Let’s Talk Charities and Not-For-Profit with Faye Wightman · Let’s Talk Charities and...
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Let’s Talk Charities and Not-For-Profit with Faye Wightman March 24, 2015
Transcript of Let’s Talk Charities and Not-For-Profit with Faye Wightman · Let’s Talk Charities and...
Let’s Talk Charities and Not-For-Profit with Faye Wightman
March 24, 2015
Governance
A presentation for Smythe Ratcliffe and
partners
Faye Wightman ICD.D
March 24th, 2015
Board Experience
Current:
Coast Capital Savings- corporate
BC Housing – Crown
UBC Alumni Association- non profit
QE Diamond Jubilee Scholarship- charity
Former:
Portland Hotel Society – past Interim Chair
Arts Club Theatre- director
Imagine Canada- past Chair
Community Foundations of Canada- past Chair
Emily Carr University of Art and Design
StreetoHome Foundation
BC Unclaimed Property Society
Staffing Boards
Vancouver Foundation – 15 Directors and 22 Honorary
Governors Council
University of Victoria Foundation – 10 directors
BC Children’s Hospital Foundation – 30 Directors and 25
Honorary Governors
SunnyHill Hospital and Health Center for Children – 12
Directors
Insights/Considerations from PHS
The real questions are:
Who is really running the organization?
Who is the Board accountable to? Is their role clear?
How aware is the Board about what is happening & how are they keeping themselves informed?
Is the structure of the organization correct? Are there policies in place to govern/operate & are they being followed?
Is the mandate clear? Are the strategies on achieving mandate clear?
What monitoring or data/measurements are being used to determine success of plan?
What is the true financial picture and how can it be determined?
How is the organization’s performance being reported to funders, members and key stakeholders?
OMG…where do we start???
Understanding what is being said is
key….
Some Typical Governance Based Problems
Rubber stamping or conversely micro-managing by Board
Distrust between members of Board and management
Information sharing – overload little discussion or
incorrect/little information poor decision making
Perception (or reality) that CEO controls the Board
Violation of, or no policies
Publicly perceived ethical crisis or outright reputational damage
Inability to attract talent & develop necessary leadership
Identifying & recruiting skilled, experienced Directors who
understand their role.
Range of Actual Board Behavior
where are you now?
Description
1 Rubber Stamping
2
3
4 Oversight but little control
5
6 Oversight, direction, control
7
8
9 Hands on- micro management
Passive
Active
Role of the Board
1. Establishing organizational identity & strategic direction
1. Mission, Vision, Values and Beliefs
2. Strategic Planning
2. Ensuring Necessary Resources & Effective Decision
Making
1. CEO (ED) Leadership- all aspects – recruiting, managing,
supporting, reviewing, compensating, succession planning
2. Adequate Financial Resources
3. Insurance & liability coverage
4. Public Image/Reputation
5. Sound Policy Development
6. Stakeholder relations
Role of the Board cont’d
3. Oversight
1. Management and Risk Oversight (including CEO
evaluation)
2. Financial
3. Program Monitoring & Evaluation
4. Legal & ethical compliance
5. Board Recruitment, Orientation, Continuous Education and
Evaluation(s)
1. Role of the Board: MVV& B
(it all starts here)
Passion for the mission- where does
it come from?
We generate it ourselves part of our value system & behaviors.
Find real personal meaning in the mission.
Become part of the organization; meet people who have benefited
Befriend a few clients & stay in touch to see what’s happening to them. Tell their stories- connect their success to the organization.
Have family or friends benefited from the organization or a similar one?
Talk to fellow directors & staff who have a personal dedication to the mission. Why are they involved?
While balanced budgets are important, the board can only make the
kind of tough fiduciary decisions that it needs to when the information
it has at hand is mission related.
Mission can seem incidental when there are so many other plates to
spin and challenges to contemplate
Passion for the mission is the beginning of great board involvement,
and no influence is as powerful as that of the chief executive.
Values & Beliefs Behavior
Beliefs
Behaviors
In a VUCA World ….is strategy necessary?
2. Role of the Board: strategic planning
Role of the Board: Strategic and Operating
planning.
“Eyes in, fingers out”
Strategic Plan drives the organization
Operating Plan -Goals: Objectives: Outcome; Metrics,
Milestones.
Performance reviews based on achievement of these plans
As Board- how do you ensure it’s being implemented?
3. Role of the Board: Monitoring: What pieces are needed to consider?
Use of Dashboards to monitor
Two examples: Traffic Light report
Project/ Initiative/ Policy Description
[Description of Agenda Item ]
Issue and Action Requested (Rationale for being on Agenda)
[Description of issue and action requested – approval, information, discussion, etc.]
Summary & Key Points
[Background information and key notes]
Risks, Challenges, Opportunities (IF APPLICABLE)
Risks: Challenges: Opportunities:
Supplementary Document Appended
[Attach and list supporting documents]
Prepared by:
4. Role of the Board: Ensuring
Necessary Resources- Leadership
4. Role of Board: Working with
Management
Board working with Management
Goal
Enhance executive decision-making for better performance
Method
Actively question & monitor management to obtain key information necessary to judge if they are performing effectively. (don’t need to know every detail)
Ask questions to get reasonable assurance that management’s proposal is plausible or reject with cause and explain
The Board-Management Relationship
Board’s Role Management’s Role
Select, evaluate & support
the CEO
-Run organization in line with Board direction
-Keep Board educated & informed
-Seek Board’s counsel
Approve high-level goals & policies -Recommend goals & policies, supported by
background information
Make major decisions -Frame decisions in the context of the mission
& strategic vision, and bring Board well-
documented recommendations.
Oversee management and organizational
performance
-Bring Board timely information in concise,
contextual, or comparative formats.
-Communicate with candor & transparency
-Be responsive to requests for additional
information
Act as external advocates and diplomats in public
policy, member/stakeholder and community
relations
-Keep Board informed, bring recommendations,
and mobilize Board to leverage their external
connections to support organization
4. Role of Board with the CEO:
Constructive partnerships CEO
Is displacing Board
GOVERNANCE AS
OBSERVATION
CEO Is in constructive
partnership with Board
GOVERNANCE AS
LEADERSHIP
CEO Is going through the
motions with Board
GOVERNANCE AS
ATTENDANCE
CEO Is displaced by Board
GOVERNANCE AS
MICROMANAGEMENT
Board Engagement
CE
O E
ngagem
ent
Role of the Board:
Board/CEO Partnership
Collaboration & support- think doubles tennis!
Role of the Board: CEO/ED
Evaluation
5. Role of the Board: Ensuring
Necessary Financial Resources
6. Role of the Board in Risk:
Liability and Insurance
7. Role of the Board: Ensuring
Public Image/Reputation protected
Role of the Board: Ensuring Public
Image/Reputation protected
Reputation is one of an organization’s most valuable assets
Managing risk is board AND managements role
Know who your stakeholders are- ensures there’s a strategy for
regular & effective communication & consultation
Develop key messages, Q&A’s & everyone say the same thing
CEO - media spokesperson; sometimes may need President
Whistleblower policy – early detection
Confidentiality
Confidentiality- “There are no secrets in the
world, and everyone will eventually find out
everything” Jack Welch “Winning” Harper
Business 2005
8. Role of the Board: Sound policy
development.
Levels of action
Policies General management
Statements
Procedures Step by step instructions
Resolutions Written specific
Decisions by Board
Guidelines Suggestions for Best
practice
Standards Program for Canada’s
Charities and Nonprofits
+ Five Areas
There are 73 standards in 5 key areas:
1. Board Governance (24)
2. Financial Accountability (13)
3. Fundraising (14)
4. Staff Management (13)
5. Volunteer Involvement (9)
+ Three Levels
Level
1
Organizations with up to 5 FTE employees and up to
$2 million in annual expenses.1
Level
2
Organizations with up to 50 FTE employees and up
to $10 million in annual expenses.2
Level
3
Organizations with more than 50 FTE employees or
over $10 million in annual expenses.
1 Organizations with no staff are exempt from the Staff Management
Standards. 2 Excluding organizations that meet the criteria for Level 1.
Application Preparation
and Submission
Organization submits
Participation Agreement and
Application Fee.
Organization completes
self-assessment and online
application, accessing
support from Standards
Program staff as needed.
Organization submits
application & supporting
documentation for review.
Application Review
Standards staff
review applicatio
n to determine readiness for peer review
Decision Process
Three peer reviewers review each application and then the peer review
panel meets to make accreditation decisions.
Four possible outcomes:
1. Accreditation
2. Conditional Accreditation
3. Revise & Resubmit
4. Non-accreditation
Outcome communicated to applicant and follow-up work completed as
required.
Compliance Process
Accredited organization
s submit compliance information
annually
Compliance will also be monitored through
annual spot checks/audits of 3-5% of
organizations
Renewal
Mid-way through the accreditatio
n period, accredited organizatio
ns begin preparing
for the next cycle
Phase 1
APPLICATION
PREPARATION
PROCESS 6 – 12 months
Phase 2
APPLICATION REVIEW &
APPROVAL PROCESS Approx. 6 months
Accreditation Process
Phase 3
COMPLIANCE &
RENEWAL PROCESS 5 YEARS
9. Role of Board: Stakeholder
relations
CEO relationship; Board as partner, manager & supporter
Boards role with senior management & staff – what’s
expected?
Stakeholders- who are they? What is your role? What are their
expectations of you as a board? Customer/donor survey?
Whose role is maintaining relationship with external funders
and government?
Who has the best relationship with them?
Stakeholder relations: Building trust
Transparency – a practiced value
Mistakes – a way of learning
Culture celebrates creativity
Open, direct, collegial, fearless dialogue
Genuine collaboration
Credit is shared – abundantly
High accountability
Vitality/energy – you can feel it…
10. Role of the Board: Board
Recruitment, Education & Evaluation
Recruitment- what do you need & how do you find them?
Orientation- what’s needed; is it really required?
Policies and Practices- what’s needed; who develops them?
Committees, Sub-Cttees, Advisory Cttees, Task Forces –
what’s needed & what is the difference between them? How do
they get supported? When do they end?
Evaluations- key to good governance. Decide who is
responsible for ensuring it happens and then do something with
the results. Whole board & Individual directors (to start with)
Role of the Board: Orientation
Without the proper training,
mentoring and guidance, even
the most highly accomplished
board members can find
themselves lost and
overwhelmed.
Orientation best thinking &
contributions.
Board Evaluation(s)
Board Evaluations- individual, the
board as a whole; peer evaluation
What Makes Great Boards Great:
“ It’s not rules & regulations. It’s the way people work
together”
J. Sonnenfeld in HBR Sept 2002
11. Role of the Board: Oversight/Ethics:
Independent mindedness
Conflict of Interest/ influencing
Challenging respectfully
Cognitive blinders
◦ failure to see information
◦ failure to seek information
◦ failure to use information
◦ failure to share information
Ethos of transparency
Not invested in the decision…
Social Enterprise…know what you
are getting into….& get expertise
PHS…21 related entities
Bugs Be Gone
Unity Housing Society (“Unity Housing”);
Portland Café
The Window
Blue Shell Cleaning
Hastings Folk Garden Society (“Hastings Garden”)
Blue Shell Laundry
Interurban Community Artistic Society (“Interurban Society”)
East Van Roasters
Washington Store
Portland Clinic
DTES Maintenance and Construction Ltd.
Our Community Security Ltd. Our Community Thrift & Vintage Ltd. (“Community Thrift”);
…behind every nonprofit there is a board,
usually made up of successful accomplished
community leaders, united in a common goal:
they are passionate about doing good by
governing…the organization at hand.
Edgar Stoesz
Retired Chair, Habitat for Humanity International
Doing Good Even Better: How to be an Effective
Board Member
© 2015 Smythe Ratcliffe LLP is a member firm of the PKF International Limited and PKF North America networks of legally independent member firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. All rights reserved. 54
Anita Johnson, Partner
Smythe Ratcliffe LLP
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Renee Martin, Partner
Smythe Ratcliffe LLP
604 694 7510
Contact Smythe Ratcliffe LLP
Gary Luedke, Partner
Smythe Ratcliffe LLP
604 694 7509
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