By Josephine Victoria Yam, J.D., LLM.
2016 July 26
Read time: 2 minutes
According to Imagine Canada, there are about 170,000 charities and nonprofits in the country, which makes Canada’s nonprofit sector the second largest in the world. This number translates to some 170,000 nonprofit boards providing governance over this $106 billion sector. As in any sector, while many nonprofit boards are high-performing, many are unfortunately lacklustre.
David Simms, in his Harvard Business Review article, articulates the following 3 distinct features of high-performing nonprofit boards:
The maxim “Everything rises and falls on leadership” rings ever so true in nonprofit boards. The Chair of the board is primarily charged with leading the team of volunteer directors to set the strategic direction of the organization. It is within the Chair’s mandate to provide the inspirational leadership to her fellow volunteer directors to spend their valuable time providing strong governance as they work to advance the nonprofit’s worthy mission together with the Executive Director.
However, the Stanford Graduate School of Business’s “2015 Survey on Board of Directors of Nonprofit Organizations” found that “too many directors lack a deep understanding of the organization”. For example, 27% of directors believe that their board colleagues do not have a strong understanding of the mission and strategy of their organization. Likewise, 32% of directors are dissatisfied with the board’s ability to evaluate the nonprofit’s performance.
Diversity strengthens leadership. As the collective brain of every nonprofit, the membership of a nonprofit board should be reflective of the communities that the nonprofit serves. As noted in our earlier blog (Board Diversity: Why It Really Matters), the Conference Board of Canada explains that diversity includes a spectrum of human qualities such as gender, ethnicity, race, colour, age and sexual orientation. Unfortunately, according to a Harvard Business Review article, 81% of nonprofit boards experience great difficulty in recruiting highly-qualified volunteer directors to their boards. Thus, it is crucially important for a nonprofit board to have access to a pool of highly qualified and committed nonprofit directors with diverse skills, talents and networks to oversee the nonprofit achieve sustained success.
Depending on the nonprofit’s by-laws, board meetings are normally held once a month or once a quarter. Given the relative spaces of time between board meetings, it is extremely important that all board directors thoroughly review the board materials and do their homework before the meeting. It is only when this happens that they become deeply engaged to bring forth their wealth of knowledge and experience to the organization. Unfortunately, the Stanford report found that 48% of nonprofit directors do not believe that their fellow board colleagues are very engaged in their work, based on their absences at board meetings and their lack of reliability in fulfilling their obligations to the nonprofit.
What then should a nonprofit board do to achieve sustainable high-performance? The Stanford report lists several key recommendations including:
Nonprofits are a force for good in society. And it is through high-performing boards, together with the Executive Director, that nonprofits can successfully address society’s most complex challenges and positively change the world.
Alberta's Promise operates within the Government of Alberta’s Department of Human Services. With over 1,800 business, nonprofit and community partners, they help businesses connect with non-profits across Alberta to make meaningful contributions that benefit children and youth ages 0 to 24.
CanadaHelps is a nonprofit serving Canadian charities and donors. They increase charitable giving across Canada by making it easier to donate and fundraise online. Because CanadHelps is a charity, their fees are a fraction of for-profit alternatives, making donation dollars go further.
The Edmonton Chamber of Voluntary Organizations is a member-based nonprofit organization founded in 2002 in Edmonton, AB. They serve the nonprofit and charitable organizations in the Alberta Capital Region.
The Ontario Nonprofit Network (ONN) is the provincial network for the approximately 55,000 nonprofit organizations across Ontario. As a 7,000-strong provincial network, with a volunteer base of 300 sector leaders, ONN brings the diverse voices of the sector to government, funders and business to create and influence systemic change.
For over 62 years, Propellus has been supporting volunteers and volunteerism within the communities of Calgary. It strongly believes that volunteering is essential to creating and sustaining healthy, supportive and connected communities.
The Sustainability Network is a national organization that works with environmental nonprofits to make them more effective and efficient. Their mission is to enrich environmental leaders and nonprofit organizations so that they can help us all achieve sustainability.
Founded in 1943, Vantage Point delivers learning opportunities focused on governance, leadership, planning and people engagement for new and seasoned sector leaders, board directors and managers, aimed at advancing not-for-profit leadership.
Women Get On Board is a leading member-based company that connects, promotes and empowers women to corporate boards. They do this through an engaged community of women and men in Canada committed to advancing gender diversity in the boardroom.