BLOOMINGTON, Indiana – Millions of Americans belong to membership organizations from trade unions to neighborhood associations, from sports clubs to chambers of commerce. The effectiveness of those groups is in large part determined by the abilities of their governing boards. Two Indiana University researchers offer a recipe for strong board leadership in a new book that tackles an important but overlooked subject.
Based on a survey of nearly 1,600 nonprofit CEOs and executive directors, these are the key ingredients to success developed by Dr. Beth Gazley and Professor Ashley Bowers from the Indiana University Bloomington School of Public and Environmental Affairs:
· A strong strategic orientation and culture
· Effective selection and decision-making procedures
· A culture of learning and assessment
· Close relationships with staff and with one another
The survey also revealed a warning that member-serving organizations should take seriously: many of their directors are making plans to leave their jobs.
Gazley and Bowers analyze the survey results and lay out strategic choices that answer the question in the book’s title: What Makes High-Performing Boards: Effective Governance Practices in Member-Serving Organizations (ASAE Association Management Press). The study was sponsored by the ASAE Foundation, the research arm of the American Society of Association Executives.
“Associations and organizations with dues paying members serve a broad swath of society,” Gazley, a former fundraising professional and management consultant for public interest, cultural and higher education institutions, says. “They operate in many parts of the nonprofit tax code and haven’t been studied nearly as much as charities have. But they are also led by boards, and good governance matters equally to them. All boards are expected to perform their stewardship and oversight roles in an increasingly transparent environment, under the scrutiny of the public, the media, and regulators.”
Bowers adds, “Not only is this study addressing the important and understudied area of governance in member-serving organizations but it does so with methodological rigor. This ensures that we produce accurate and reliable recommendations.”
Good governance begins with a well-chosen and right-sized board. Gazley and Bowers found that boards of about 12-20 members operate more effectively, but caution that there is no magic number. “Above all,” says Gazley, “good governance is about intentional design.” Strategies for screening prospective board members and limiting their terms in office are also strong contributors to board performance. External nominations and appointments are problematic and introduce the potential for conflicts of interest.
Once a board is in place, the members are most effective when they think strategically. “We found that all too often boards get swept up in the day to day operations of the organization,” Gazley says. “That frustrates the CEOs and staff. They want the board to spend its time pointing the ship to the right destination so they’re free to focus on the journey.”
Boards also operate most effectively when the members willingly take a hard look at their own performance. “Self-assessment matters,” Gazley says. “There are a lot of board assessment tools out there, but we found the board’s commitment to the process was more important than the choice of tools.”
A final element in good governance is a well-trained CEO and stable, professional staffing. The best CEOs are trained in association management and have a long tenure in their positions, the authors conclude.
“The problem is that many association leaders don’t see long tenures as likely,” Gazley says. “Nearly half our respondents were planning to leave their positions and 29 percent expected to quit within the next three years. They’re highly dissatisfied with board performance and they’re voting with their feet.”
The solution, suggests Gazley, is for boards to practice an active culture of responsibility and to invest sufficiently in board development and management. “Whatever size, composition, and decision-making structure they choose, structure is ultimately less important than the means by which they facilitate effective decisions as a governance body.”