“The Board’s role is to pull management out of the trees to see the forest.”
― Pearl Zhu, Digitizing Boardroom: The Multifaceted Aspects of Digital Ready Boards
Warning signs you need a board evaluation
Each charity is unique, however the following are some general warning signs that may indicate potential issues with a charity or NFP board:
- lack of transparency:
incomplete, missing or unclear financial reporting. - poor planning:
lack of a clear strategic plan for the charity’s future, or failure to review implementation of the plan and adapt to changing circumstances. - no plan to attract money for your mission risks failing to diversify funding sources
- weak financial management:
persistent financial deficits or irregularities, poor (or no) budgeting and financial forecasting. - passing the buck on fundraising: a mistaken belief among directors that it is not their role to raise money.
- conflicts of interest:
board members fail to disclose their interest in decisions that benefit them personally (or their associated businesses). - poor board composition:
lack of diversity among board members.
Board members without the necessary skills or experience to fulfill their roles effectively. - poor oversight:
lack of effective oversight of the charity’s activities and programs, including evaluating the charity’s impact - ineffective communication:
poor relationships between the board and stakeholders, including donors, volunteers, and the community. - compliance issues:
non-compliance with relevant laws and regulations and the charity’s own policies and procedures. - Inadequate risk management:
failure to identify and address potential risks to the organisation (i.e. no risk management plan) - lack of succession planning: no clear plan for leadership and/or board succession.
- unproductive meetings:
poorly structured agenda, limited discussion on key issues, discussion dominated by a few individuals.
It’s important to note that these signs are not definitive proof of poor performance on their own, but they may warrant further investigation. charity boards should regularly assess their governance practices, seek feedback, and make adjustments to ensure they are fulfilling their responsibilities effectively.
If you’d like to learn more about better charity’s board evaluation services, contact us for a free consultation.
Charity board evaluation: how a brilliant board can unlock your potential!
Ensure directors understand and embrace their role as charity trustees
A charity or not-for-profit (NFP) board performs three key roles: strategic direction, oversight of the strategic plan’s delivery and the stewardship the organisation needs to reach its full potential. Importantly, your board should also be actively connecting your mission with money.
A high-performing board understands the importance of a regular charity board evaluation. An evaluation typically examines how effectively the board’s roles are being fulfilled and identifies opportunities for improvement.
The objectives and process for an board effectiveness review should be tailored to its situation; for example, a recently-established charity will have different challenges and opportunities to one which already has mature governance systems in place.
Charity board evaluations can be undertaken through:
- an external evaluation facilitated by a charity consultant; or
- a process of peer-to-peer self-evaluation
Regular self-appraisals allow directors to constructively review their performance and identify areas for improvement. It is, however, good practice to conduct a periodical external review; particularly to support a period of change.
Use our FREE online survey to self-assess board effectiveness against best practice and compliance with the charity governance standards. if your organisation is below best practice, better charity can facilitate an external charity board evaluation tailored to your organisation’s needs and develop a roadmap for improved board performance and governance.
If you’d like to learn more about better charity’s board evaluation services, contact better charity for a free consultation.
