A basic principle of horsemanship is that you should make the right thing easy for the horse to do, and the wrong thing hard. For example, if your horse doesn’t want to stand still, don’t try to force him to stand still. Instead, make him work — sidepass, turn on the foreleg, etc. The idea is that the horse will realize that standing still is a nice break from work.
Just this morning, I realized the same principle applies to board governance. If you have solid bylaws and policies in place, it’s going to be easier to do the right thing.
But non-profits often operate more like the U.N. than solo actors. How can they work together effectively, especially if some pay more attention to governance than others?
Once again, I turned to Wendy Bulloch, owner of Building Up. Bulloch hails from Brandon, Manitoba, and has worked with many non-profit boards on governance issues. She’s also been on several non-profit boards. (If you missed the first column that featured Bulloch’s advice on board governance, go to Grainews.ca and search “Wendy Bulloch.”)
A non-profit’s relationships with other stakeholders are performance indicators, Bulloch says. In fact, Mel Gill writes about this in his book, Governing for Results. Bulloch lists four principles for board members to keep in mind:
- Be accountable.
- Be transparent.
- Be predictable.
- Be fully engaged in your role as a board member.
Once you’ve got those four pillars in mind, it’s time to sit down with the other non-profits you need to work with.
One option is to appoint someone from your board as the liaison. The liaison can attend the other group’s meetings, said Bulloch. Your board can also get the meeting minutes from the other group to stay in the loop.
But maybe you’re unsure whether the other stakeholders will have, or get, their ducks in a row. Bulloch suggests finding a way to invite them to step up to the plate, without making them look bad.
For example, let’s say you run a figure skating club that uses the local rink. Tell the rink board that you need to know about rental fees, ice times and other expectations so that your club can start scheduling and planning for the upcoming season. Ask to see the facility budget so that everyone involved knows the costs. Bulloch suggests giving the rink board fair warning before a joint meeting, so they have time to get their information together.
What to discuss at a shareholder meeting
At the meeting, Bulloch suggests you identify what all the groups have in common, what your non-profit needs, and what the other groups need. People at the meeting should also figure out what the expectations are overall, says Bulloch. Will each group be expected to contribute volunteer hours on top of rental fees to keep the facility running, for example?
Bulloch says you should also be aware of conflicts of interest. For example, is a board member part of a business that the rink is contracting for goods or services? This needs to be disclosed upfront to everyone involved, says Bulloch.
The groups sharing the skating rink can think of it as a condo board of sorts. There is a board that manages the facility. But there are also several people who live in the condo who are stakeholders, just as there are other clubs and community members who use the rink.
When hammering out rental/use agreements for shared facilities, Bulloch suggests discussing the following points:
- What is the budget to run the facility?
- How many partners are using/running the facility?
- What is expected of all the partners?
- What are the rules if something big breaks? Is there a contingency fund? If not, how will that cost be covered? “If you have artificial ice and something goes wrong with the machine, how are you going to pay for that?” Bulloch asks.
- What are the insurance needs for everyone involved? Are all the stakeholders and all their activities covered by the current policy? Are the stakeholders meeting the requirements set out by the insurance company? Bulloch says everyone who uses the facility should provide a copy of their current policy.
- What will the rental costs be to various partners?
- What is fair warning if rental fees go up? Bulloch suggests 90 days minimum.
The joint meeting should produce a signed memorandum of understanding or rental agreement that covers who is responsible for what, as well as fees. “And it needs to be all upfront,” says Bulloch.
We all know that unforeseen costs can arise. But stakeholders should avoid charging non-profits with unexpected costs as much as possible. Unexpected bills for small non-profits “are just killer,” Bulloch says.
Bulloch says board members often have the best intentions at first. “Their hearts are big and they want to do something for the organization.”
But whether you’re working with your own board or meeting with other non-profits, you need to grasp governance. You need to know how non-profit boards work, says Bulloch. Otherwise, before you know it, you’ve got trouble.
Of course, you can’t control what other non-profit boards decide to do or how people choose to act. All you can do is try to make the right thing easy.