Addressing Board Knowledge Gaps

For better decisions and better governance!

While some Boards may believe they can make decisions and govern primarily on the basis of their collective experience as members and volunteers of the organization, the reality is much different.

Boards need knowledge to assist them, for example, in their monitoring and accountability roles, in improving governance processes, in strategic planning, for making better decisions, and to understand member needs.

Monitoring and Accountability

This is an area where most Boards need assistance.  Many Boards have insufficient understanding of the financial aspect of their role. They depend too much on the staff of the organization to interpret the financial performance of the organization. The recent corporate governance problems highlighted a similar problem with corporate Boards.

In our experience, many directors do not understand the role of the auditor and the audit vis-a-vis the Board's fiduciary responsibilities.  For more on this, see our archive articles -- What Do You Really Get With an Audit?, Setting Up an Audit Committee and Questions for the Audit Committee to Ask the Auditor.

Boards should not depend solely on the external audit and the staff as their source of monitoring information. Other types of audits and reviews should also be periodically employed, such as a statutory compliance audit (to determine whether the organization is meeting it statutory and legal responsibilities) or a policy compliance audit (to review whether the Board's policies are being followed).

In addition, the Board should be dealing directly with legal counsel on specific matters (Board's legal responsibilities), and not delegating that interaction.

All of these initiatives build the Board's knowledge base so that they are more competent to fulfill their responsibilities.

Governance Processes

Boards need help if they want to improve the way they function and operate.  While some individual Board members may have extensive experience with governance, many do not.  In addition, the performance of a particular Board requires not only individual expertise but group expertise. The Board must work together, and that may mean they need training and development, advice, and in some cases, someone to assist them with specific tasks.

In particular, the practice of copying another organization's governance policies and processes often results in superficial understanding of the application in their organization, and hit-and-miss compliance.  The policies and processes become a pain that they work around, rather than effective tools to improve performance.

Strategic Planning

If we can, we go into association planning sessions with two consultants...one who facilitates and the other serving as a quasi-participant and resource expert. Boards who have experienced this approach like it because it brings a better result in less time.  The Boards can address questions they have and lack of knowledge immediately.

Associations also do not do enough research...about the environment and the trends, and about the membership's needs and value perceptions.  Boards may feel they know the membership, but quality research is far more accurate and reliable.

Increasingly, Boards are setting performance requirements, policies and executive limitations that require research to occur.

Decision-making

Another approach we find works exceptionally well with association Boards is the use of background papers.  When Boards are wrestling with an issue, they have engaged us to develop such papers to increase the common knowledge level and improve the quality of the discussion and the decision.  Examples of such topics in recent client assignments include the role of the CEO, bylaw better practices, national-provincial structures, and understanding non-profit and charity tax status. The papers are typically of short to medium length, and focus on increasing Board knowledge prior to consideration of the issue. 

Depending on the issue, Boards may also need presentations, in-depth research related to this particular issue, or professional advice to assist them in making the decision.  Staff can be a source of such information, but in some instances, an external neutral source is preferred.

Member Needs

Boards typically do not have a good understanding of member needs.  And, satisfaction surveys may have their place, but they are not a substitute for member needs research.

If it was as easy as asking members what they need, associations everywhere would be delivering value.  But members don't usually know what they need so they can't tell you.  High-quality member needs research can bring valuable knowledge to the Board table.

Eliminate the Knowledge Gap

Proactive Boards will need to seek out ways to address gaps in Board knowledge. A new governance approach (or model) may improve Board performance, but the quality of its work and decisions is also heavily dependent on the skills, competencies and knowledge of the Board.

Wayne Amundson is president of Association Xpertise Inc., a consulting firm serving associations and non-profits. He is also a writer and speaker on association and non-profit management and governance, and is editor of The Canadian Association e-zine and co-author of the new “Primer for Directors of Not-for-Profit Corporations” published by the Industry Canada and three non-profit umbrella groups in Canada. 
Phone: 403-374-1822 E-mail: admin@axi.ca  Website: www.axi.ca