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Stanford Survey: The Good, Bad and Ugly of Nonprofit Boards

Posted by Leslie Murphy, FASAE, CAE on Jul 29, 2015 12:00:00 PM

leadershipAs someone who has collaborated and consulted with hundreds of nonprofit board members over the years, I’ve had the privilege of working with some truly great ones.

But I’ve also encountered some who had trouble hitting their stride. It wasn’t that they didn’t care about their organization’s mission or their obligations as a board member—rather, they simply didn’t have access to the needed skills or experience to truly make an impact.

The Stanford University Graduate School of Business recently released its 2015 report summarizing survey data from 924 directors of nonprofit organizations. What does the data reveal? Most boards could make substantial improvements. Here are two key takeaways.

  1. The experience level of many board members isn’t sufficient to meet the needs of the organizations they serve. About 65 percent say their fellow members lack experience and 48 percent find they are only moderately, slightly or not at all engaged. Nearly one-third are “dissatisfied with the board’s ability to evaluate organizational performance.” More than 25 percent don’t have a “deep understanding of the mission and strategy of their organization.”
  2. More than 30 percent are unsatisfied with their board’s ability to evaluate organizational performance. More than nine percent report they regularly review performance data but they aren’t “comfortable with the quality of that data.” In fact, 46 percent are not confident the data they see “fully and accurately measures the success of their organization” and 57 percent of nonprofit boards don’t benchmark their performance to that of similar organizations.

The Stanford team also reported other findings about nonprofit boards:

  • 29 percent have experienced serious financial difficulties.
  • 36 percent never evaluate their performance.
  • 42 percent do not have an audit committee to monitor their financials.
  • 49 percent say they have not met their fundraising goals.
  • 69 percent do not have succession plans and 78 percent could not immediately name a successor if their current executive director or CEO were to leave.

So what is the good news?

The clear majority of board members (87 percent) are satisfied with the performance of their executive directors or CEOs and a nearly equal number (85 percent) are “moderately or very satisfied with the performance of their organizations.”

When it comes to the structure of the board itself, 52 percent say their organization has a “board within a board” (of these, 67 percent are a formal executive committee and 33 percent are an informal group). Among those with this structure, 74 percent say it improves their functionality and decision-making.

Does your association have these types of challenges? If so, consider spending some time discussing:

  • What can you do to attract board members who have the experience, depth and knowledge to develop sound business and governance practices that will advance your association’s mission? 
  • What barriers does your board/association need to overcome to attract leaders for today and the future?
  • What competencies does a board member need to possess (besides just saying “yes”)?
  • What should your board use to measure their performance?

Then create an action plan to make positive change. It takes time, but building a board that has the collective will to make a differencestarting todayis the first step.

Topics: Board of Directors, Leadership, Nonprofit Boards

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