EFFECTIVE BOARDS

Mark Ventry

Executive Director,

Ontario Co-operative Association

• Roundtable: – Identify: Your name, please!– Define: What does “effective board” mean to you? – Explain: What is your role on/with a board of directors?

INTRODUCTIONS

• Provide clear direction• Have Sufficient resources• Prudent oversight• Don’t micromanage• Use action item lists: Did I do my tasks?• Effective communication between board

and management• Ability to debate, discuss and disagree as a

board, then move forward• Establish committees to move forward as

required• Positive relationship between staff and

membership• Remain true to vision, mission• Act in the best interests of co-op &

members

What does “Effective Board” mean?

• Accountability and financial understanding• Mentoring and support to each other• Willingness to learn; ongoing education• Set policy not procedure• Sit in different chairs at each meeting• Good listening skills• Embrace diversity• Keep board and management duties separate• Respect board confidentiality• Maintain a board “memory” (some longer

term directors, for example)• Commitment• Host ‘blue sky sessions’ now and then• Manage succession planning and turnover• Be aware of differences between operational

and governance boards

Summary of comments made at London Regional Co-op Conference, October 30, 2012

• Clarity: Types of boards: governance, operational …• Consideration: Changes in a board over the lifecycle

of organization: start-up, established, renewal, growing …

• Types of boards: governance/policy, operational …• Be aware of changes in a board over the lifecycle of

organization: start-up, established, renewal or growing.

• Co-op boards must be accountable to members and abide by co-op principles

• Triple bottom line: social, environmental, economic (people, planet, profit)

Four key areas:– Leadership– Stewardship– Monitoring– Reporting

It is far more difficult to lead than to do!

ROLE OF BOARD AND DIRECTORS

BOARD: What is to be achieved? For whom and at what cost?MANAGEMENT:How will it be achieved?

BOARD “owns” Vision, Mission and Values (the ‘ends’)MANAGEMENT “owns” Strategic Plan (the ‘means’)

VISION: Where do we want to be in the

future

MISSION:Why do we exist? And for whom?

VALUES:What essential beliefs guide our

decisions/actions?

VISION, MISSION AND VALUES

The Board’s Role In Strategic Planning• Review and approve• Understand and challenge assumptions• Understand critical success factors• Ensure sufficient due diligence• Ask, is the plan realistic/achievable?• Ask, how will success be measured?•Monitor performance

An effective board has …Outstanding leadershipUnquestioned legitimacy and effective powerEnlightened definition of function, role and responsibilitiesOutstanding competenceA supportive, functional culture; andEfficient management of function, structure and process

From: MAKING BOARDS WORK, Richard Ivey School of Business, University of Western Ontario, Canada

KEY SUCCESS FACTORS

DIRECTORSHIP COMPETENCE MAP

Business know-how Dealing with people

Personal development

Strategicplanning & thinking

Finance

Co-op& industryknowledge

Marketawareness Corporate

governance

Leadership

Boardroom practice

Teamwork Influencing & negotiating

Self perception

Judgment & decision

making

Directing change

Managingworkload &

pressure

Interpersonalcommunication

Presentation

Being a Director

• Trustees for membership• Ultimately responsible for legal and regulatory compliance• Hire and supervise CEO/GM/ED• Strategic planning • Financial overview• Set policies • Ensuring own effectiveness• Agree/Disagree: What else?

ROLES: Board

• Implement financial controls and management• Implementation of policies and board directives• Day to day operations of organization• Hire and supervise staff• Create practices• Agree/Disagree: What else?

ROLES: Management

• Provide new Director orientation• Provide ongoing board training/education to all board members • Hold an annual planning retreat; develop plans, deepen

relationships• Role of an Environmental Scan• Review and monitor strategic plan regularly; awareness of

organization and its goals• Encourage board members to proactively share ideas for

enhancing the organization’s and the board’s effectiveness• Do not set the stage for the board to rubber stamp staff

initiatives!

EMPOWER & EDUCATE DIRECTORS

Where it starts, or where change can really be effective!!

Role of the Nominating and/or Governance Committee• Develop a list of the expertise and skills required• Create an inventory/matrix • Communicate the skills desired and pursue candidates • Part of ongoing membership communication• Treat recruitment as a serious task; develop a plan and

timeline• Develop a plan to increase the skillset of existing board

members

Board Recruitment and Succession Planning 1 of 2

Role of Youth • Youth Director - vote/non vote, (token???), path

to/from Youth Committee, etcDiversity – • Is the board reflective of membership• Skillsets, capabilities and attributes of board

membersBoard Terms • Maximum terms – useful?• Knowing when to leave, before being asked.

Board Recruitment and Succession Planning 2 of 2

An Effective Chair…

• Will help the Board fulfill its role in a timely and sustainable manner.

• Is Task and goal focussed• Understands the organization’s and/or sectoral issues• Is focussed on people: awareness of speaking and personality

styles; encourages contributions• Is conscious of succession planning; mentoring for the role; board

member aspirations to advance• Is in effective and regular communication with Management

Conduct Effective Meetings 1 of 4

Ineffective leadership“Representational mindset”Lack of sustained commitment to Vision, Mission, ValuesUnclear definitions of functions, roles and responsibilitiesLack of clarity between role of management & BoardLack of mutual trust within Board and between Board & Mgmt Imbalance of skills/competenciesPoor information management (too much/too little)Burnout of Board membersTurnover of Board members and little/no corporate memoryLack of succession planning

BARRIERS TO EFFECTIVE GOVERNANCE

Effective Agenda• Use a consent agenda (see next slide)• Allocate time, and then stay on time during meeting• Include background information in package. • Make pre-reading mandatory • Have package in directors’ hands 7+ days in advance• Monitor discussion, call for vote when discussion repeats or

gets off topic• Put largest board issues at the beginning of the agenda; less

consequential matters at the end of the agenda.

Conduct Effective Meetings 2 of 4

A consent agenda (called a “consent calendar” by Roberts Rules) is a bundle of items that is voted on, without discussion, as a package. It differentiates between routine matters not needing explanation and more complex issues needing examination.

The main purpose of a consent agenda is to liberate board meetings from administrative details, repetitious discussions, and misdirected attention. The main benefit is better governance.

Consent agendas allow the board to regularly dig deeper on strategic issues rather than take a superficial pass on a lot of issues.

More information: http://www.boardsource.org/Spotlight.asp?ID=116.365 More information and an example: http://www.help4nonprofits.com/UseItToday/UseItToday-Consent_Agenda.htm

Consent Agenda

Typical consent agenda items are routine, procedural decisions, and decisions that are likely to be noncontroversial. Examples include: • Approval of the minutes; •Final approval of proposals or reports that the board has been dealing with for some time and all members are familiar with the implications; •Routine matters such as appointments to committees; •Staff appointments requiring board confirmation; •Reports provided for information only; •Correspondence requiring no action.

What Belongs on a Consent Agenda

Board packages must be complete and sent out in advance so that directors are aware of agenda items and can read their material!

• At the beginning of the meeting, the chair asks members what items they wish to be removed from the consent agenda and placed on the regular agenda for discussion.

• If any member requests that an item be removed, it must be moved to the regular agenda without further discussion.

• The chair asks for adoption of the consent agenda, and then moves on to the next regular agenda item.

• When preparing the minutes, the Secretary includes the full text of the resolutions, reports or recommendations that were adopted as part of the consent agenda.

How Are Consent Agenda Items Typically Handled?

It is important to make sure that all directors know what items belong on the agenda and how to move items to and from the consent agenda. For this reason, instruction on using the consent agenda should be part of the board orientation program.

Effective Minutes• Reflect substance of the discussion and result (action, motion,

to table, etc.)• Consider using a recording secretary• Determine action items from each meeting• In camera sessions – maintaining minutes?

Conduct Effective Meetings 3 of 4

Use of Committees• Ad Hoc vs Core Committees• Use of operational committees to fill voids in

management• Member and stakeholder engagement• Pathway to sitting on the board?

Conduct Effective Meetings 4 of 4

1. FINANCIAL - Ask questions. As examples:• What concerns, if any, do you have about the financial position of

the organization?• Please explain significant variances from the budget. (While

income may be difficult to budget, expenses, in most cases, should match closely to expectations.)

• Are you confident that cashflow from normal sources will be sufficient to meet needs in the foreseeable future?

Determine key results areas, ratios or other methods of ‘scoring’ and monitoring the organization financially.

LEARN about financials, from your Chair, other board members with financial expertise or the treasurer or CFO.

Board Best Practices 1 of 4

2. MONITORING AND EVALUATING THE CEO

• Balanced scorecard – BENCHMARKS - update on plans and direction; financial goals

• Frequency - monthly, quarterly• CEO evaluation – quarterly, yearly (benchmarks)• When to look for a replacement

Conduct Effective Meetings 2 of 4

3. ESTABLISH A LESS IS MORE PHILOSOPHY

• Facilitate a ‘Start, stop, continue’ exercise for board activities• When to consider: • Fewer board members (more work, but better relations?)• Fewer or shorter meetings (become more focussed on what is

important; downside…?)• Spend less time on operations and board roles (fundraising,

committees, etc)

Conduct Effective Meetings 3 of 4

4. TAKE EVALUATION SERIOUSLY

• Self evaluation and/or board (group) evaluation • Expectations – what to do with the results• Frequency (after each meeting, quarterly, yearly)• Process – public, confidential, use facilitator, use an off the

shelf solution• How to move from survey results to an action?• …Otherwise, why bother surveying…

• Revisit action plan quarterly

Conduct Effective Meetings 4 of 4

Discussion: How to get member buy-in

Promote Member Engagement

Presented by:

Mark Ventry

Executive Director,

Ontario Co-operative Association

mventry@ontario.coop

www.ontario.coop