{"id":338633,"date":"2015-07-09T18:33:38","date_gmt":"2015-07-09T22:33:38","guid":{"rendered":"https:\/\/joangarry.com\/?p=338633"},"modified":"2024-10-01T09:43:03","modified_gmt":"2024-10-01T13:43:03","slug":"board-governance","status":"publish","type":"post","link":"https:\/\/joangarry.com\/board-governance\/","title":{"rendered":"Is \u201cBoard Governance\u201d a Dirty Word At Your Nonprofit?"},"content":{"rendered":"\n

Can we all agree that board governance and oversight of the finances is important? It\u2019s one of the most critical responsibilities of any board.<\/p>\n\n\n\n

Then why are so many boards asleep at the wheel? Sometimes it seems like boards only pay attention to the budget when things go catastrophically wrong<\/a>.<\/p>\n\n\n\n

Of course at that point, it\u2019s way too late.<\/p>\n\n\n\n

Funny word isn\u2019t it? Oversight. It can mean either \u201ctaking responsibility\u201d or \u201coops.\u201d<\/p>\n\n\n\n

Clients galore talk about their boards using the \u201coops\u201d version of oversight.<\/p>\n\n\n\n

Nonprofit staff clients often complain to me, \u201cMy board can barely stay awake during budget presentations. They never asked a single question.\u201d<\/p>\n\n\n\n

But here\u2019s the thing. It may not be entirely the board\u2019s fault. The board may not entirely understand what they need to do. And you, the staff, may be communicating with the board all wrong.<\/p>\n\n\n\n

Today, I will offer you some advice on what nonprofit leaders can and should be doing to get their board members to move from \u2018oops\u2019 to taking responsibility for the numbers.<\/p>\n\n\n\n

And as a bonus, I will offer you templates you can freely download and adapt that I believe can really help when you have a failure to communicate.<\/p>\n\n\n\n\n\n\n\n

WHAT SHOWTIME TAUGHT ME ABOUT NONPROFIT BOARD GOVERNANCE<\/h3>\n\n\n\n

In 1996, I spent a year on special assignment during my eight-year tenure at Showtime.<\/p>\n\n\n\n

In the Finance Department. Ugh.<\/p>\n\n\n\n

I am not a CPA, I don\u2019t have an MBA. Honestly, I felt like E.T.<\/p>\n\n\n\n

But somehow I was able to get business unit vice presidents to care about their monthly numbers. This was no small task.<\/p>\n\n\n\n

I did it with a cover memo that told them just what they needed to hear to help them manage their money more closely, consider sales strategies, and raise red flags coming down the pike.<\/p>\n\n\n\n

The key thing: I brought the numbers to life and I made them actionable<\/strong>.<\/p>\n\n\n\n

Numbers are not an end. Numbers are a tool. They are a means to understand your business and a key lens through which to make important decisions.<\/p>\n\n\n\n

And it is the staff\u2019s responsibility to make the numbers really mean something to your most important stakeholders.<\/p>\n\n\n\n

Here\u2019s what E.T. learned and taught while on Planet Finance.<\/p>\n\n\n\n

5 WAYS TO GET YOUR BOARD TO CARE ABOUT YOUR FINANCES<\/h3>\n\n\n\n
    \n
  1. Not Just the Treasurer
    <\/strong><\/strong>Your audience is the full board. You have to take responsibility to work with the treasurer to make the information meaningful and relevant to everyone including folks who may not be so financially savvy. You might have to avoid the use of big words. Note: \u201cBalance sheet\u201d might be two big words.<\/li>\n\n\n\n
  2. It\u2019s Not About Quantity
    <\/strong><\/strong>Assume they\u2019ll only read the cover memo. Even if you are required to produce and distribute monthly statements that are multiple pages long. What do you need them to know? The cover memo is the single most important document you will provide to them \u2013 for monthly, quarterly and budget materials. More on that in a bit.<\/li>\n\n\n\n
  3. Provide Context
    <\/strong><\/strong>The vast majority of board members work for big companies. Certainly bigger than your nonprofit. The expense numbers will seem small and inconsequential to them. They sure as hell aren\u2019t to you. How can you offer a frame of reference that puts the numbers into a perspective that will cause them to sit up and take notice.How about a slide in a presentation that says \u201cSmaller Size: Same Issues\u201d \u2013 Show how your personnel costs of your $500K organization represent a similar % to the % of their mega-million budget.<\/li>\n\n\n\n
  4. Focus On What You Need Them To Know
    <\/strong><\/strong>Yes you are obligated to provide them with lots of financial data each month. But you cannot bury the lede. They will not necessarily grab it themselves and your treasurer may not be thinking in terms of communicating financial information in a user friendly way. You have got to take the lead on this.Use headlines and infographics that cause numbers to stick. And please, use language a 15 year old would understand. Clear and simple.<\/li>\n\n\n\n
  5. Your Staff Finance Person May Be the Wrong Messenger.
    <\/strong><\/strong>People who live and breathe numbers have \u2018<\/em>    the curse of knowledge<\/em><\/a>.\u2019<\/em> They are <\/span>so<\/strong> close to the numbers that they just assume that everyone understands the implications. So work closely with the person generating the reports. Talk through what the numbers <\/span>mean.<\/em><\/strong> Again, how should it best be communicated so that it \u2018sticks?\u2019<\/span><\/li>\n<\/ol>\n\n\n\n

    3 LAST PIECES OF ADVICE<\/h3>\n\n\n\n