RULES
FOR A FIRST BOARD
July
2007
Q:
Terrie, I need to pick your brain. Our fledging organization
is forming its first board after 3 years of working
without one. Four of us founded the organization and
we have all shared in the day to day responsibilities,
serving in different capacities to get the organization
off the ground. Our first task is to name a president
and chief executive. We want to keep duty and loyalty
to the organization a priority so we are looking for
some basic guidelines for setting up either bylaws or
rules that will hold these individuals accountable and
avoid conflicts of interest. Based on what we’ve
been reading, we have broken all the rules to date,
so your advice is critical. Thanks.
A:
Congratulations on taking this step and on your desire
to do it correctly. While you may first be forming a
board three years into the organization’s life,
the concerns you express show a level of sophistication
that many organizations older than yours do not possess.
This bodes well for your future.
I
would start by creating job descriptions for both positions.
Begin by determining how you will differentiate the
responsibilities of each position and then think through
the characteristics and skills that will be required
of each. These should be in line with your organizational
vision and values. For instance, if you are a grass-roots
organization you must have people who believe in hearing
the community’s voices and understand how to capture
them. Don’t merely consider those attributes already
represented by those currently involved in the organization.
And, don’t limit your thinking to today’s
needs. You want the “right” people and these
must be people who have the capability to move your
organization beyond where it is currently.
Once
you have the people in place, ask them each to create
a list of specific goals congruent with the organization’s
vision to which they will be personally responsible
for achieving within the next year. Get the board to
sign off on both the CEO and president’s lists.
It wouldn’t hurt to have each director on the
board list several personal goals as well. Build in
an evaluation period at least quarterly to discuss where
each is in the pursuit of his or her goals. You may
have to tweak the goals some as the year unfolds, but
this quarterly discussion will communicate an organizational
commitment to accountability and ensure everyone’s
efforts remain on track.
The
only concern that you raised that must be dealt with
in the bylaws is the conflict of interest issue. EVERY
member of the board and staff should sign a conflict
of interest disclosure form annually. If you go to http://www.corestrategies4nonprofits.com/tips/7.html
you will find what belongs in such a form.
While
not required, I would also include in your bylaws a
statement requiring adherence to the duty of loyalty.
The duty of loyalty refers to making decisions that
benefit the organization, not individuals – which
is what your conflict of interest disclosure form will
help ensure. However, when writing that section, you
might also want to cover the concept of loyalty to the
community. In cases where loyalty to the organization
could result in potentially harming the community, the
community’s interests should supersede the organization’s.
Enron was a tragic example of where decisions were made
to benefit the organization over the community.
