By Melinda Moore and FCIS
The fundamental role of the board of a non-profit corporation is to govern the organization such that it can fulfill its mission, move toward its vision, stay true to its values, and discharge its accountabilities. Boards often struggle with how to balance the various responsibilities within that overarching role.
Too often, meetings are spent reviewing reports and discussing on-going matters that distract from the larger, strategic questions. While these activities are among the responsibilities of the board, they can leave board members feeling like they don’t have time to turn deliberate attention to matters critical to the organization or its stakeholders. The Board must make time for that deliberate attention in order to guide the organization’s response to developments in the environment and to plan for the long term sustainability and success of the organization.
In previous issues, articles have explained different approaches to handling various aspects of the board’s work through the use of a Consent Agenda and Meetings without Management. This article will describe incorporating these – and other – approaches into an integrated agenda that releases time for strategy and enables due diligence by the board.
Agenda design can assist boards to focus their discussions on matters within their role about which they can provide guidance and support to the organization.
First, let’s review two general principles for board meetings.
- Be prepared. Everyone must come prepared: Directors and management. Management prepares materials that are distributed in advance of meetings to provide directors with the background necessary in inform the board’s discussions. Risks increase when that information is incomplete or made available at the last minute and when directors do not sufficiently review and understand the information. Effective due diligence may not occur if directors aren’t prepared to ask probing questions that explore the alignment to strategy and the risks associated with information and proposals brought forward by management.
- Focus on deliberations – not presentations. The board chair should be able to assume that everyone has prepared and is ready to discuss every issue. A committee chair or management may be invited to provide brief introductory remarks, but these would not review everything that was in the pre-reading. This focus allows the board to spend its time together acting as a board in discerning the appropriate response of the organization to the matter at hand.
Agenda design can be a helpful way to assist the board to organize its activities to focus on those governance matters that most require its attention. Assigning items to one of four agenda segments can help concentrate the board’s energies on matters with longer range impacts and required decisions.
The Discussion Agenda would be allocated the largest portion of the board’s time as it would include matters of strategic importance to members or the organization. Significant time would be assigned to these discussions as they have potential for long term impact on the organization and its stakeholders and require deliberate attention by the board to make decisions or advise management.
These matters could include:
- Issues emerging from the external environment that pose or increase risk to the organization;
- Committee recommendations that have broad organizational impact (e.g., budget) or have not been considered by the board previously (e.g., new governance policies);
- Oversight and accountability reports from the President and CEO. Written reports would be included in the materials with oral updates on emerging matters and an opportunity for the board to ask questions and provide advice or feedback;
- Business items (e.g., risk oversight reports).
The Consent Agenda is a collection of ordinary or recurring business items that may include decisions that are within the normal course of business and are not expected to be contentious. It could also include information in follow-up to previous board discussions that doesn’t require further discussion at this time. Items included on the consent agenda are approved through a single motion and the minutes document all actions. Directors can ask that items be moved to the discussion agenda, although it may not be possible to address them at the same board meeting.
The board may hold an In Camera session when it is important for an issue to be discussed on the record and only in the presence of board members and invited resource people. The chair or any member of the board may request that an item be considered in camera. Usually, these discussions would involve employment and compensation of people; property or other contractual matters; litigation; and other highly sensitive or confidential decisions where premature disclosure of the matter could be prejudicial.
The final section of the board’s discussions actually takes place after the board meeting has formally ended. The core purpose of the Meeting without Management is to ensure independent oversight of management by the board and is a tool for board effectiveness and process improvement. Structured as a distinct part of every board meeting, this is a chance for the board to consider those aspects of the meeting that worked well and those that could be improved going forward. It is not an opportunity to reconsider board decisions. These discussions are not part of the formal meeting and are not minuted. Feedback is provided to management immediately by the chair.
Board meetings are the only opportunity for the board to exercise its role as a board, since it can only act as a collective. The meeting agenda can greatly impact the board’s ability to fulfill its role by facilitating appropriate focus on matters of governance while enabling due attention to other aspects of its responsibilities. The chair and management can collaborate to implement an agenda design that balances these sometimes competing matters in a way that enhances board deliberations and increases the engagement of board members in the governance of the organization.
Adapted from a column originally published in Boards, May 2017 © Governance Centre of Excellence; All Rights Reserved
Melinda Moore is Manager, Corporate Governance at the Ontario Hospital Association, where she has led the governance portfolio since 2010. She is a Fellow of the Institute of Chartered Secretaries and Administrators and has been a governance professional for more than twenty years, primarily in the not for profit and charitable sectors.