Building Blocks for Nonprofit Boards

By Mitchell, Jessica | THE JOURNAL RECORD, January 28, 2005 | Go to article overview

Building Blocks for Nonprofit Boards


Mitchell, Jessica, THE JOURNAL RECORD


Training plays a vital role for board members as a growing number of nonprofit boards are feeling an urgency to understand the importance of their governance responsibilities.

Though Sarbanes-Oxley was directed toward for-profit boards of directors following corporate governance issues with companies like Enron, the same accountability is having an impact on boards of directors, said Carol Wilkinson Troy, president and CEO of the Center for Nonprofits. There is a bigger need than ever before for nonprofit boards to understand that they have the ultimate responsibility for the professional ethical standards and accountability of the nonprofit businesses they oversee.

Craig Knutson, vice president of research and convening for United Way of Central Oklahoma, agrees training is critical in order to have the proper oversight of nonprofits.

All one has to do is look at the level of questionable, unethical, and illegal behavior we've witnessed over the past two to four years. While the CEO and his immediate 'soldiers' have most often been the ones indicted and or imprisoned, much of this problem has to do with poor oversight on the part of their directors, Knutson said. With proper training (of bylaws, understanding profit and loss statements and other critical budgetary issues and reports) and staying true to the mission of the organization/company, most of these activities could have been averted or minimized.

Training is absolutely critical for directors to have; they need to understand and hold the CEO accountable for his and his employees' actions; without that basic foundation/understanding, accurate oversight cannot occur, he said.

Board members can gain training from a variety of consulting sources aimed at strengthening the capabilities of nonprofit organizations. Earlier this week, the Center for Nonprofits, Junior League Oklahoma City, Junior League Tulsa, Leadership Oklahoma City, Leadership Tulsa and the Volunteer Center of Tulsa teamed up with Oklahoma City Community College and Tulsa Community College to present the Dynamic Boards: Emerging Trends and Promising Practices conference. The goal of the conference was to provide a learning opportunity for board members and volunteers wanting to enhance their leadership skills.

Attributes of a quality board

Nonprofit organizations should make sure their board membership is reflective of the community in which it operates, according to Knutson. Diversity on the board - including race, geography and industry - is vital, he said.

Having at least one person with legal expertise, accounting expertise, and marketing expertise would be ideal, Knutson said. Nonprofit boards need to be operated like for-profit companies as much as possible - know who your customers are, develop a strong marketing strategy, and have strong oversight of ethical and budgetary matters. Having involved members who are knowledgeable and who are willing to ask the tough questions make for a quality board.

In his strategic model of governance, Mark Light suggests that rather than giving the right answers, the strategic board asks the right questions; with four main questions providing the framework of an overall governance plan for the strategic board. …

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