Governance Effectiveness

One of a nonprofit’s most valuable sources of energy is the leadership of its board of directors. Working in partnership with management, the governance team makes a stream of decisions shaping the future of the organization. While research shows group decision making results in better outcomes than that of individuals, reaching consensus in groups is time-consuming and sometimes frustrating.

ARI’s governance development program, The Five Paths to Effective Governance, improves the decision-making capacity of boards and senior leadership. Grounded in decades of research and experience, The Five Paths is both a diagnostic tool (through the use of ARI’s board evaluation system) and an interactive framework for thinking and talking about governance. Five Paths to Effective GovernanceUsing surveys, workshops, executive coaching, small group exercises, and webinars, The Five Paths lead board members and senior leadership through collective learning experiences.

Over the past three years, ARI surveyed boards of over 20 not-for-profit retirement community and long term care organizations. The Five Paths Board Evaluation Survey (easily administered as an on-line survey to board members) includes questions related to each of the five paths: Fiduciary, Strategic, Sensemaking, Board Learning and Group Dynamics.

Consistently, boards in all but one organization ranked Board Learning the weakest on a “strength index”. What does this mean? The Board Learning Path encompasses board development and education, board recruitment and board evaluation. Time and again these areas were weak in most boards surveyed. However, supported by the Five Path assessment and ARI coaching, each organization developed and implemented (or is in the process of implementing) a strategic action plan to improve the effectiveness of governance.

Most often these action plans include:

  • Defining the desired culture and values of the board by examining the balance of power and influence, information sharing and personal relationships among board members (as well as those with management) to understand how those forces support or detract from effective decision making;
  • Aligning board structure (including by-laws, standing and ad hoc committee functions, committee and board meeting schedule as well as re-engineering meeting agendas) with the defined culture, “new normal” fiduciary responsibilities and strategic priorities; and,
  • Rethinking board recruitment practices (including creation of board recruitment “marketing materials”), creation of standards for board member involvement (endorsed code of ethics), board orientation and ongoing board education and development (particularly developing baseline financial acuity for all board members).