Board Fundamentals

I feel like we should have more structure,” a young professional who works for a Board shared with me recently.  While working in a nonprofit “start-up” (yes, start-ups aren’t always for-profit companies), I was asked, “What advice would you give me, knowing what you know and doing what you do?” She’d been working with a consultant on a strategic plan for the past year and, while I’m the first to say there’s not one way to “do” strategic planning, there are some concepts which need to be in place to plan for the future for an organization to succeed.  Strategic planning is an important key responsibility of a Board, but it is not their sole responsibility. And, while Board members are often selected for their professional acumen in their given field, creating unity and synergy among a Board necessitates covering some fundamentals for a Board to achieve its work to best lead and serve the organization.

Mission and Vision
You may hear about mission statements and vision statements and think, “Are these really that important?”  Simply stated, YES!  A mission statement captures what an organization does and states the values that guide the organization.  A vision statement is aspirational and conveys where an organization is going.  Seem like semantics?  Consider the mission and vision statements for Tesla:

Missionto accelerate the world’s transition to sustainable energy .” 

Visionto create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.” 

The company runs on key principles that guide its internal practices, and this has contributed to its overall strength. A vision statement simply provides the future roadmap for the firm, while the mission statement outlines the planned activities to enable the company to achieve its vision. Without mission and vision statements in place, organizations do not have a clearly defined guide star by which to measure work and progress. It is not only the job of the Board to set the tone for the mission and vision of an organization, but to provide accountability that the organization’s leadership is performing and managing operations in ways that align with the mission and promote the vision of the organization.  

Fiscal Oversight
Boards have fiduciary responsibility for their organizations. Is the money in the organization spent well?  Beyond budget review and approval, this covers issues of malfeasance and also encompasses sound fiscal management.  This may get tricky, and thus the relationship between a Board Chair and CEO becomes especially important.  Does the CEO have a penchant for adding in “days off” around the holidays, for example, that are inconsistent with the organization’s vacation policies?  This is an example of when a Board Chair must think about how the organization’s resources are being used.  Staff are paid to perform and if there is a need to give extra days off, then this should be a Board-level discussion related to changing the organization’s compensation policy.  But, it is not the Board Chair’s responsibility to consider the budget, line by line, and scrutinize how much the CEO has assigned to office supplies.  Seem like fuzzy delineations?  That is because they are.  Conversations on a regular basis between the CEO and Board Chair are essential to understand how the organization is working and managing finances.  On a formal level, the Board approves the annual budget and reviews an external audit if one is conducted.  But, on an informal level, it is about the Board Chair having and expressing confidence in the CEO’s financial leadership of the organization.

Lines of Authority
This somewhat arbitrary line of conversation about the CEO’s leadership of the organization is where Board Chairs so often over-step.  While the Board Chair, and the Board, have ultimate financial responsibility for the organization, the CEO is hired to run the organization. Board Chairs – and sometimes Board members – wade too deeply into the daily operations of an organization and that can be out of bounds.  My favorite story related to this occurred when a Board Chair suggested he should have an office in the organization’s headquarters and the CEO replied (in a humorous manner), “Well, if you want to work here, maybe you should just take my office…”  Again, like with fiduciary responsibility, having regular conversations between the CEO and Board Chair are key to understanding workflow and allowing the Board Chair to express confidence in the work of the CEO and the CEO to share what they may need from the Board. Having a clear articulation of the lines of authority and roles and responsibilities of the Board in relation to the organization’s staff leadership requires understanding and communication.

In addition to fiscal oversight, CEOs require strategic direction from a Board.  Based on what the organization does and where it’s headed (mission and vision), a Board sets strategic direction for an organization in concert with the staff who offer methods to operationalize the strategic directions.  Strategy for an organization is based on an understanding of the strengths and challenges of the organization and the environment in which it exists.  This is one of the most exciting things a Board can do.  And, doing so along with staff leadership has the potential to create a seamless plan that can really work.

However, these fundamental practices of a Board are not possible without effective and consistent communication. A common theme across all the fundamental responsibilities of a Board, communication is foundational to the success of a Board. Making sure the right people have the right information and are able to have meaningful conversations can ensure Boards operate at their fullest potential.

Assembling a group of talented leaders on a Board is an important first step, but Board development can’t stop there if you want to ensure a Board can effectively work together to support the organization. Joining a Board is much like starting a new job. New members may have the skills needed to do the job, but additional onboarding and training can help them thrive within their role. AboveBoard, Plaid’s signature online board training program  is designed to help Board members gain the fundamental knowledge they need to excel in guiding and leading an organization. 

Want to learn more about how AboveBoard can help your organization’s Board get important conversations started? Learn more by emailing

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