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Small orgs, big boards and the ‘corporate’ lens: how to bridge the governance-operations gap.

board engagement board recruitment board/staff relations governance design Feb 04, 2025
A black and white image of a couch that is too large for the room.

A common challenge for small nonprofits: an oversized board with little nonprofit experience. Here’s one executive director’s struggle - and some tips on how to address it.

 

Here’s the story:

Our Board is twice the size of our staff team and none of our board directors have non-profit experience. This has led to all sorts of problems. They don’t understand the “business” of the organization (as they try to govern through a corporate lens), or the day-to-day impact their decisions have on frontline staff and volunteers. The disconnect between the Board and the organization has been going on for over a decade, and has led to some serious consequences, including a concerning deficit situation. We need people on the Board who are equipped to lead a nonprofit, and help us out of this mess. What can I do as an ED to reshape the board into a team that supports, rather than hinders our organization?

 

And here’s my take:

Why do small organizations end up with oversized boards? And what happens when your board directors just don’t ‘get’ the nonprofit world? These are two common governance pain points that can create some big constraints in any organization. Let’s break each of these issues down before talking about how to kickstart a board reset.

 

Why bigger isn't better when it comes to nonprofit boards

There’s no blanket statement I can make about the ‘right’ board size. But if we’re talking about an organization that has less than ten staff (like 70% of charities in Canada) and a budget under $1 million (like more than 75% of charities in Canada), is a board of ten, twelve or sixteen (!) directors really necessary? Is it functional? In most cases, I think the answer will be no - on both counts. 

I don’t think that ‘bigger’ is necessarily better when it comes to boards, and often, smaller boards are more functional and effective. Those who disagree will usually point to the value of large boards as a reservoir of volunteer capacity for small organizations, or as an enabler of more diverse leadership. But bigger boards rarely lead to gains in operational capacity for small organizations, they just become bottlenecks for middle ground decision-making. And given the overwhelming whiteness of charity boards in Canada, the argument for diversity is not very compelling. 

So why are boards so big? Mostly because it’s a convention that has been written into too many bylaws; but this convention can and should change if we want to have more effective and sustainable governance in the sector. A smaller board is more engaging, requires less effort for recruitment (and can be more selective with directors), and can still manage all of the board’s core governance functions effectively. Not every board needs to recruit a lawyer and an HR expert and a marketing professional, since specific skills and expertise can be sought out as needed. And governance roles that are better suited to those with operational expertise or deep community knowledge can be located elsewhere in the organization, monitored by the board. This is an approach I call the ‘minimum viable board model’, and if it sounds like a good fit for your organization, you can learn more about it here.

 

How to navigate the disconnect between a ‘corporate’ leaning board and a nonprofit organization.

Let’s address the disconnect between the board and the nonprofit - what you refer to as the ‘corporate lens’ (just a quick annoying note to say that nonprofits are corporations too - but I know what you mean). I believe that anyone can serve on a nonprofit board, if they’re provided with the right kinds of training and support. An understanding of the norms and culture of the nonprofit sector is very useful, and perhaps essential, for anyone leading a nonprofit organization - whether you plan to work within those norms or reject them. When helping people understand how to apply skills and knowledge from the for-profit world in the nonprofit context, I have often used the analogy of driving in a foreign country: you may be able to operate a vehicle, but you don’t yet know the rules of the road. 

That doesn’t mean that every board director needs to be an expert in nonprofits. But it does mean that every board should acknowledge the value of nonprofit expertise, and seek it out as needed. The good news is that many boards have an ED or CEO who can provide this in-depth context; the bad news is that many boards dismiss or devalue their executive staff’s expertise. Recruiting board directors with direct work experience in the nonprofit sector is one way to bring this perspective to the board, but I think we can do a better job of helping all board volunteers understand the realities of the sector. Board orientations should include training and resources on topics like charity mindset, funder dynamics, and structural issues in the nonprofit world. 

Sometimes when we talk about a ‘corporate’ lens, what we’re really talking about is a clash of values. Organizations may be built on, say, collectivist values or a social justice orientation, but when those values aren’t articulated and activated, it’s easy to wind up with board directors who have a more individualistic or transactional approach. It’s worthwhile to really clarify and codify important organizational values, and bring that lens to board recruitment. Gaps in skills or knowledge can always be addressed through training or accessing external expertise, but it’s much harder to navigate a mismatch around values. 

 

How to reset a disconnected board that is getting in the way of the organization

Most nonprofit boards are full of smart, competent, awesome people. Board volunteers step up to take on a big responsibility, usually without a lot of support, and often just because they want to help their community in some way. But despite the competencies and good intentions of board volunteers, a good many boards end up working to constrain their organization, rather than enable it. And a good many EDs end up spending a lot of time trying to figure out how to reset their board. 

Over the long-term, my advice is to think about how to redesign your governance system to meet the needs of the organization in a functional and sustainable way. But since it’s difficult to do long-term generative work when you’re dealing with pressing challenges today, I’m going to focus on some leverage points that you might be able to use in the short-term.

 

  • Open a dialogue with the board. If you haven’t already, I recommend having a frank conversation with the full board about your concerns related to governance and finances. Name the real problems, clarify the stakes, and clearly state what you need from the board. Is it a shake up of the finance committee? A review of the annual budget? A five year financial plan to move out of deficit? A budget for a fractional CFO? Be as specific as you can, and do it on the record. You may be tempted to have this conversation offline with the board chair or treasurer, but it’s important to ensure that the entire board understands your concerns, why they matter, and what action they can take to address them (chairs and committee chairs often filter and gatekeep sensitive information!). Sometimes problematic power dynamics or a poor relationship with the board can make it difficult to have these kinds of conversations, but when you are worried about your organization’s governance or finances, you have an obligation to take your concerns directly to the board.

 

  • Take charge. When the organization is in crisis or off-track, we want to look to the board for leadership. But sometimes the best thing you can do as an ED is to take charge. Present a solution (or two or three options) to the board that guides the organization forward. Either they’ll applaud you and feel relieved that their ED is showing such great leadership, or they’ll push back. But if they reject your plan, or fail to support you in implementing a solution, address it directly. See my comments on opening a dialogue above, and ask the board for an alternate solution, or specific decision-making criteria you can follow. 

 

  • Deepen governance literacy. Sometimes boards fail to act, or do the wrong things because they simply don’t know how to be helpful or constructive. Providing governance training or strengthening policy and process can be a good way to help a board step up their effectiveness. Starting with education or infrastructure around board roles and financial oversight might be a good place for you to start.

 

  • Get external support. Boards and EDs can get into stalemate situations that are hard to resolve. Bringing in an external set of eyes can help uncover the root of an issue, draw attention to gaps or risks, and create momentum for change. A financial advisor, a governance assessment, or even a mediator might be helpful to kickstart some renewal in your organization’s governance.

 

  • Make the most of recruitment. Although I am a fan of smaller boards, sometimes you have to go big before your board can get better. If you can, you may want to max out your board size with some new recruits who have the values alignment, leadership orientation and competencies that your organization needs. New directors can interrupt existing power dynamics and fresh perspectives can open up space for change, which may put you in a position to think about that longer-term governance design work (and eventually, transitioning to a smaller board!).

 


 

Big Takeaways:

  • When it comes to nonprofit boards, bigger isn’t better. Smaller boards can be just as effective - or even more so - with less drama and management.

  • Boards need a better understanding of nonprofit culture and norms - whether we choose to work within those norms or reject them.

  • Effective governance requires honest conversations. Name the problems you’re concerned about, engage your board with specific requests, and lead the way toward a solution.

     

 

 

 

 

 

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