Understanding the Business Owners on Your Board—Governance

Has this ever happened with one of your new Board members? 

Bob, a local business owner, was excited to begin his term on your Board.  He came to every meeting and participated enthusiastically in Board discussions.  He had a lot of new ideas.  After a while, though, Bob’s busy schedule got the best of him.  When his term was up, he politely declined to renew.

What happened?

Maybe Bob was really too busy to continue on your Board, but business owners make time for the things that are important to them.  Maybe Bob disengaged for some other reason.  Was Bob’s Board experience what he expected?    

Business owners are accustomed to calling the shots.  In their office, when they talk, people listen.  They get input from their professional advisors, they consider their options and then they make a decision.  Once they decide, that’s it.  Their company moves in that direction.  They’re comfortable being in control.

Business owners are extremely capable individuals.  They’re effective, efficient and confident.  However, the same qualities that make them successful in their businesses, can create sticking points when they serve on your Board. 

In a nonprofit, big decisions are made in a very different way–by vote.  Everyone gets a chance to contribute their thoughts, everyone listens, but then the Board votes.  The decision may go your way, or it may go against what you recommended.  That’s how nonprofits work. 

This dynamic can leave the business owners on your Board feeling unappreciated, discouraged or even angry.  They’re uncomfortable with not being in control of the outcome and they feel as if their ideas have been rejected.  When this happens, it’s a bad experience for them, and an unfortunate loss of positive energy for your organization.  It’s really important that you find a way to address this perception so that you don’t lose valuable Board talent. 

What can we learn?

Business owners can be some of your most capable Board members.  How can you help them apply their experience, skills and knowledge in the nonprofit environment?

Support nonprofit leadership programs.  Business people who want to make a difference in their community will invariably do so by serving on a nonprofit Board.  Encourage a leadership development program in your community that includes a nonprofit component, to help emerging business leaders become effective nonprofit leaders.

Board orientation.  Help reinforce your Board members’ understanding of their role and responsibilities including:

  • your nonprofit’s bylaws, how your Board makes decisions, how you conduct your meetings,
  • management’s role and responsibilities,
  • the fiduciary responsibilities of Board members, and
  • how management supports Board oversight.

Be your Board Chair’s ally.  Help structure meeting agendas to allow for ample discussion of issues.  Provide background information to Board members in advance for their review. 

Allow time for compromise and consensus.  Consider planning an open discussion of an issue at one Board meeting, while saving the vote for the next meeting. 

Foster a climate where Board members feel comfortable expressing differing ideas.  Agreeing with everyone accomplishes nothing.  Those on opposite sides of an issue will just dig in their heels if you let them think everyone else agrees with them.  Board members can only work collaboratively when they know where other people stand.    

We discuss Board governance in our financial leadership seminar, Financial Leadership Training for Emerging Nonprofit Professionals; Alexandria, VA, November 7-8, 2018.  

By the way, your CFO will soon be implementing new GAAP.  Tell her about our in-depth seminar, Financial Intensive Training on the New Financial Reporting GAAP—Remodel Your Financials—an in-depth look; Alexandria, VA, November 2, 2018.  

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