Earlier this year, two of Canada’s two largest cancer charities announced that they would be merging in an attempt to avoid financial crisis caused by drastically reduced donations. Reports indicate that shrinking resources is not unique to these two charities but a widespread trend throughout the charitable sector.
Decreasing donations is but one of many disruptive challenges that charities and not-for-profit organizations are facing. Domestic charities and not-for-profits must embrace a changing political landscape, while those operating internationally face working with increased war/conflict and an ever-decreasing space for civil society action.
Managing these many disruptive forces calls for Board of Directors to develop and maintain the requisite competence and character to provide direction, oversight and control.
More than ever, charities and not-for-profits need Boards which have the clarity and skills to set out the strategic direction for the organization and at the same time have the determination to oversee and control the implementation of an agreed strategy.
A Board which truly understands its important governance role with respect to strategy will empower management to operationalize the organization’s strategy, while at the same time retaining strategic direction and oversight.
Here are some thoughts on ensuring that the Board is fulfilling its important strategic function:
Clarify the Board’s Role in Setting Strategic Direction: Openly and honestly assess where the Board is at on their governance journey. Is this a Board that heavily micro-manages, does the Board intervene, has the Board become merely advisory or does the Board actively and appropriately govern (providing oversight, direction and control)?
Review the Board Charter : Once the Board has determined what their appropriate role with respect to strategy should be, reflect in the Board’s Charter the strategic role you want the Board to have.
Review Board Composition: In addition to important functional skills such as oversight of finance and human resources, does the Board have members who think and act strategically? Profiling your Board and recruiting Board members who have the skills to engage at a strategic level is an important function for the governance committee to undertake if the Board is to fulfil its role in strategy.
Provide Training and Director Education: Tools such as The Professional Director Certification Program™ offered through Governance Solutions can take directors to a new and appropriate level of understanding on their roles and responsibilities.
Provide Training and Director Education: Tools such as The Professional Director Certification Program™ offered through Governance Solutions can take directors to a new and appropriate level of understanding on their roles and responsibilities.
Ensure Strategy is a Standing Agenda Item: Keeping strategy on the Board’s agenda will:
- keep it top of mind;
- ensure that management is reporting at a strategic level;
- make the Board aware of new threats and opportunities; and,
- ensure that there is an appropriate strategic cycle.
Reporting is made easier with the use of a Board-level score card which measures performance against agreed objectives.
Ensure There is a Healthy Boardroom Culture : Thinking strategically means having Board members who are open to debate, willing to engage in respectful discussion and who can come to consensus on strategic issues. Formally reviewing Boardroom culture is a healthy first step to ensuring that the Board engages in strategy in an appropriate and productive manner.
Make Strategy Engagement Part of Board Evaluation: In both collective and individual Board evaluations, ensure that the effectiveness of the Board in fulfilling its role in strategy is included as an evaluation topic.
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