On February 16^th, 2022, at the webinar Serving on a Non-profit Board: Effective Governance, Richard Leblanc, Professor of Governance, Law & Ethics, York University, and Independent Advisor to Boards of Directors, shared insights on various aspects of the board governance framework with society and association leaders. We ended the session with an energetic Q&A with our audience. Here’s a roundup of questions asked on the day.

Q1. If you don’t have staff liaisons in certain committees, some committees tend to venture into areas that are not part of their charge, or work on initiatives that are not part of the strategic plan of the organization. What recommendations do you have so these committees don’t digress?

If you have a rogue committee, they are a function of the board and should have terms of reference. They should have a Chair that reports to the board on the progress of the committee. And the terms of reference for the committee are approved by the board. The board chair should step in and either disestablish the committee, with the consent of the board, or revise their terms of reference. The governance committee should look at the committee structure every year. When you create a committee, it takes on a life of its own if it never gets disestablished. There should be a sunset clause, to prevent that committee getting ahead of itself. In summary, committees are an organism of the board, and a governance committee should be responsible for any committee exceeding its remit.

Q2. What’s the rationale for not having staff present in certain situations?

It’s not particular to the staff, it doesn’t mean the board doesn’t trust or have confidence in staff. It’s best practice. Two weeks ago, I had a CEO from a non-profit organization, say ‘Professor Leblanc, I’m strongly opposed to leaving the room’. And you know, I’ve had to put my arm around peoples’ shoulders to get them out of the room and promote best practices. The rationale is, a mature Director of a not for profit will understand this is a best practice and will exhibit mature confidence by letting the board have a discussion. The last thing a controlling CEO wants to do is leave the room, because they lose control.

Q3. Is it appropriate for the board to see exit interviews, is there a conflict of interest when these are considered private as part of a personnel file?

You can offer to redact the information, but I have seen summaries that are very sanitized. The board has access to any information. If the board instructs you that they want to see the identity of the person, they can. I don’t think they should, but some boards do if they don’t want redaction and want to see the raw data. A board is entitled to access any information to fulfil its job. The same with committees. With exit interviews the boards do not want to see a summary, they want to know exactly why people are leaving. People might be leaving because of toxicity, a bad climate, or potential fraud. Things like this would be revealed in the exit interview. Don’t not conduct exit interviews.

Q4. Following on from the above. does that mean that board members are entitled to see staff personnel files? And if so, how do you reconcile state laws about privacy when it comes to those records?

You probably have a general council who will advise on how to appropriately redact or position a request from a board of directors. To directors in the audience, don’t ask for ‘the kitchen sink’, in the first instance. Ask for something more generic and look at it. If you don’t see any red flags, then there’s no need to press further. It can absolutely drive a management team crazy when you are asking for all sorts of information that’s operational in nature when there’s no objective reason in asking for it. Position your ask appropriately and reasonably when it comes to asking for non-routine information.

Q5. A lot of the members of our board serve on similar boards outside of our organization. Strategies discussed on our organizations board are being taken to outside boards. I’ve tried to address the situation several times without success. Do you have any suggestions on how to handle something like this?

Firstly, it’s totally inappropriate that confidential information that could be proprietary in nature and generating success is being shared with other boards. If you have Directors sitting on multiple boards, in the same sector, there should be a prohibition. It’s a conflict of interest and a complete breach of confidential information. A code of conduct should always be implemented, covering off confidentiality and conflict of interest. Directors need to sign off on that every year.

Q6. From a CEO, what if board members are thinking and focusing operationally, rather than on the strategic plan of the organization. How would you handle this?

I’m very sympathetic to this question, this can absolutely wreck a board. All it takes is one director who is micromanaging. What you don’t do is correct the person in open session. And don’t be defensive, don’t make an example of them and don’t approach them directly. Approach the board Chair, the board Chair then approaches the Director and has a session with them and discusses appropriateness of questions. The board Chair may even assign a mentor to the Director. Only approach the Director directly if you don’t have the support of the board Chair. Have an independent governance training session from time to time to focus on the divide between governance and management. Have a position description for the director, yourself, and the Chair of the board.

Q7. Following on from the above, what if the offending Director is the board Chair?

The chances are that the offending Director is a long serving board Chair, digging in, been there too long. You should have a Vice Chair or a governance committee. In the UK you have a Senior Independent Director. If the problem is with the board Chair, you have an assessment – a board assessment. I never mentioned this in the presentation, but boards have assessments every year or two. If there’s a problem with the board, there’s a problem with the board Chair! The governance committee should administer the board assessment. Part of that should specifically be about the performance of the Chair. Also, consider Chair term limits. I’ve seen 3 or 4 years as a term limit for board Chair. Also, be careful about your selection of board Chair. It’s not the person that wants it the most, it's not the person that puts their hand up. The person who is right for it, might not initially want it, they might be too busy. The governance committee should recruit talent and propose a board Chair.

Q8. When you think of non-profit boards that you work with, how have these board members ascended to their role? For example, are most senior individuals in their field or are you seeing an increase in early-career board members?

I’m seeing the latter, recruitment of younger Directors. And when you think about cyber security and the internet, the internet was invented in 1995. If you have top heavy Directors that are in their 60’s and early 70’s, they have not grown up with the internet. If you want someone with digitization competencies, that person by necessity is in their 30’s and 40’s. The advantage of term limits is you can bring a Director on in their 30’s and 40’s and you don’t have that Director for the next 30 years. You have them for 9 years, say. I’m seeing more diverse and younger Directors being bought on boards for very specific skillsets. They might not have run businesses as a CEO, but that’s not why they are there. They are there for their competencies and their expertise. They can hit the ground running and other Directors can learn from them. There’s no relationship between age and effectiveness. Create that matrix I talked about, where you’ve got a spread of age, geography, and skillsets. Use a competency matrix so you can bring rigour to Director recruitment. Talk to the CEO, ask them what skillsets they’d like to see on the board to take the organization to the next level.

Q9. If the Directors have the capability to elect their board members, how can you encourage them to differentiate with the Director types they are bringing in?

A good board will have four screens: independence, competency, behavior, and diversity. Can you marry those four screens with Directors? The answer is yes. Non-profit boards do this very well. They say to the membership, ‘Listen, we’ve done our analysis, no one knows the board better than the board’. Members don’t necessarily know the board; they might think they do. The board will conduct its screen, they then go out to the membership and say if you have these competencies please consider applying. It’s a Directors responsibility to replace themselves!

Q10. What are some common pitfalls you’ve observed from new board members, and how can these effectively be avoided?

The first one is micromanaging. Board members need to pull back, they aren’t in a management role anymore. As a board member your job is to ask questions. The second is not putting in the time to learn. You need to learn the strategy of the organization, put the time in to really understand the strategic plan, and by time, I mean 100 hours in your first year! The third is not speaking up. As a new Director you must speak up, don’t not ask your question. You don’t have to be difficult about it, you can ask an effective question in a nice way, it’s called disagreeing without being disagreeable.

Q11. Following on from the last question, although some traps and pitfalls are a bit universal, academic and corporation cultures/practices in the Global South tend to be different. How do you deal with situations in which a) the institution is in the South, with global profile and international board, OR b) institutions are in the North with boards composed of both Southern and Northern participants?

The three common pitfalls are relatively ubiquitous. I have limited exposure in South, what tends to happen there is, however, in my experience, they tend to manifest differently but the three issues are still there. I’d be careful about generalizing that boards are necessarily different; they may not be. We are really talking about human behaviour, and human dynamics. The interlocks might be different in terms of who the people are, and the history might be different. I’m hedging a bet here about boards not being different - I’m an expert in governance but I still don’t know everything!

Q12. Is there best practice on who should conduct board assessments – is it the board members or staff?

Ideally, it’s not the staff, as they are accountable to the board, although staff can take a supporting role. It should be the committee of the board. It should not be the board Chair due to conflict of interest. The group or the individual is normally the governance or the equivalent. They as part of their remit should have an annual board assessment. Conduct board assessments internally but mix it up with an independent third-party assessment occasionally. Also consider assessing individual directors, this is where the Chair comes in. Each director should produce a written professional development plan.

Q13. With directors on the various boards having varying interests and expertise, how do you know when there is too many standing committees? Do you have suggestions for sunsetting committees that are no longer relevant?

The rule of thumb is if your non-profit board size is 10-13 members, you should have a minimum of 3 and a maximum of 5 committees. The governance committee should have a look once a year, a cleansing. Have a sunset clause – if the committee is no longer fulfilling its purpose you’ve got to be ruthless. It’s not personal. The committee structure should match your strategies and your risk. Be creative, combine committees. This is not a science. What’s more important than the structure is that the responsibilities get done.

Q14. For many non-profits, publishers and other technology partners can manage and influence a large portion of the non-profit’s revenue. Can you share your vision for, or examples of, successful interactions between board members and their organizations primary vendors or partners (including potential vendors/partners)?

Yes, if you are on a board and talking about digitization, and by the way that should be on every board radar. For a non-profit I recently worked with, digital made up 20% and data 45% of their business model, so the world is changing. So, if you have Directors with digital expertise that have knowledge and access to platforms, including Wiley’s or other vendor platforms, a facilitated introduction can be an ambassador. You don’t want to reinvent the wheel, if you’ve got a proven relationship that can be leveraged to assist. Digital Directors on boards should mentor (not micromanage), the CIO or equivalent and make suggestions on digitization. This is where the movement is, in health, in education, in legal, it’s all about digitization. It includes artificial intelligence, virtual, augmented reality. This is the future. Boards need to be thinking up and out, not in the here and now. I’ve seen futurists come in to not-for-profit board rooms and they say ‘here’s how the industry will change in the next 5-10 years’. Think creatively as a board, and leverage relationships with staff.

Q15. From a CEO, how do you release non aggregated salary information without inviting the board to dig deeper into the operations of the organization and without angering the employees and staff members involved?

Use bands, don’t identify anybody. The reason the board is asking for pay structure, is that it used to be that the board had one employee – to hire, fire, and pay the CEO. And the CEO was all that the board was concerned with. Now, the board are concerned with risk-adjusted compensation – people being paid or incentivized incorrectly in the workplace is what the board needs to know about. To the CEO – it’s not that the pay is being micromanaged, it’s that the risks in regard to incentive pay are under control. That’s what the board is asking. It’s not necessary to identify everybody, and what their pay structure is, do it by strata or by bands.

If you missed the webinar, you can view the recording here.

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