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Effective governance by the board of a nonprofit organization is a rare and unnatural act, according to two researchers. Virtually all boards can improve themselves. A review of the literature reveals 20 activities that are vital for nonprofit boards. They have been categorized into four major areas: financial, operational, staff, and strategic. An effective way to assess nonprofit board's performance is to review the minutes of past board meetings. The board should put financial issues on the agenda only for budget approval, year-end closing, and discussions of exceptions to the budget. At the meeting before the annual review and approval, the board should discuss, at length, the goals for organizational programs. At each board meeting, the COO should report issues that affect delivering services and meeting organizational goals. Board members should be encouraged to discuss and resolve crises. Effectively managing board meetings is a critical part of an effective board.

"Effective governance by the board of a nonprofit organization is a rare and unnatural act," according to two researchers.1 While this statement may be alarming, evidence proves there's truth to it.

Virtually all boards can improve themselves. But what's the best way to go about it? First, we must determine what makes a board effective. A review of the literature reveals 20 activities that are vital for nonprofit boards.2 These activities are listed in Figure 1. They've been categorized into four major areas: financial (establishing and revising budgets and keeping track of the organization's financial health); operational (overseeing the organization's ongoing performance); staff (selecting, recruiting, and monitoring staff and board members); and strategic (establishing the mission and making plans to achieve it).

An effective way to assess your board's performance is to review the minutes of past board meetings. You can use a simple frequency chart to determine which of the 20 tasks in Figure 1 were discussed at each board meeting. If possible, also record the amount of time spent on each activity.

You may find, as many boards have, that most of your board's meeting time is taken up with the two financial activities and that few of the remaining 18 areas are discussed at a level corresponding to their importance. If you find a lack of balance, here are ways to improve future board performance:

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Financial

* The board should put financial issues on the agenda only for budget approval, year-end closing (which is a legal requirement), and discussions of exceptions to the budget.

* The board should devote one entire meeting to reviewing future program and service components to build the budget in a "bottomup" fashion.3 This is the best way to integrate the board's financial, operational, and strategic responsibilities.

Operational

* At the meeting before the annual budget review and approval, the board should discuss, at length, the goals for organizational programs. Once these goals are approved, costs can be established and discussed at the next meeting. If the budget needs adjustment, appropriate changes should be made to program goals. In this way, there's an integrated program and budget approval process.

* Progress for each program (as compared to the approved goal) should be discussed at each meeting by exception only (in other words, only if the goals are being surpassed or aren't being met).

* Each board member should be encouraged to question any proposal or information presented during meetings. These questions should be subject-specific or process-oriented, and shouldn't be personalized. When discussions are required, the chair should propose other ideas to promote discussion.

* The infrequency of board meetings make them ineffective for sharing critical information necessary for governance. Consider creating an electronic "chat-room" to improve sharing between meetings.

* At the end of each meeting, board members should rate the meeting's effectiveness, using three methods. First, they should tally the time spent on each of the 20 areas in Table 1. second, they should detail which of the 20 activities were done well and which were done poorly. Finally, they should give the meeting an overall rating, with 1 being poor and 10 being excellent. These evaluations should be included in the minutes of the meeting.

Staff

* At each board meeting, the chief operating officer should report issues that affect delivering services and meeting organizational goals.

* The chief operating officer should report staff issues affecting organizational effectiveness that require resolution by the board.

Strategic

* Board members should be encouraged to discuss and resolve crises.

* A specific, standing agenda item should be incorporated into the meetings to discuss existing or anticipated crises.

Effectively managing board meetings is a critical part of an effective board. If you're having problems attaining quorums, if board members are focusing on minutiae, or if board members are becoming antagonistic, try concentrating on the core board activity: meetings.4