The Evolution of Non-Profit Boards

The Evolution of Non-Profit Boards

Non-profit Boards of Directors typically follow an evolutionary path as the organization matures. This tool lays out three stages of Board evolution and identifies the characteristic behaviors of each stage. This tool can apply to public agencies, city councils, non-profits, and co-ops. Board members can use this tool to help clarify their role and adapt the Board’s focus accordingly.

Stage 1: The Doing Board

In the early stages of a non-profit, Board members typically handle a lot of responsibilities – because there’s a lack of staff to do so. They raise money, manage staff, handle projects, coordinate publicity, advocate with officials, set the strategic direction, gather volunteers, answer telephones, and develop web sites. In short, they do anything – and everything – the organization requires.

During this time, there is a giddy feeling of creating something special. Board members feel invigorated, challenged, and entrepreneurial. Typically, a small number of founding Board members devote countless hours of volunteer time to the effort. They become the “core” Board. During this time, Board meetings are typically action oriented. There’s little time to work on the Board’s fiduciary or governance role.

Stage 2: The Transitioning Board

As the non-profit becomes successful, it makes key moves to stabilize its operations. It hires an experienced executive director. The Board undertakes a more disciplined approach to its role, focusing on overseeing the organization rather than directly managing it. The Board begins to distinguish between the role of the Board and the role of Board members. A key governance principle is established – that the Board can only make decisions as a Board; individual Board members lack decision-making authority.

As this new sense of discipline is taking root, the Board’s “core” founding members experience a sense of relief that the pressure is off; at the same time, there’s a feeling of loss of control for some of them. Certain Board members may not make the transition successfully and may become impediments to success.

Stage 3: The Governing Board

As the non-profit grows and becomes more successful, the Board defines its governance role and responsibilities with even more precision and discipline. If the Board is the governing body, it articulates policies stating that its role is to: a) set the strategic direction, b) hire and fire the chief executive, c) perform fiduciary oversight, and d) establish long-term policies. In the case of advisory Boards, they may decide their role is to raise money, provide technical expertise, or do public advocacy.

Whatever the role defined by the Board, this is the time of maximum clarity. The Board has the time to define its role and responsibilities and monitor its success in fulfilling these responsibilities. At the same time, it also sets measurable goals and targets for the organization, allowing the Board to develop a performance scorecard. This helps align the organization and increases its effectiveness. At the same time, this is also when people are most likely to call on the Board to do things that lie outside its prescribed role – thus setting up potential conflicts.

LRI’s consulting is designed to achieve real, meaningful change for our clients.

Eric Douglas

Eric Douglas is the senior partner and founder of Leading Resources Inc., a consulting firm that focuses on developing high-performing organizations. For more than 20 years, Eric has successfully helped a wide array of government agencies, nonprofit organizations, and corporations achieve breakthroughs in performance. His new book The Leadership Equation helps leaders achieve strategic clarity, manage change effectively, and build a leadership culture.

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