The Right People in the Right Places CTA Board Recruitment Tips USTA Community Development Workshop 2012October 27, 2012

Learning Objectives• Basics of recruiting new board members and the

importance of considering potential nontraditional board members• How to conduct a board recruitment campaign• Basics of board management • Why Director’s & Officers Insurance is a deal

breaker for most potential board members

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Disclaimers• I’m NOT an attorney• I’m NOT an accountant• I’m NOT an insurance broker• IRS and Texas Secretary of State’s office regulates all

nonprofits the same way, large and small.• The information provided is for all nonprofits,

whether you have a staff or are all volunteers

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Just the Facts• Board recruitment is a year-round process• Boards should be diverse and reflect the

community they represent• Nonprofit board members should never be paid

or compensated for their involvement• Term limits for board members are a good thing!• Identify nonvoting members of the board

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Just the Facts• The board meeting minutes are the historical

and legal record of your organization. They are public records and as such you may have to provide them upon request.• A nonprofit board must consist of 3 (hopefully

not related) individuals. There is no maximum but more than 25 is challenging.• The only required positions are: President and

Secretary.• Every board is a fundraising board.

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Board Recruitment

Steps for Successful Board Recruitment• Year-round process• Clarify board’s ultimate recruitment needs• Identify and appreciate what your current board• Consider needs that build future capacity• Recognize and value diversity in all its forms• Identify your current recruitment goals

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Steps for Successful Board Recruitment• Cast a wide net in making your recruitment

needs known• Don’t ignore the “home team” (current

stakeholders)• Cultivate your prospects• Have a plan for supporting board members once

they say yes!

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Before You Start RecruitingConsider a potential board member and answer if

you were them:

• Why should I be on your board?• Consider what is in it for me? • What do I want? • What do I need?• How will I benefit by being on your board?• Why do you want me as a board member?

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Build Future Capacity• What capacities do you need to move you closer to

your vision and mission?• What new connections do you need to build?• Who will help you avoid falling into the same

routines?• What new expertise will you require to expand your

reach in significant ways?

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Board Recruitment Cycle• Develop a Strong Nominating Committee▫ Standing committee of the Board.▫ Chaired by president-elect, past president, or seasoned

member.▫ Executive Director serves as advisory member.• Identify Prospective Board Members▫ Go beyond friends/colleagues of current board

members▫ Attend board recruitment fairs▫ Use volunteer recruitment tools▫ Recruit from other nonprofit boards▫ Develop a recruitment grid

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Board Recruitment Grid• Matrix▫ What values are we looking for?▫ What skills or expertise do we need?▫ What kind of commitment do we expect?▫ What connections to stakeholders do we want?▫ What kind of relationship should they have with our

organization?• Consider▫ “Must haves”▫ “Would be nices”▫ “Never in a million years” *• Order Hildy’s Board Recruitment & Orientation: A Step-by-Step, Common Sense Guide

http://managementhelp.org/boards/recruitment-grid.htm

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Board Recruitment Cycle• Cultivate Prospective Board Members▫ Invite them to

events/meetings/committees/volunteer projects▫ Let’s do lunch!▫ Do your research – Google, LinkedIn, References• Invitation Process▫ Ensure consistent message about expectations, roles

and responsibilities▫ Provide a board recruitment packet

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Board Recruitment Packet• Recruitment Packet Information:▫ Time requirements in detail.▫ Talent – serve on Board committees/volunteer

opportunities.▫ Treasure – make annual contribution.▫ Roster, annual report, financials.▫ Do not bait and switch!

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Board Recruitment PacketJob Description▫ Title, Reports to, Role, Term.▫ Time Expectations: attend all board meetings,

participate actively in a committee, attend retreats, special events, etc.

▫ Obligations: Support the mission, make annual contribution, monitor financial performance, develop strategic direction, ensure regulatory requirements are met, advocate for the organization, abide by the duties of care, loyalty and honesty, etc.

▫ Be Specific!

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Activity: Assess Your Current Board• Review and answer the matrix questions• Consider what are “must haves”, “would be nices”,

“not in a million years”• Identify at least one “must have” in each category• Use board assessment grid* evaluate your current

board members on a scale of 1-5 (1 being poor, 5 being great) based on this “must have”.• This activity:▫ Recognizes and articulates the contributions of your

current board▫ Gives them an opportunity to discover new talents

that exist but are not being utilized▫ Spotlights recruitment needs▫ * http://managementhelp.org/boards/recruitment-grid.htm

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Sustainability• Financial Oversight▫ Every board member should have the ability to review

the financial documents.▫ Direct board members to classes on financial

oversight. “I do not do numbers is not an excuse”.

• Fundraising▫ This is the new normal.▫ Make fundraising less scary. Provide classes on

raising funds.▫ New methods of fundraising - friendraising

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Recognize and Value Diversity• Diversity is more than demographics• Consider all variables in diversity▫ Race, culture▫ Economic▫ Education, background▫ Age, gender• Avoid tokenism▫ If you are inviting an individual to join your board,

you are affirming that he/she meets the “must haves”

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Cast a Wide Net• Host a board brainstorm session to identify the

“perfect” board member! - Review your matrix “must have’s”- May help to draw a picture of this board member.

Where are they now? What do they read? Where do they live? Where do they work?

• Consider recruiting at:- Civic clubs (Toastmasters!)- Schools and high education institutions- Other nonprofits- Leadership development groups

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Don’t Ignore the Home Team• Consider recruiting board members from your

current volunteers• Use your volunteers to identify potential new

board members• First and foremost, remember board members

are volunteers• Board members should follow same procedures

as volunteers (i.e. application, background check etc.)

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Your Board Chair• Leader of the board• Runs the board meetings, sets the agenda• Should be strongest advocate for your

organization• Liaison between staff and board members• Holds board members accountable• Best scenario: Chair-elect (one year), Chair of

the board (one year), Parliamentarian (one year)• Caution: This position can make/break your

board.

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Voting Process• Quorum ▫ 1/3 of the board members, allows for a small group to

make decisions▫ 2/3 of the board members, may be required for major

decisions• Simple Majority Vote▫ Chair requests a voice vote, declaring his/her sense of

the majority subject to objection or asks for a show of hands

▫ Note: Even when outcome is inevitable, Chair should avoid hurrying the process

• Supermajority Vote▫ These are for major decisions and require a 2/3 or ¾ vote

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Voting Process• Consensus▫ Not synonymous with “unanimous decision” or

“compromise”▫ Usually a long and tedious process which is highly

facilitated with all participants feeling in the end that they can live with the decision.

▫ After adequate discussion, Chair may ask “Is there consensus?”

• Unanimity Only▫ Usually based on the culture of the organization,

rarely works well

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Voting Process• Open Voting vs. Secret Voting▫ Open Voting Positives – over the long run can create

trust▫ Open Voting Negatives – peer pressure may sway

some votes▫ Exception would be choosing board officers, this

should always be done by secret ballot.

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Board Management

Board Orientation• Orientation Required for New Board Members▫ Review governance and fiduciary duties.▫ Review the budget and financials (Form 990).▫ Review the strategic plan.▫ Review mission, vision and core values.▫ Review policies and procedures.▫ Review and sign conflict of interest.▫ Review elevator speech, marketing plan, bullet points.

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New Board Member Packet• The following should be provided to every new

board member:▫ By-Laws▫ Articles of Incorporation▫ Policies and Procedures▫ Internet posting policy▫ Yearly financials▫ Organizational chart▫ Conflict of Interest Statement (signed)▫ Minutes from previous board meetings (optional)

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Board Retreats• Annual Planning Retreat▫ Review mission, vision, core values.▫ Assess current plan.▫ Long term vision = 12 month plan of work.▫ Focus forward, build consensus.▫ Develop action plans with accountability and time

lines for achievement.▫ Team building and fun!

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Keep the Plan Alive• Keep the Annual Plan Alive▫ Written reports at every meeting.▫ Progress within goals.▫ Issues requiring Board action or discussion with

documentation.

Committees• Establish Effective Committees▫ What is required to achieve the annual plan of work?▫ Action plans shared with full board.▫ Assess progress at every meeting.▫ Sunsets, (i.e. when does the committee dissolve?)

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Term Limits• Keep the Right People on the Board▫ Term Limits.▫ Average is 3 yrs, renewable once.▫ Retire to Advisory or Emeritus status.

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Commitment• Board Commitment Letter▫ Restate job description.▫ Sign annually.▫ Make financial commitment.▫ Escape clause: I agree that if, at any time, I am unable to

fulfill the commitments as a member of the board of directors, I will give notice of my resignation to the president of the board.

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Manage Meetings• Hold Effective Meetings▫ Send agenda at least three days before a meeting and

include: Minutes from previous meeting Current financials Requests for reports

▫ Delegate committee work to committees.▫ Use Robert’s Rules.▫ Stick to the agenda.▫ Begin and end on time!

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Bless and Release• Deal with Unproductive Board Members▫ You get what you accept and what you reward!▫ Term limits.▫ Commitment letters.▫ Keep performance expectations high.

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Board Evaluation• Annual Board Evaluation▫ Assess individual member performance.▫ Assess full board performance.▫ Assess governance performance.▫ Assess fiscal management.▫ Assess personnel management.▫ Assess board administrative management.▫ Use as tool for strategic planning/board recruitment▫ Tool: Exploration – Management by Assessment. Visit

www.socialenterpriseventures.com

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Support Your Board Members• Hold an Annual Board Orientation• Annual Planning Retreat• Keep the Annual Plan Alive• Establish Effective Committees• Keep the Right People on the Board• Board Commitment Letter• Hold Effective Meetings• Deal with Unproductive Board Members• Conduct an Annual Board Evaluation

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Nonprofit Insurance

Directors and Officer Insurance• Directors and Officers/Employment Practices

Liability▫ Not all policies include volunteers so the insured will

need to read policy to see who is covered. Endorsements to a policy can also add or delete coverage so these need to be read as well.

• Examples of claims under D&O:▫ Employment-related issues such as discrimination,

harassment, and wrongful termination.▫ Failure to provide services.▫ Mismanagement of assets.▫ D&O does not pay for bodily injury or property

damage. You buy auto insurance, workers' compensation, and general liability for such claims.

Nonprofit Insurance• General Liability Coverage▫ This is different then D&O/EPL coverage and again

the definition of who is an insured and the exclusions apply will read different from each carrier. If it is written with a true nonprofit program volunteers are normally always included as insured's while working for the nonprofit.

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Nonprofit Insurance• Workers Compensation for Volunteers▫ Under the normal workers comp policy volunteers are

not included unless they are reported to the carrier and a class code is applied to the policy. The premium charged is based on minimum earned payroll regardless if the volunteers are paid. This is the only way the volunteers will have coverage if they are injured or become ill because of the work they are doing for the nonprofit.

▫ If a volunteer is injured on the job they would have to sue the nonprofit under the general liability policy for compensation. This brings us back to the wording of who is an insured and exclusions listed on the general liability policy to see if there is coverage.

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Nonprofit Resources

Resources for Board Governance• Nonprofit Board Evaluation -

http://www.managementhelp.org/org_eval/uw_brd.htm

• Texas C-Bar Legal Compliance Checklist for 501(c)(3) Nonprofit Organizationshttp://www.texascbar.org/legal_library/nonprofit_management/legal_requirements.php

• Director’s and Officers Insurance http://www.tano.org/insurance/frost/

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Resources for Legal Requirements• Checklist for an Assessment of Legal Activities

in U.S. Nonprofit Organizations -http://www.managementhelp.org/org_eval/uw_legal.htm

• Reporting and Filing Requirementshttp://www.texascbar.org/legal_library/nonprofit_management/legal_re

quirements.php

• Texas Secretary of State http://www.sos.state.tx.us/corp/nonprofit_org.shtml

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Resources for Advocacy Information

• The Powerful, Free, and Easy 501(h) Election: Benefits Galore! http://www.councilofnonprofits.org/nonprofit-advocacy/501h-election

• Lobbying Rules for 501(c)(3)s http://www.independentsector.org/lobbying_rules

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Nonprofit Favorites• Chronicle of Philanthropy - www.philanthropy.com• Nonprofit Quarterly - www.nonprofitquarterly.org• Blue Avocado – www.blueavocado.org• BoardSource - www.boardsource.org• Idealware – www.idealware.org• TechSoup – www.techsoup.org• Nonprofit Risk Management Center –

www.nonprofitrisk.org• Independent Sector – www.independentsector.org• C-Bar – www.texascbar.org

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Q & A

Mary Beth HarringtonNonprofit Consultant

mbharrington64@hotmail.com972-839-9960

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