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Are Nonprofit Boards Really Necessary?

Posted by Anne Wallestad, President & CEO, BoardSource on Oct 12, 2015 12:05:09 PM

essential-excepboardsBy Anne Wallestad, president & CEO, BoardSource

This past summer, I had an opportunity to attend a leadership intensive for nonprofit CEOs at Stanford University. For 10 days, 50 of my peers from organizations across the country and around the globe and I learned skills and strategies to help propel our organizations forward.

I expected it to be a truly amazing educational experience, and it didn’t disappoint. I — and BoardSource — will be benefiting from the time spent with some of the brightest minds in strategy, communications, and management for years to come. What I didn’t expect was my classmates’ interest in spending time with me: Early on, many asked if I could meet to talk about how to build a stronger relationship with their boards.

So I organized an informal dinner conversation one night and — much to my surprise — almost the entire group came. We pushed together tables, and they told of the board challenges they are facing around such issues as recruitment, fundraising, engagement, founder transitions, and boundaries. We talked for more than two hours. They shared their concerns and hopes, and, as a group, we offered each other advice and counsel. And then, toward the end of the conversation, someone asked this question:

“Don’t you think it’s time for a different model?”

I actually get asked this question all the time in my role at BoardSource, and have come to realize that — for at least some CEOs — it’s another way of saying, “Can’t we just get rid of boards? It would be so much easier for me to do my job without one.”

And it’s a somewhat understandable sentiment. The board — as a construct — is not without its challenges. It’s a body that, by design, is meant to bring together influential people with diverse opinions and perspectives. We ask them to bring their expertise and networks, but put aside their personal loyalties and position. And we ask them to tackle big questions of organizational strategy and sustainability and make decisions — as a collective, not as individuals.

There are a lot of dynamics and variables that can go wrong or get out of whack in that scenario. From the CEO’s perspective, that’s a challenging thing to manage — and an even more challenging thing to be managed by. Because, of course, for the CEO, the collective board — with all of those group dynamics and challenges — is also his or her boss.

A Gallup poll of more than 1 million workers found that the No. 1 reason people quit their jobs is because they had a bad relationship with their boss or immediate supervisor. So it should be no surprise that when asked by BoardSource to grade their boards’ support of them in their role as leader, almost a third of nonprofit CEOs give their boards a “C.” And that those chief executives who are unhappy with their boards are more than twice as likely to be making plans to leave their position.

And yet — despite these challenges — I am a staunch believer in the absolutely necessity of boards.

I believe that the end of boards would be the end of the nonprofit sector.

I know that sounds apocalyptic, but I really believe that it’s true. Without boards, the social sector would falter in ways that would irrevocably harm us, and would ultimately lead to our demise — maybe not instantly, but eventually.

Here’s why:

  • First, organizations would struggle to earn and keep the public’s trust. Another recently released Gallup study found that charities are among the most trusted institutions in our society, ranking higher than government, corporations, newspapers, banks, and even schools. But that trust is fragile, and, I believe, relies heavily on the idea that there is a group of people with shared accountability watching over the organization’s practices and working to prevent bad things from happening.
  • Second, organizations need strong leadership to succeed. Every organization needs a strong and effective leader. But the truth of the matter is, not every organization has one, and, when that’s the reality, it’s the board’s role to step in and either provide support or make a change. Without a board, ineffective leaders would remain in place indefinitely, leading to a growing number of organizations being poorly led and a slow decrease in the reputation, stature and, most importantly, the impact of the nonprofit sector.
  • And finally, surviving a CEO transition would be the exception, rather than the rule. Without a board, there would be no solid mechanism for finding an organization’s next leader, which would create a whole host of dysfunctions — employees hiring their bosses, CEOs appointing “heirs” to their leadership, or EDs simply walking off to leave the organization to fend for itself. Not to mention the fact that — without the stability of the board’s leadership and reputational capital — new leaders would face a tremendous uphill battle establishing credibility and securing the funding that the organization would need to succeed. And many organizations simply wouldn’t.

Some might say…so what? Isn’t it okay if organizations falter or fail? Won’t there be others that come up right behind them? Won’t it encourage organizations to build resiliency and strength in creative and innovative ways? And there’s some truth in all of that, without a doubt. We do suffer as a sector from too many organizations that aren’t built for resiliency and impact, and — as many have suggested — the sector might benefit from some thoughtful and strategic restructuring and consolidation.

But that leads me to perhaps the most important point: Failure in the nonprofit sector is a high-stakes venture. When a nonprofit organization goes under, it doesn’t just affect the people who lose their jobs. It leaves a void in services and a hole in its community. It means that the people who relied on that organization are even more vulnerable.

Can our communities survive one or two failures? Probably. But if we’re talking about large-scale destabilization of the nonprofit sector, what we’d really be talking about is large-scale destabilization of communities across the country. Hundreds of thousands of people who rely on nonprofit organizations for support and basic services would be without.

The nonprofit sector is too critical to our society and our communities to have a cavalier attitude about its sustainability and survival. And it’s too critical to abandon the very good idea requirement that each organization have a group of people who are bound and committed to the organization’s success in such a real way that they are willing to put their own financial, reputational, and social capital on the line.

That’s why we need boards. And that’s why we should be celebrating their commitment, rather than questioning their existence.

This post first appeared on the Huffington Post blog.



Topics: Perspectives on Board Service

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