Because the non-profit’s mandate is their passion, they take on a growing leadership role over time, essentially becoming the Executive Director (without the title).
Opportunities for Chaos
In situations like this, chaos can ensue in one of two ways.
The volunteer running the organization wants to maintain their seat on the board and collaborate to set direction and make high-level decisions as they are “in the know” about the intricacies of the organization. Unfortunately, sitting on the board and being the “operational leader” creates conflict. As the operational lead, their role at the board table is to inform the board of what is happening on the ground and let the board take that information and set the direction accordingly. This can be a bitter pill for a non-profit's founder and critical volunteer to swallow if they don’t understand the value of separating strategic and operational planning.
When a founder becomes an operational leader, it is natural for them to feel they have all the information they need to make operational and strategic decisions. This is particularly true if a working board is not meeting regularly or the distinction between the board’s role and the operations role is not clearly defined. The challenge with this scenario is that without realizing it, the operational leader can shift the organization's strategic direction by small degrees over time without the Board being notified, and the outcomes achieved may differ from those set out in the strategic plan. This failure to achieve the goals set in the strategic plan will reflect poorly on the operational leader – even if they did achieve success in the direction they took under their decision-making parameters. At this point, the board is irrelevant, and the organization does not meet the criteria for being a non-profit.
Governance Board
Governance models are usually found in well-established and well-funded non-profits. Much like in the working board, the division between the board and the staff lies in the distinction of duties. The Board is responsible for setting strategic direction and making strategic organizational decisions. In this case, the organization will have an operational leader, often called Executive Director (ED) or Chief Executive Officer (CEO).
The ED’s primary responsibility is to manage the operations of the organization. Once the Board develops a strategic plan, the ED collaborates with the leadership team and staff to translate the strategic goals and objectives into a comprehensive, detailed action plan. This action plan then prioritizes staff activities and acts as a guide to achieving the strategic direction established by the board.
When you join a governance board, you are not expected to be involved in “operational” activities. Depending on the organization's strategic goals and staffing capacity, you may be invited to participate on working committees that focus on board-related objectives (i.e., policy development, fundraising, community engagement, special events).
As governance boards are not actively engaged in operations, they can be asked to invite community members to be donors, represent the organization in the community, or recruit new board members and volunteers. Some board members choose to volunteer in an operational role, too; however, this is separate from their role as a board member.
Governance boards are standard in the sector, and in most instances, the distinction between the ED and the Board and their roles is clearly defined and respected. That’s not to say that Governance Boards don’t have their issues. They do. However, the challenges look very different, with clear lines of distinction built into the structure. Check out our blog post: From Chaos to Clarity: Transforming Dysfunctional Boards into Powerhouses.
Is your Non-Profit ready to transition from a Working to a Governance Board?
Every non-profit goes through growth stages if it succeeds in delivering its mandate. Consider the following before you jump into making the transition from a working board to a governance board:
Is there enough demand for your services that your volunteers need help to keep up with the delivery of services?
Do you have a contingency fund that covers hiring an operational leader and program staff for six months?
Have you identified grants, subsidies, corporate sponsors, or other revenue streams to fund ongoing staffing and organizational development on an ongoing basis?
Are your current working board members willing to train staff and step back to become governing board members? Or will they step away from the board and become a staff member? Plan for this.
Do you have experienced board recruits in the pipeline who can help with the transition from a working board to a governance board?
Before moving from a working board to a governance board, be sure to plan by answering questions like these. Watch for our next blog post where we explore the steps to take to transition from a working board to a governance board.
What type of boards have you been involved in? what was your experience with working boards? With a governance board? Do you have a preference? Share your stories in the comments below