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the board and the ceo each have specific responsibilities in together advancing the mission of the npo and their roles are complementary not competing they're complementary to each other hi everyone tristan mcivre here a program advisor at amc npo solutions today on the strategic nonprofit i have invited our founder and ceo tom abbott to the podcast hey trista great to be here great to have you on the podcast today tom thanks for coming so today we're going to be discussing about governing and managing your organization so what areas would somebody need to look at um when thinking about that yeah so this is a really great question and i love this this is the foundation this is how it all starts so typically there are three general responsibility areas that every non-profit has to look at you've got planning implementing and then monitoring so let me unpack these a little bit so with the planning area you're looking at things like forecasting sales or forecasting member revenue dues acquiring operating funds deciding on staff requirements all of these things are around planning well then you've got implementing the actual doing right which could be hiring staff maybe purchasing office supplies and equipment purchasing raw materials developing products or services for sale advertising products or services actually running the program so that's the implementation and then the third area is what we would call monitoring so everything from you know tracking sales volumes tracking production costs reviewing financial statements basically looking at how are we doing as an organization yeah no that's great thank you for sharing all those uh the those comments there tom so what is the complimentary model of board governance well the the complementary model of board governance is a framework that makes a clear distinction between strategic leadership and operational management so under this model the board and the ceo each have specific responsibilities in together advancing the mission of the npo and their roles are complementary not competing they're complementary to each other so in the comp model the board provides the overall leadership and strategic direction for the organization it then delegates authority and responsibility to the ceo the chief executive officer now this is done in a very deliberate manner that will provide the ceo with a broad degree of freedom to exercise the creativity and judgment to achieve the organization's strategic goals so the board ensures that the goals are clear the parameters of the job and the approval points are established and the evaluation criteria are clearly articulated and mutually understood so that's a big picture overview of the comp model so what would the um other roles of the board of directors be well the the board is trained and encouraged to provide what we call aggressive collective leadership and direction to the organization so the the board meets its leadership responsibilities in five broad ways so number one the board is responsible for approving the strategic direction of the organization so what does that mean well it's the board's responsibility to determine the vision and the mission as well as the strategic goals and priorities of the organization based upon feedback from other directors staff and key stakeholders now while the staff and others will undertake the preparatory work in the planning process it is the board's responsibility to make the actual decisions on goals and priorities so that first responsibility is approving the strat plan of the organization number two is setting the governing policies of the organization so here the board establishes the governing policies that will guide the organization in the fulfillment of its mission now these policies will reflect the values and guiding principles that will determine the organization's strategic goals objectives and activities and they provide the appropriate point of departure for the ceo to actually implement those programs and services and or develop some subsidiary policies so setting the governing policies of the organization is the second responsibility of the board now the third is to provide what we call financial and legal stewardship so here the board approves the annual budget that will allocate the financial resources in a way that's consistent with the strat plan the goals and the priorities so this is the part of the board's responsibility for ensuring the stability and the endurance of the organization and the board is also responsible for ensuring that all legal requirements are met so that's number three providing financial and legal stewardship now the fourth responsibility area is for the board to monitor and evaluate organizational effectiveness so as the board must answer for the performance of the organization it needs to monitor the results that are achieved and evaluate the npo's performance in terms of the strat plan direction improved by the approved by the board so monitoring will provide an opportunity for redirection if it's required in order to achieve the goals identified monitoring is typically accomplished through four types of reports which i can talk about on another podcast but basically it's looking at having regular ceo reports having board committee and task force reports any commission reports from independent external third parties and financial reports to the board so the fourth responsibility area for all boards is monitoring and evaluating organizational effectiveness and the fifth and final part is the hiring and evaluating of the ceo so ultimately the board is responsible for the engagement direction and evaluation of the ceo as well as all decisions on the ceo's employment with the organization i'm curious to know a little bit more about the policies what policies do the governors the the the um directors govern well yeah so that's a good question so a lot of boards struggle with really knowing well what exactly are we supposed to do as a board and what sort of policy areas are covered by the board so essentially the board is responsible for articulating its policies regarding these areas uh the strategic goals of the organization for example what is the organization set up to achieve and for whom what are the short-term and long-term goals and what resources are committed to them so that's the first policy area governed by the board is the strategic goals of the organization now the second area would be around the board's governance processes answering the question what are the processes by which the board will fulfill its leadership responsibilities what is the board's approach to delegation and its understanding of the roles and expectations of directors committees task forces and staff so the board's governance processes that's areas that the board needs to focus on and then finally ethics how does the board define a code of conduct for directors and the ceo looking at such issues as ethical behavior and conflict of interest so those are the three major policy areas that are governed by the board thanks for sharing that tom i really appreciate that so what um would be the responsibilities specifically of the directors so i just shared kind of big picture the what the board needs to do but then when we look at individual directors they have a few different responsibilities starting with communication so individual directors need to be aware of the issues facing the organization so that they can participate in board discussions on a basis that's consistent with their role uh they're also expected to contribute to the npo in ways other than simply serving on the board so communication is a big responsibility of directors the second is board meetings so directors have a responsibility to be adequately prepared to express their views and ideas to actively listen and to give due consideration to the views of their board colleagues so being at and actively participating in board meetings they also need to support board decisions so this involves providing leadership to the organization the board has to speak as one with a consistent voice and each director is responsible for participating fully in the board's discussion and decision making process and then supporting those decisions made so support for board decisions is a third responsibility uh fourth we look at board committees so when directors serve on a board committee they actually assist the organization in meeting his responsibilities under its constitution and bylaws so they participate on the board committee on the same basis as any other volunteer that is they have no special authority to act on behalf of the organization beyond the limits of the terms of reference of the committee so i can talk more about committees on another podcast but this is a really interesting topic so serving on board committees is certainly a role a responsibility rather of directors there's also board task forces so when directors serve on a task force they assist the organization by developing policy alternatives and then make recommendations for the board's consideration so along with other volunteers similar to board committees they have no special authority to act on behalf of the organization beyond the limits of the terms of reference of that task force and when created each task force is given a termination date for its activities so board task forces part of the responsibilities of individual directors and then finally we have something known as ceo working committees so when directors serve on a ceo working committee they actually assist the ceo in meeting their administrative responsibilities within the organization ceo working committees receive their terms of reference directly from the ceo and directors who serve on those committees report to the ceo for that purpose so that's a really interesting topic and i'm sure we're going to do an episode on committees and task forces so i'll save that for another time but those trista are the general responsibility areas for volunteer directors excellent yes we will be doing another podcast to go to committees uh at a later date but i just wanted to learn a little bit more about you know with the meetings uh what would be the role say of the chair in the meetings what would be the most important thing that that they have um to offer to keep meetings running well the role of the chair is critical i mean that the chair of the board is providing leadership in maintaining unity of purpose within the organization's governance structure and provides a holistic and comprehensive view in overseeing the affairs of the organization now it's important to note that the chair does not represent a particular sector region or personal position but rather adopts an inclusive perspective on issues or policies under consideration so the chair also takes particular concern for the unity of the board it's attentive to its processes and it's functioning as a leadership team in which all directors are actively engaged the chair is responsible for ensuring that meetings of the board are designed and conducted in a manner that facilitates the kind of comprehensive and inclusive dialogue and effective decision making required to fulfill the board's responsibilities and the achievement of the organization's mission so the role of the chair is not one that people should take lightly or loosely but it really is the foundation for good governance and running the board effectively yes absolutely and then running the actual op you know organization would that would be the role of the ceo can you explain to me a little bit more about the difference between the board's role and the ceo's role yeah so you know when we look at the complementary model of board governance we do see clear distinctions between who does what so when we look at the role of the ceo it's their responsibility to oversee the implementation of the board's policies they make sure that those board policies get done so every effort's made to ensure that these policies are as clear as possible but is recognized that judgment is required in the implementation of policy within specific situations so in the event that the ceo is not clear about the application of any of the board's policies the ceo should definitely raise the issue for further clarification by the board now the ceo is also responsible for the effective and efficient management of the organization in ance with the policies and the budget established by the board so this responsibility encompasses delegation of full authority over the organization's op like operating activities and their resources responsibility for achievement of the organization's strategic goals and ultimate accountability for the organization's results the ceo is responsible for ensuring that timely accurate and concise information is provided to the board so that it can fulfill its leadership responsibilities now the ceo's responsibility should be detailed in a job description and annual work plan that's approved by the board and these documents should clearly articulate the board's expectations and finally the ceo is accountable to the entire board of directors individual directors do not provide direction to the ceo or to other staff staff below the ceo level report to the ceo and the ceo alone excellent thanks thank you for thank you very much for the clarification and just wondering if you had any final thoughts or if there was anything that you wanted to touch on well i think one final thing that i'll mention is it's really important to ensure that the ceo has um a good performance evaluation right so this is something that i hear from a lot of ceos that they feel like maybe they have a lack of clarity or they haven't had a formal structured written performance evaluation so one of the final really important responsibilities of the board so if you're just getting started right now and you're hearing this podcast for the first time and thinking about well what do i need to do as a next step with my board make sure that your board is approving the process for the evaluation of the performance of your ceo and this process may include input from the directors but it's primarily driven by the chair the chair provides the board with a summary report of the results of the process so this just says even more the importance of the role of the chair thanks again thanks again tom for joining us today on the strategic nonprofit hey my pleasure thanks trista if you want to take your knowledge skills and non-profit organization to the next level by mastering governance and strategic planning join amc's npo academy the link is in the notes