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Tuesday, July 9, 2013

Why Board Performance Matters

Some could argue the duties of today’s boards, particularly in the nonprofit sector, are among the most important in all of society’s work. Nonprofit boards shepherd and champion the least-served in the least-funded arenas: human services, social causes, education, health and the arts.

Yet as fluctuating economic and business conditions affect the philanthropic sector, nonprofits are too often spotlighted on the precarious edge. Articles about financial mismanagement and other struggles are more prevalent than ever. Media reports have featured headlines such as “local nonprofit on verge of shutting down” and “accusations fly at local nonprofit.” Publicity such as this affects an organization’s ability to raise funds and achieve programmatic and financial goals. It can also inhibit an organization’s ability to strategically prepare for the future or achieve sustainable performance.

While most boards do a solid job, forward-thinking board members are asking how to measure their performance to ensure they meet their responsibilities and limit their liabilities. In these challenging times, evaluating board performance is not just a concern—it’s an essential principle of good governance and legal and fiduciary responsibility.

Why does board performance really matter? Because success starts at the top, and the organization’s leaders—board members and executive management—are there as guardians of the mission and caretakers who ensure service to their distinct community. In a classic servant-leadership model, each tier of an organization serves the level beneath it so that service reaches the ultimate end user. In the nonprofit world, the end users are the people who receive the benefits and services from these critically important agencies.

Individuals on boards are often successful achievers. They’ve chosen to allocate their time to the entity their board is working with, so it stands to reason that they would expect a sense of fulfillment from their role. If a board is not functioning at peak performance, board members may become disillusioned and disengaged. When a board member doesn’t achieve their potential in their role or when they resign, the organization loses not only a committed volunteer, but also a valuable donor and critical link to the financial community.

Today’s challenge for many organizations is to secure both funding and committed board members. In a time of economic scarcity and competitive adversity, nonprofit boards, already inherently challenged, have an intensified need to successfully execute their duties and achieve consistently high performance. Organizational success and board performance are inextricably linked. Board members are your visionaries and your champions—take care of them so they will stay and make sure you achieve your potential. Ensuring effective governance requires regular performance evaluation, and it must be a priority. Contact JD Coaching and Consulting to learn more about effective board evaluation.

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