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8: The Composition and Development of the Board

Symptoms

A major component of effective boards is having the right combination of people on them and providing them with ample opportunity to learn what they need to know to be good governors. The two basic requirements for all board members is that they becommitted to the mission of the organization and have the time and energy to devote to the work of the board. After that, the specific mix of leadership competencies that is best for a given board in the environment in which it works can vary greatly from one organization to another. Even though most boards probably have members who get along quite well some may have a sense that, as a group, the mix of people might not be ideal. They may feel that the board as a whole is lacking in expertise, is not diverse enough and/or has not received the level of orientation and training it needs to become highly effective. A high percentage of agreement with the following statements indicates that board composition and development might be improved:

  • Looking at the board as a whole, there is not enough “new blood” coming on to it to bring fresh energy and ideas.
  • Finding high quality new board members is a problem for us.
  • We do not pay enough attention to making sure we get the mix of skills and backgrounds we need in the new board members we recruit.
  • The diversity of public with an interest in this organization is not well represented in the make-up of the board.
  • We don’t do a very good job of orienting and training new board members.
  • There is not enough ongoing professional development and training for regular board members.

Diagnosis

There are several possible reasons for issues relating to composition and development of the board:

As with so many problem areas in board governance, the root of difficulties with the composition of the board may lie in the culture that the board has evolved. Unspoken shared attitudes may exist such as, “We can always find good members just by asking our friends”; or, “It’s too hard to find new people so let’s just keep the ones we have”; or, “New members can easily learn the ropes just by sitting in on our meetings and watching how we do things.” Where do such attitudes come from? Sometimes there are informal subgroups within boards—older members who have been around a long time, for example—whose opinions dominate the rest of the board. Since their selection and training was informal and based on connections to prior board members, they feel there is no need to change.

Another source of the difficulty in developing a better mix of members and a trained board is failure to allocate responsibility for doing this to a specific role (e.g., chair) or board committee (e.g., governance committee). Thus, even though the board may sometimes talk about developing the board or recruiting different kinds of new members, it may not be knowledgeable or organized enough to implement those practices.

Board by-laws that make no provision for limited terms of office for board members invite the possibility that the board will not attempt to rejuvenate itself.

It could also be the case that the board does not carry out regular assessments of its own performance and is thus “blind” to the need for change in board composition selection criteria or development practices.

A special kind of blockage to changes in board composition can arise in relatively new organizations dominated by one or more “founding fathers.” The problem created is called Founder’s Syndrome. It occurs when the founding fathers (or mothers) of the organization have created a culture, like that described above, in which board turnover is believed not to be necessary. Instead, the founders see themselves as the “keepers of the flame” and don’t want to risk newcomers making changes in how things are done.

Treatment

To increase the effectiveness of the governance function, consider the following approaches to board composition and development.

Board Composition

Critical to having a successful board is getting the right people on it in the first place. The difficult part is deciding who will be “right” for the organization. Too often the tendency is to appoint members who resemble existing members or who are suitable for conditions as they were but who may not be suitable for a changing future. There is a good deal of advice available to those who are seeking to put together a successful board but there are only two universal criteria which are supported both by research and the “how-to” authors:

Board members must be committed to the organization’s mission, i.e., they must believe strongly in what the organization is trying to do and seriously want to help. A board dominated by people who sit on it as a favor to a friend or because they believe it will look good on their resumé will not usually be effective.

Prospective members must have the time and energy to devote to the board’s business.

Establishing board recruitment needs

The first step in finding the best potential members for a board is to be clear about the kind of people one is seeking in the first place. One way to do this is by compiling a board needs document. Table 8 provides one example of a simple recruitment needs grid that can be used to identify possible composition gaps on the board.

Table 8: Sample Board Member Recruitment Grid

Composition of the Board

Board Members

Potential Board Effectiveness Criteria

A

B

C

D

E

F

G

Stakeholder Connections

Clients/Users/Audience

Funders

Actual/Potential Partners

Governments or Other Regulators

Community Leaders

Business Leaders

Other

Useful Skills and Experience

Fundraising

Public Relations/Community Relations

Leadership

Finance/Accounting

Planning/Strategy/Innovation

Legal

Marketing/Social Media

Human Resources

Performance/Project Management

Data Analytics/IT

Other

Demographic Representation

Balanced diversity among the desired demographic characteristics such as:

Gender

Geographic Location (region, district, state, country)

Age

Ethno-Racial Background

Socio-Economic Background

Down the left hand column of Table 8 are listed some of the kinds of background characteristics of individuals that might be important to have on the board. The actual characteristics chosen should be decided on by each organization as they might vary depending on local conditions. Across the top of Table 8 are listed the names of the current board members. The committee doing the nominating then informally assesses the composition of the board by checking and describing the extent to which each member possesses each of the characteristics in column 1. The board could then be “rated” according to the extent to which it meets these criteria: in terms of being “high” (present board members fulfill each criterion), “medium” (some criteria are met but not all) or “low” (a number of the criteria are not met by the present board members. A careful examination and discussion of the results of this process should give the committee an indication of the “gaps” in desirable background characteristics needed by the board at that time. This becomes the basis for the subsequent recruitment drive.

Note

The needs matrix discussed above will identify potentially useful characteristics in future board members. However, to know that someone possesses a certain qualification or experience does not necessarily mean that they will perform well as a board member. They must be able and willing to ‘do’, not just ‘be’.

There are also many other important questions to answer when it comes to finding the ideal mix of people for a board. The main ones are discussed below.

Should boards be composed primarily of “important” people?

Having many “big name” people on the board can help in giving the organization credibility and a high profile in the community. And some, if not all, “names” have valuable talents. The dilemma is that many of these people may be on other boards or are so busy in their day jobs that they don’t really have time to do much more than make token appearances.

Many organizations elect to keep the percentage of “prestige” members relatively small and tolerate minimal involvement as the price that must be paid for their ability to provide contacts and credibility. The majority of the board carries the workload. Of course if the “busy names” become the majority of the board, this can often lead to a rubber stamp board that simply approves recommendations brought to it by management.

The other approach is to put the prestigious names on an “Advisory” or “Honorary” Board comprising those who can give useful help with specific matters (such as fundraising) and heighten the organization’s profile but who are not expected to govern.

What is the right amount and kind of diversity to have among board members?

It is generally agreed that boards should represent the diversity of the people that they serve but research has established that many boards do not achieve this representation (Bradshaw, Fredette & Sukornyk, 2009). Instead, the majority of their members have similar demographic and other background characteristics (usually middle class, middle-aged, well-educated, with business or professional experience and of European ethnic origin). To what extent this affects the board, or organization’s performance depends on how diverse the populations are that the organization serves. The hypothesis is that a non-representative board will increase the chances that the agency will serve the needs of non-mainstream communities poorly. Put in positive terms, the advantage of expanding a board’s diversity along ethno-racial, social class, gender and other dimensions is that this will improve the board’s “boundary spanning” function and lead to better strategic leadership.

On the other hand, the fear associated with a very diverse board is that these new kinds of members won’t always understand how the board operates and won’t be able to make decisions in the best interest of the organization as a whole. Again, there is no research evidence that this frequently happens. Differences in background may sometimes make it more difficult to develop a comfortable, open, problem-solving climate but it is not impossible. Given careful selection of the individual nominees, placement in the “right” role (also known as functional inclusion), and an adequate board development program, a diverse board can be much more effective than a homogeneous one (Fredette & Bradshaw, 2011).

How much should the board be made up of “stakeholders” who have specific interests in the organization, as opposed to more general “community representatives”?

Stakeholders consist of organized interest groups, e.g., on a university board of governors, there would be representation from the student government, the faculty association, government departments, the alumni association, support staff association and associations representing the community. Again, the positive side of organized stakeholder representation is it promotes “bringing the outside in” and “taking the inside out.” Once more, the downside risk is the possibility that the representatives will feel they must act solely in what they see as the interests of the organized group they represent. Hard data on the extent to which this actually happens is very scarce. The probability is that problems arise only infrequently, but stakeholder organizations can cause major upheavals during crisis periods such as downsizing, opening or closing programs, or shifting attention from one client group to another. Again, great care in selecting the individual representatives and thorough board training in putting the interests of the organization first can help minimize the frequency of destructive approaches to conflict during periods of change.

How well should candidates know the organization and the field that it is in?

Another dilemma is the extent to which the board should consist of members who already have an in-depth knowledge of what the organization does and how it operates. For boards using the working board model, this is quite important, at least for selection of the majority of their members. For Governing Boards, it may be impossible, other than by choosing internal stakeholder representatives. A majority of Governing Board members will not be “experts” in the organization they govern or the “industry” in which it operates. This raises the question: how can they provide strategic leadership? As noted, the solution to this problem lies in thorough orientation and provision of at least partially independent information systems for the board.

How much should “business skills” be emphasized?

What is the extent to which board members should possess specific skills or knowledge based on their employment or training in areas such as business administration, corporate law, accounting, marketing, human resources, performance management, IT, and public and government relations. One school of thought says this kind of talent is very useful for providing the executive director with invaluable free advice on all sorts of management issues. The other says it is overrated and runs the serious risk of creating a board which is going to be primarily interested in management and unable to focus on governance issues. Again, there are no data to support either of these assertions so probably there is not a universally correct mix. Organizations with working and mixed model boards are, by definition, deficient in certain operational leadership and management skills so board members who can help fill such gaps are important. Even in large professionally managed institutions there can be certain areas of specialized knowledge that the organization cannot afford to pay for but which a board member might possess. As a general rule, it is wise to be aware of the skill, knowledge and abilities of the Executive Director and his/her management team. The better they are, the less need for board members to fill gaps. When it is necessary to select board members with specific skills, the key is to train these useful specialists to understand that their expertise will be sought in the roles of advisors or implementers only, not as decision-makers.

A note on the need for board candidates being willing and able to donate money to the organization

In some cultures and certain nonprofit organizations that depend heavily on donations from the public or corporations, there is an expectation that board members show their support for the organization by making a personal donation of money. The belief is that showing the public that all board members make donations will help in fundraising appeals. There are two points to consider when thinking about making board member donations a criterion for member selection:

Though most professional fundraisers tend to believe that publicizing a unanimous board donation record makes a difference to how much external donors will give, there is no actual evidence from empirical research showing that this is so.

If showing unanimous donor support is deemed to be necessary, it is not necessary for such donations to be large. They need only be what each member is willing and able to afford.

What individual personal qualities to look for?

Developing broad criteria for board selection such as those discussed above is important but, in the end, the most important criteria are those that are the most difficult to specify and measure in potential candidates for membership. These are the personality characteristics that one wants to see in board members. Everyone who has ever spent much time watching different boards come and go in an organization will agree that, some years, the majority of board members seem particularly quick to understand issues, be creative and constructive in their handling of differences and business-like, while in other years the opposite qualities prevail. Since most boards don’t like to check carefully into the personal qualities of the people they nominate, it is almost a matter of chance how well the mix works out in any particular year.

What is needed, clearly, is: (a) an attempt to articulate the kinds of personality characteristics and personal values that are being sought and (b) a serious attempt to state how they will be discerned in any given nominee. Under heading (a), the following are some of the qualities that we found were associated with high impact leadership on nonprofit boards:

  • Honest, helpful, and humble.
  • Self and socially aware.
  • Able to “see the big picture.”
  • Creative and open to change.
  • Able to communicate, work well with others, and handle conflict respectfully.

Regarding (b), there is not enough space here to provide a full review of the most valid methods for assessing these characteristics in people; most textbooks on human resource management will do that. Suffice it to say here that the essence of the process lies in how the candidates’ past behavior is checked through references. This process needs to be systematically thought out in advance and implemented with care. The all-too-common method of nominating someone whom one other board member believes “is a wonderful person” just is not good enough. These days, most people called to provide references are loath to communicate negative things especially in writing. However, some might be more open sharing useful information in response to oral conversations in which they are asked questions that relate to specific actions, e.g., “What role did ‘x’ play in your strategic planning process?” or “How was ‘x’ involved in your fundraising activities?”

  • A carefully designed board recruitment process looks something like this:
  • It is carried out by a Governance (or Nominations) committee of the board.
  • The committee looks at the strengths of the existing board and tries to identify gaps in skills, abilities and background that need to be filled.
  • A widely broadcast call for nominations is made highlighting the qualifications sought.
  • Those making nominations are asked informally to provide information on why their candidate(s) is suitable using the criteria in Table 8.
  • Those who are willing to act as references for the potential nominee should be asked how they perceive him/her in specific situations.

A short list of suitable nominees is created and ranked as strong, medium or weak candidates. Each person on the list would then be approached by the board chair in the order in which they are ranked.

The special problems of low profile organizations

Unfortunately, for a large number of worthy but low-profile organizations that support less popular causes, the problem of board composition is not one of how to choose among a range of possible candidates; rather it is to find enough people of any kind who meet the basic criteria of commitment to the organization’s mission and willingness to devote enough time and effort to the cause. This is a problem of recruitment, rather than selection. Solving it requires developing a focused, formal recruitment program for board members.

The usual method employed by successful nonprofits of this type is the “grow-your-own” approach. This is accomplished by concentrating on getting a lot of working volunteers to help with programs and projects. The best of these are then identified and systematically wooed and trained to accept increasing amounts of responsibility, including the leadership of others. Before long, those with skills and attitudes required on the board can be asked to join it (which, in these situations, is almost always a working board). In desperation, one can trust recruitment to the efforts of a few board members to pressure their friends to join, but don’t expect a very effective board as a result.

A final word on board composition

Though there are no hard and fast rules about how a board should be made up, there is probably one generalization that fits all voluntary organizations that are facing rapidly changing, often threatening, environments: strive for balanced diversity. The exact kind of mix will vary from situation to situation, but a mix it should be. Older, younger; men, women; rich, poor; “old hands,” “young blood”; business and non-business backgrounds; multi-ethnic and multi-racial—the criteria can vary. But only with a balanced mix can the organization improve its chances for getting the fresh ideas and specialized information it needs to cope with its changing world. Remember, however, that to make it all work, the board needs training in how to work together as a team and in how to discern the greater good of the organization as the basis for making all decisions.

Board Development

Even though boards may manage to find the ideal mix of skilled and committed people to become members, they may still end up losing some of them or having them perform ineffectively. This may be because members do not know what is expected of them, or lack the skill and knowledge needed to make good decisions in the governor role. The most direct way to deal with this problem is through a well-planned system of board orientation, development and evaluation (Brown, 2007, Brudney & Murray, 1998; Green & Gresinger, 1996; Herman, 2005; Herman & Renz, 1998, 1999; Herman, Renz & Heimovics, 1997; Holland & Jackson, 1998; Brudney & Nobbie, 2002). The components of such a system are:

A board manual which provides full background information on the organization and its articles of incorporation and by-laws, current programs and plans, descriptions of the position of board members, and outlines of the responsibilities of board officers and committees, and minutes of recent board meetings.

A formal orientation program at which new board members meet top management officials, tour facilities and hear presentations on the organization’s programs and background information on strategic issues. Also helpful here are informal “mentoring” programs, which pair new members with current members. A good mentoring program will “train the trainer” by providing the mentor with a checklist of topics to discuss and the necessary information to cover.

Periodic formal occasions at which the board assesses its own performance, for example by using Board Check-Up or questionnaires covering much the same topics as the content of this guide. Feedback from the management team and staff and stakeholders who interact with the board should also be obtained. Also useful in helping boards get a realistic picture of how they are doing is obtaining periodic feedback from key external stakeholders on how they view the board’s work. Differences in perceptions of board effectiveness between the board, staff and external stakeholders are often an indicator of a potentially harmful situation that should be addressed.

Finally, there is value in creating a “buddy system” for new board members in which individual existing board members with good knowledge of how the board and organization works are formally asked to mentor new members during their first year on the board.

There is also a need to assess the performance of individual board members with an eye toward continuous growth and effective support of the organization. This can be done by having board members self-assess their performance informally or through formal analysis of data collected from a questionnaire. It is remarkable how honest many are willing to be. However, attendance records and feedback from the Chair and Committee Heads can also be useful. The main problem is that assessing individual performance often feels like a very awkward thing to do because members are volunteers, have egos and a certain amount of prestige in the community. It is not impossible, however, if board members are shown when they join that there is a formal system of board self-evaluation and understand how the information obtained through it is to be used. This problem can be overcome if the culture of the board is understood to be one of support for each board member in order to help them contribute as best they can. Rather than identifying and concentrating on shortfalls, individual performance discussions can be opportunities to set goals for the coming year, identify areas of interest that the board member may want to expand on and new roles they may assume in order to help the organization prosper.

Table 9 contains additional useful information and resources to increase the governance effectiveness of the organization through board composition and development.

Table 9: Additional Board Composition and Development Resources

Topic

Country

Source Website

Board Composition and Diversity

U.S.A.

Board Source

https://www.boardsource.org/eweb/dynamicpage.aspx?webcode=Envision-Your-Ideal-Board

 

 

https://www.boardsource.org/eweb/DynamicPage.aspx?Site=bds2012&WebKey=5f1fc00a-9d38-4362-854b-61a0efe92325

 

 

Creating the Future

http://www.help4nonprofits.com/NP_Bd_Diversity_Art.htm

 

 

Blue Avocado

http://www.blueavocado.org/node/762

 

Britain

 

KnowHow NonProfit

http://knowhownonprofit.org/leadership/governance/governance-structure-and-roles/equality-and-diversity/?searchterm=board%20recruitment

 

 

http://knowhownonprofit.org/leadership/governance/improving-your-governance-practice/do-we-have-the-right-people-on-board

 

Australia

SVA Quarterly

http://knowhownonprofit.org/leadership/governance/improving-your-governance-practice/do-we-have-the-right-people-on-board

Board Recruitment

U.S.A.

Free Management Library

http://www.managementhelp.org/boards/recruit.htm

 

 

Board Source

https://www.boardsource.org/eweb/DynamicPage.aspx?Site=bds2012&WebKey=0a0a94b4-ccc1-4bc5-893f-8b9d5647c03f

 

 

https://www.boardsource.org/eweb/DynamicPage.aspx?webcode=Recruit-Board-Members

 

 

Bridgespan Goup

http://www.bridgespan.org/Publications-and-Tools/Hiring-Nonprofit-Leaders/Recruiting-Board-Members/Recruiting-and-Vetting-Nonprofit-Board-Members.aspx#.U2lHvfldW58

 

 

Guidestar

http://www.guidestar.org/rxa/news/articles/2012/board-recruitment-resources.aspx

 

 

Center on Public Skill Training

http://www.createthefuture.com/developing.htm