The evidence of good governance -- meeting minutes

In a court of law, the minutes of board meetings are the evidence of good governance.  Would your board pass the test?

In this era of transparency and accountability, recording minutes properly is very important.  The purpose of the minutes of a meeting is to transcribe into official form the actions of the board.  In a recent court case, this understanding was extended to include the purpose of being “evidence that the actions were taken according to proper procedures.”

Board minutes need not be long and detailed.  Lengthy minutes are more prone to interpretation or misrepresentation.  Minutes should focus on what was done, not what was said; unless a member asked for her/his comments to be a matter of record.  The bulk of minutes should record motions made, the name of the person who made the motion, any points of order, or any appeals, and whether the motion passed.  Though it is neither advisable nor necessary to record any of the discussion, the minutes should reflect that there was lengthy discussion, if indeed there was.  In describing the discussion, it is important to avoid words that can be misinterpreted, such as “argument” or “compromise.” Remember, these are legal documents and can be used in a court of law.  If a board member disagrees with an action, s/he may always request that her/his position be a matter of record.

In order to ensure that that there is sufficient evidence that actions were taken according to proper procedures, it is important that the minutes contain the following:

• The date, time, and place of the meeting
• The fact that proper notice was given—or notice was waived
• Whether the meeting was a regular or special meeting
• The names of the attendees
• Whether a quorum was present
• Whether any board members present for the quorum, left early or were not in the room during certain deliberation;
• Whether any board members arrived late and were not in the room during certain deliberation
• All actions taken

It is a good idea, though not required, to include evidence of sound decision making.  Copies of any information or reports considered in discussion may be made a matter of record by attaching them to the minutes.  The minutes may also cite sources rather than including the information if that is deemed sufficient.

In summary, it is a good practice for board members to remember that they are legally responsible for governing an organization properly and the minutes are the evidence.  In light of this, members should be mindful to ask good questions about any action, even if they seem obvious, if it is important to a particular action or deliberation.  Or even if it is important to demonstrate that the board has been diligent.

An Epiphany: Focusing on the Cause Not the Credit

One of my most powerful fundraising experiences was with Cornell University.  During my ten years with the University I experienced cross-functional collaboration that set the tone for what I expected as I moved on with my career.  The effect on fundraising and on team cohesion was powerful.  

In addition to reading the Agitator blog that I've pasted below, I recommend Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organization, by Dave Logan, John King, and Halee Fischer-Wright.  Their research demonstrates how most teams cannot get beyond intra-organizational competition, which impedes—even prevents—high performance.  In short, their research shows that the highest performing, most innovative teams, are composed of members who have had an “epiphany” about how they are better by focusing on the cause and not the credit.  But, that epiphany can only occur and thrive in environments that support it by structure, policy, and culture.

The beginning of the New Year may offer us opportunity for self reflection and new beginnings--are we focused on the credit or the cause?

Wishing you the best of success in service to your cause,

Jim

The Agitator: Resolved: No Fundraising Silos

Fri, Dec 30 2011

As we noted last week, the superb comments offered by readers of The Agitator are a delight to me and Roger. And we’re gratified that these have grown strongly in number over the past year.

So we thought it fitting to give the last word of the year to an Agitator Commentator.

We picked this recent comment from Steve MacLaughlin at Blackbaud, who talks about the imperative for nonprofit fundraisers to embrace multi-channel fundraising. Use of multiple communication channels reflects the real world of donors … if not yet the real world of some nonprofits!

The bottom line: Different strokes for different folks (donors) is not just some ideal … it’s vital to fundraising success. And the chief obstacles to capturing its fundraising benefits are operational and data silos within organizations.

Here’s what Steve has to say:

“Is it channel conflict or cognitive dissonance? It is sometimes very hard to tell.

There is way too much philosophical debate on which channel should get the credit for the gift. This is mostly fueled by organizational silos or incentives that nonprofits have put in place.

Here’s the reality: Donors are multichannel. They receive messages across multiple channels and they give across multiple channels. They don’t care about your org chart or who gets credit for the donation.

The problem is that many nonprofits are still organized around single channels each doing their own thing, with their own strategies, their own data, their own donors, and their own systems. That’s broken and really costly.

Ultimately, you want to use the right number of channels to drive the right people to take the right action using the most effective and satisfying giving mechanism as possible.

If that means a direct mail piece and a check, then great! If that means a phone call and an online donation, then fantastic. If that if a tweet, an email, a QR code, a website, and a donation for, then so be it.

And if you’re looking at donor behavior across channels, then you will begin to see some trends in what channel mix works best for different types of donors. Oh yeah, did I mention that donors don’t all respond the same way to the same channels? One size fits all approaches are as doomed as single channel tactics.

Statistically speaking, online donors are much more likely to switch to become offline donors. About 32% of online donors will become offline donors compared to only about 3% of offline donors switching channels.

Your results may very. Always be testing.

No one channel should get all the credit or all the blame. You succeed or fail based on how well you do these things together.”

Amen.

Happy New Year!

Roger and Tom

P.S. And here’s our New Year’s Resolution … Resolved: No Silos!

Connecting Authentically

In a recent trip to the Art Institute in Chicago, I was captivated by the work of a modern artist who seemed to be playing with the concepts of boundaries and definition.  When I read her bio, she said she drew her inspiration from a Zen quote:  "We cannot know something until we forget its name."

As a father of an extraordinary child who has what we call disabilities, I experienced a deep resonance with the quote.  In order to make sense of the world we need to categorize things--name them, classify them.  Yet, it has been my experience that as soon as we do, we risk losing touch with their true nature.  We make assumptions and our  understanding of them becomes obsolete because change is constant--and many things never really fit neatly into our categories anyway.  I'm not suggesting that we shouldn't categorize because it is a very useful and valuable tool.  But, if we are too reliant on our boxes, if we don't acknowledge their limitations, we lose the essence of what we put in them.

I was inspired to write today when I read an article about the changing view of "doctor" and "patient."  Due to the disruptive influence of high medical costs and pervasive information on the internet, patients aren't behaving.  They are stepping outside the box of "dependent-recipient."  And doctors are relinquishing the role of omniscient authority.  As one doctor recently told the Wall Street Journal:  Each patient is is like a Rubik’s Cube, and must get an individual solution.

I'll bet you're wondering how I'm going to relate this to the nonprofit sector.    Well, here goes...  As the extraordinary growth of the nonprofit sector and the dramatic expansion of information technology smash into the recession, organizations are looking for scalable, efficient fundraising solutions.  The challenge is that those scalable solutions risk widening the gap between the organization and the donor.  By their nature, they make broad assumptions and sometimes use generic tools to reach people cheaply.

I think we can define two types of fundraising:  motivational and inspirational.  Motivational fundraising depends upon "burning bridge" appeals that tug on people's heart strings and their sense of obligation.  Inspirational fundraising taps into people's values and how they want to make them explicit in the world.  Motivational giving is for a charity.  Inspirational giving is for a cause.  Motivational tools are usually more scalable and may appear more efficient.  Yet, motivational giving can lead to donor fatigue--I'm hearing with surprising frequency how people are tired of being solicited.  People are often tired because they are not connected to the cause; rather they are acting out of obligation to help a nonprofit.  

By contrast, inspirational giving leads to donor excitement.  People want to support causes they care about through organizations they trust.  Inspirational tools require more resources, but not necessarily financial.  What they do require is people, time, and strategy.

Inspirational fundraising is relationship fundraising--we have to get to know people.  And inspired donors are the most generous and loyal--our best donors, our core donors.  Inspirational fundraising taps into an individual's unique Rubik's Cube.

The challenge is daunting.  How can we possibly have relationships with all of our donors? This is where strategy comes into play.  And part of the strategy is "don't fix what ain't broke."   But, do pay attention to the shifting sands.  Plan for impending change.  Begin to introduce new strategies and approaches.  Redeploy board and staff time and energy toward building relationships with your best donors.  Use lessons learned from facebook to take advantage of relationship building technology.  Borrow from trends in the for profit sector where companies are leveraging the “friend factor” and using random acts of kindness to touch people.  Don't just talk to people, have purposeful conversations.

The idea is that each moment throughout the day we can listen and learn and respond--and take notes.  And members of our boards become a critical component of this process.  Not to ask for dollars, but to connect to people and build authentic relationships--even if it's a brief conversation.  We all remember those who care and forget those who pretend.

By connecting authentically with our donors we learn their stories, their values, and their reason for being engaged with our cause.  We get to know them and understand how their Rubik’s Cube world of values, beliefs, motivations, and dreams fits with ours.  Then we tap into the creative force each brings to life.  And we discover how together we can change the world.

Faith

Earl Bakken, electrical engineer, pacemaker inventor, and founder of Medtronic is an interesting guy.  He thinks faith heals.  At least that's how I understood what he told me a few years ago in the conference room of the hospital he founded on the Big Island of Hawaii.  


North Hawaii Community Hospital is beautifully situated in Waimea.  It is the highest tech-highest touch healing center I've ever visited.  It even has a director of holistic services who oversees a program that includes reiki, prayer blanket ministry, pet therapy, aromatherapy, and guided imagery. Their vision is to treat the whole individual through a team approach to patient-centered care.


But, it was the faith thing that caught my attention.  So, I asked him, as an engineer who's company's products have saved thousands of lives, what does faith have to do with it.  He responded, it's the person's faith that brings about healing, the technology alone is insufficient.  In a document entitled The Healing Environment in Blended Medicine at North Hawaii Community Hospital, he writes: "We know the importance of the intangible, of faith..."  


My favorite definition of faith is "the substance of things hoped for, the evidence of things not seen."  Faith and vision are inextricably linked; and are sorely needed in times of stress and uncertainty.  People who have faith don't usually focus on the way things are; they focus on what can be.  They imagine it, describe it, believe in it.


Faith holds the power of transformation.  It means we stop talking about what we don't have and spend time talking about what could be. As Jim Lord, author of What Kind of World Do You Want writes: “It takes courage to break from our routines and bring our ideals, hopes, and dreams out into the open; to make them legitimate topics of conversation; to shift our sense of what is and what is possible by changing the way we talk about it.  It takes courage to reclaim our power to change the world.” 


As with hope, faith is contagious.  Albert Schweitzer said, “I am convinced that far more idealistic aspiration exists than is ever evident.  Just as the rivers we see are much less numerous than the underground streams, so the idealism that is visible is minor compared to what men and women carry in their hearts, unreleased or scarcely released.  Mankind is waiting and longing for those who can accomplish the task of untying what is knotted and bringing the underground waters to the surface.”


Whether we are religious or not, faith plays a key role in leadership.  Whether as a nonprofit executive or a member of a board, championing the ideals of our organization's cause, seeing the world as we imagine it can be, and inspiring others to follow is our responsibility.


So, let's keep the faith.

Hope

In challenging times, hope often fades as it is consumed by the angst and worry that pervades the world.

One of the people I most admire is Dr. Bill Arnold--even though we haven't spoken in years.  He taught me a lot just by being who he is.    By profession, he is a rheumatologist who cares mostly for older adults.

Fifteen years ago, Bill was the perfect chair for a fundraising campaign that was foisted upon me as a new chief development officer for a new bioethics center at a major healthcare system.  Not long after I arrived at the Center, I was told I had to launch a campaign to honor the outgoing CEO of the healthcare system who had been there for decades.  We had no prospects, no database, not even any names in a file.  But, someone told me to talk with Bill.  That was the start of a surprisingly gratifying relationship--and successful campaign.

Bill grew up on the south side of Chicago, was a good Catholic and an accomplished figure skater.  Though he appeared to be a buttoned down professional--and served as president of the medical staff, he loved the Stones and would quote from their lyrics.  As I came to know him, I realized how caring and hopeful he was as a person. And that rubbed off on me.  When he talked about his profession and the older adults he cared for, he'd purposefully misquote a Biblical text:  "Now abide faith, hope, and love.  And the greatest of these is hope."

Bill often spoke of the powerful healing quality of hope.  Hope uplifts and energizes.  Hope transforms people.  When you encounter hopeful people you feel better.

When I asked Bill to chair the campaign, he didn't hesitate.  He offered advice, agreed to provide introductions, and gave me several names to pursue.  By the end of our first conversation, his positive energy gave me hope that I might actually succeed.   As alluded above, we did succeed.  Within less than a year, we had achieved our goal and had nearly 5,000 names in our files--10,000 by the next year.  At the celebration, we presented Bill with a plaque from which we hung gold gilded (well, it looked like gold) skates--with an inscription: "You can't always get what you want...  but you get what you need."

Bill's hope was the fuel of success.  It's amazing how infectious hope can be.  The more we talked about the vision, the possibilities, and the impact, the more people came on board.

When people are hopeful they are more creative, more visionary, more collaborative...  more pleasant.  As nonprofit leaders today, we have an opportunity to be messengers of hope.  We have a choice--maybe an obligation--to focus our attention, our thoughts, and our words on the possibilities not just the problems.

Strong leaders are visionaries who see beyond the desert to the fertile valley.  They don't indulge in the  troubles, difficulties, and setbacks.  They find ways leap the gap, to climb the mountain, to trek through the wilderness to the hope of the future.

We can be hope-whisperers...  better yet, roarers.  It's one of the best organization building and fundraising tools we have.

Daring to Lead 2011: Board/CEO Partnerships

More than 3,000 executive directors participated in Daring to Lead 2011, the third in the series of national studies produced in partnership by CompassPoint and the Meyer Foundation.

The key finding that most startled me:  Though slowed by the recession, projected rates of executive turnover remain high and many boards of directors are under-prepared to select and support new leaders.

• Just 33% of executives were very confident that their boards will hire the right successor when they leave.  
• Forty five percent of executives did not have a performance evaluation last year; and only 32% of those who did said it was really useful.  
• Stunning to me is that 33% of current executives followed a leader who was fired or forced to resign.  
• Newer leaders reported that they were having a difficult time establishing effective partnerships with their boards, describing disillusionment with what boards contribute with respect to strategy, resources, and personal support.  
• Satisfaction with board performance was lowest among leaders on the job between one and three years.  

As the authors sadly report:  "It appears that many boards see executive transition as ending with the hire."

* Excerpted from Daring to Lead 2011

Effective governance is founded on ownership and partnership.  Those of us who serve on boards must strive to form a strong partnership with the chief executive, focusing both on a supportive relationship and accountability.  As a former CEO, I can guarantee that chief executives long for productive alliance with their boards--it can feel quite isolating at the top.

As board members, our first step is to make sure the board is living up to its responsibilities.  Is it leading the organization through effective governance and fulfilling its fiduciary responsibilities?  Is it collaborating with the CEO in strategic and generative thinking?  And most important, has the board clearly articulated--in writing--what it expects of the CEO?

Too often boards conduct the CEO evaluation at the end of the year with little forethought and planning.  And using 20/20 hindsight...  boards critique the CEO.  No wonder 33% lose their jobs!

An effective process is collaborative.  It is one in which the board and the CEO define expectations and success measures at the outset. Here are some simple tips to achieve a happier CEO/board partnership:

1. Begin with clearly articulating to the CEO her/his areas of responsibility.  Be specific, put it in the job description.  The CEO can contribute a lot to this conversation.  But, at the end of the day, it is the responsibility of the board to define.
2. Ask the CEO to describe his/her aspirations for each for each area of responsibility—i.e. what it looks like if s/he achieves all s/he hopes to achieve in this area this year.  Meet with the CEO to discuss them.
3. Ask the CEO to identify the key activities s/he will undertake to achieve those aspirations--and what s/he intends to achieve by taking those steps. In short, you are asking the CEO to tell you exactly what s/he will do and what success looks like.  
4. Take time to really listen and ask good questions.  It is important to do this early in the cycle, so that the conversation is aspirational and collaborative, and not defensive. The board should be thoughtful and supportive; but still be clear about what it views as success.  The primary motivation is that everyone wants the CEO to be successful.
5. The CEO should draft a work plan that includes areas of responsibility, aspirations, key activities, and success measures; and present it to the board for discussion.
6. Three to four times during the year, a committee should meet with the CEO to review progress on the plan.  Committee members need to be careful not to micromanage—but rather to ask good questions.  This discussion should allow for changes to all aspects of the plan that are reasonable.  Has the environment changed?  Have resources changed?  Have assumptions not held true?  All of these are good reasons to adjust expectations to reflect the current environment.  These discussions are also intended to make corrections.  If indeed the CEO just isn't following through on an area of responsibility, it’s the committee’s obligation to raise that issue and discuss with the CEO how it will be effectively addressed.

The result of this process is that the board and the CEO develop a collaborative partnership.  The board is well informed about the challenges facing the CEO and should be responsive as needed to support, mentor, and hold him/her accountable.  Another benefit, is that there are no year end surprises.  All of the issues of concern have been raised during the course of the year.  This process also gives the CEO control of his/her destiny.  S/he is a senior professional who should define his/her work plan and be accountable to the board for it.

As board members, we have an obligation to our CEO.  We should step up to the role as partner.

Jim

Living Your Values... Really

I'm a big fan of defining core values for organizations--and for ourselves, personally, for that matter.  I've probably blogged at least twice on the topic in the last six months.  

This afternoon, as I was editing core value definitions for a client, I recalled an article I read a few months ago in the Stanford Social Innovation Review by Mary Gentile, director of “Giving Voice to Values” and senior research scholar at Babson College.  She writes that we can give voice to our values by practicing them.  She has found in her research that most people would like to act on their values, but most are ill-prepared for that very simple reason--they just haven’t practiced them.    She outlines seven principles for anyone who would like to embody their values in the world day to day.

1. Acknowledge your values and articulate them.
2. Choose to express them… creatively, personally.
3. Recognize that you will experience value conflict.
4. Understand your purpose in your values—why you hold them, what they mean.
5. Know yourself, how you process the world; express your values consistently with who you are, not as someone else would.
6. Talk about your values; make them real without grandstanding.
7. Call out rationalizations that work against acting on them.

Pretty rational, pretty straightforward.  Worth a try.  I can guarantee that it will feel good.

Cheers,

Jim