Boardroom Insights for Maximizing Board Effectiveness

Know What Type of Board of Directors You Serve

Is your board heavily involved in the organization’s day-to-day operation? Does it provide oversight via policy-making? Or is your organization in a position where you need to make big changes? You need to identify which situation best describes yours, and govern accordingly.

Familiarize Yourself With ISO 37000 Guidance

ISO 37000, the international benchmark for board governance, spells out the activities each board should undertake. Boards should use these standards as a guide for how best to approach governance. They include concepts as simple as purpose and as complex as risk anticipation and tolerance.

Be Mindful of Other Best Governance Practices

Don’t rely solely on ISO guidance. Consider other factors that drive good governance. These include, but are not limited to, digital communication, proper use of executive sessions, boardroom layout, evaluating meetings after they’re complete, and social time to learn more about fellow directors.

Webinar Recap: James C. Galvin, author and president of Galvin & Associates, explores how to improve board meetings and empower boards to reach their potential.

The board of directors plays an essential role in the success of an organization. But often, boards aren’t as effective as they could be.

In fact, OnBoard’s 2024 Boardroom Insights Survey found that 17% of board members are ineffective in their roles. If a typical nonprofit board has between 16-17 members, that means at least two to three members are ineffective.

James C. Galvin, President of Galvin & Associates and Author of Maximizing Board Effectiveness (among other titles) thinks the problem is even larger than the numbers indicate.

“Not many people would say the board is achieving its full potential,” he said. “There are always board members who aren’t harming the organization, but they’re also not adding value.”

How can a board overcome challenges and maximize the effectiveness of its directors? Recently, Galvin joined us for discussion on how to confidently steer your board toward maximizing its contribution to the organization. He shared practical guidance to help directors:

Determine what type of board you serve: managing, governing, or navigating
Bolster board effectiveness, regardless of your position

Identify and eliminate board dysfunction

Here, we share some of the top takeaways from this compelling session.

There’s A Lot of Confusion Around Governance

People think they know what it means to be asked to join a board of directors. But the reality is, there’s a lot of confusion around governance.

“A lot of the literature on governance is contradictory,” Galvin said. “Some say boards should be policy-based. Some say there’s a lot more to governance than writing policies.”

There’s also a lot of confusion about when boards should take action – or stay out of the way.

“It’s hard for board members to know how to add value without getting in the way,” Gavlin said. “As a board, if you don’t want to ruin your own organization, you have to know when to stay out of the way, which hopefully, is most of the time.”

This lack of clarity often stands in the way of a board being as effective as it could be.

It’s Important to Know Your Board Type

According to Galvin, there are 3 types of boards. It’s important for directors to identify which type of board they currently have – and which type their organization actually needs.

The 3 types of boards he explored are:

1. Managing Boards

Managing boards are involved in the day-to-day management of an organization. “They open the lid on the black box and look inside at everything that’s happening and offer suggestions for improvement or – worse – stick their hand in the box and start moving things around,” explained Galvin.

“You have to be a managing board if you have a leader who can’t handle it,” said Gavlin. “50% of nonprofits – especially smaller ones – ought to be managing boards because they don’t have a leader that can make a governing board work.”

Managing boards are responsible for making decisions. However, they must avoid micromanagement.

2. Governing boards

Rather than becoming involved in day-to-day operations, governing boards provide oversight – often, by developing policies. “Policies are like frozen decisions,” Galvin explained.

Galvin gave an example of an independent hospital board. “The only qualification they have is that they’ve been to the doctor,” he said. “Their job is to develop a hospital manual…not get involved in operations. They don’t have the qualifications to do this.”

Governing boards are also responsible for looking at resources and results to determine if the organization is adding value to people’s lives.

Galvin cautions that governing boards should avoid “microgoverning.” “It’s either not doing anything, not paying attention, or it’s getting so fixated on the policies that you become policy nerds,” he explained. “Your policies aren’t as important as the performance of the organization.”

3. Navigating boards

When an organization is not going to survive – or if it’s becoming ineffective, changes need to happen. According to Galvin, a navigating board is responsible for “changing the organization to adapt to the changes you’re facing.”

“You need to transform the organization in some way by making changes or changing the context in which you operate.”

Galvin gave an example of an orphanage in the 1950s that was receiving a lot of support. When the state made the switch from institutionalizing children to foster care, the navigating board was responsible for helping the organization adapt.

Galvin cautions that “navigating mode done poorly is status quo governance.” “You can’t try to keep everything the same in a changing context,” he said.

Governance Standards Provide Guidance to Boards

There is a lot of confusion about governance. But today, “there’s an international standard for that.” ISO 37000 – finalized in 2021 – provides standards for board governance.

ISO 37000 spells out the activities of the board, which include:

Purpose: Keeping the organization on purpose, on task, and to prevent mission drift.
Value generation: Determining how you are going to add value to what audiences. “For example, there are a variety of ways to help people with diabetes,” said Galvin. “What is the way you’re going to provide value?
Strategy: The board must strategically think about the organization.
Oversight: Boards must monitor what’s happening in the organization, pay attention, and be prepared.
Accountability: The board is responsible for holding leadership accountable.
Stakeholder engagement: According to Galvin, this is more important in some organizations than others.
Leadership: This involves asking key questions without inserting yourself into operations. “If you’re growing, spot the growing pains and capacity limits and start asking questions about those,” said Galvin.
Data and decisions: Boards should foster a data-informed culture, not a data-driven culture. “A rough measure is better than no measure at all,” said Galvin.
Risk governance: Boards must think about what can go wrong and ask leadership what they’re doing to mitigate it.
Social responsibility: Directors must consider if their organizations are making the community a better place to live.
Viability and performance over time: Boards must consider whether they’re doing the right thing, staying on mission, and establishing funding that’s stable.

These activities comprise good governance. With good governance, boards can maximize impact. “The outputs of good governance are responsible stewardship, effective performance, and ethical behavior,” said Galvin.

Best Practices Can Increase Board Effectiveness

Galvin advised directors to “rob, pillage, and steal best practices from other boards.” Adopting best practices can help improve the effectiveness of your own board. Galvin shared several best practices during the session, including the following:

Communicate digitally. Avoid bringing new, hard copies during meetings. Email eliminates the cost of postage, and it helps ensure board directors come to meetings prepared. “Now, you can do all the reading ahead of time,” he said.
Leverage dashboards: A dashboard of key indicators communicates numerical data quickly. “You can tell at a glance what’s happening,” explained Galvin.
Use staying committees sparingly. “If it works for you to have them, fine,” said Galvin. Otherwise, do committee work on an ad hoc basis. It’s a more efficient way to work.
Begin and end each meeting with an executive session. This is where all staff and the organizational leader are outside before and after the board meeting. “This prevents the ‘parking lot’ meeting after the meeting and the ‘coffee shop’ meeting before the meeting,” said Galvin. “In addition, if there are any concerns about the leader’s performance, directors can voice those freely without causing embarrassment.”
Consider a special auxiliary group. This provides a variety of benefits, including a pipeline. “It’s a way to get to know potential future board members,” said Galvin.
Think beyond the traditional board table. Galvin urged attendees to pay attention to room dynamics and create a space that keeps people relatively close together, such as a horseshoe or circle configuration.
Use hand signals. These can keep discussions on track during board meetings. “It’s very helpful for larger boards and boards that have people who can’t resist micromanaging,” said Galvin.
Conduct a process check at the end of every board meeting. “Ask yourselves, “Did we stay out of staff work and stick to board work? Did we focus on the future or stay stuck in the past?’”
Include “hang time”: Give directors opportunities to get to know each other. “It’ll be far easier to work together as a team if you’ve taken the time to build relationships,” said Galvin.
Use a web survey service to gather opinions. Surveying staff, board members, donors, or other stakeholders can help you get a feel for how things are going. But Galvin advised that board members must “avoid intervening in operations.”

The business world is evolving at breakneck speed. Are you looking to develop agile leaders, boards, and organizations that are ready to navigate constant change? Then save your spot for Change Management for Boards & Their Directors on May 30, featuring Debbie McCarthy, Vice President of Advisory Services at Prosci.

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