9 Nonprofit Board Governance Mistakes (And How to Avoid Them!): Part 2

If you missed the first part of our series on resolving board governance issues related to strategy, finances, and compliance, you can access it here: 9 Nonprofit Board Governance Mistakes: Part 1

In this second installment of our two-part series, we are going to pick up right where we left off. Our own Ed Rogan lends his more than 25 years of experience to talk about the most common board governance mistakes. ​

Wooden block with “Governance: Part 2” on it surrounded by other organization-related icons.

This time, he is going to cover governance mistakes related to people and processes. Find out what he has to share from his expansive career:

5. Allowing Unethical Behavior to Occur
The Problem:
Allowing unethical behavior to occur within a nonprofit organization is a critical governance mistake that can have far-reaching consequences. It undermines the organization's integrity, erodes trust among stakeholders, and can lead to legal and reputational damage. Unethical behavior can take various forms, including conflicts of interest, financial misconduct, violations of ethical standards, and HR issues (for example, racism, discrimination, and sexual harassment).

The Fix:
To avoid this mistake, nonprofit boards must prioritize ethics and integrity in their governance practices. Preventing unethical behavior requires a proactive and comprehensive approach from the board to create an environment where unethical behavior is less likely to occur.

First and foremost, the board should establish a strong ethical framework and code of conduct that clearly outlines expected standards of behavior for all individuals associated with the organization. This code of conduct should explicitly address conflicts of interest and provide guidelines on appropriate behavior and decision-making. To prevent unethical behavior, and ensure that the organization operates with the highest standards of governance and ethics, nonprofit boards must also:

• Actively promote a culture of integrity.
• Expect board members to serve as ethical role models.
• Provide regular ethics training to board members.
• Put robust policies and procedures in place to address misconduct, protect whistleblowers, and ensure transparency.
• Establish open communication channels to encourage reporting of unethical behavior.
• Conduct regular audits and external assessments of the organization’s practices.

 
6. Unengaged or Complacent Board Members
The Problem:
When board members are not actively involved in the organization's mission, governance, or resource development, it can hinder the board's effectiveness and the overall success of the organization. This can manifest in several ways, such as board members not attending meetings regularly, not actively participating in discussions, or not contributing their expertise and resources.

The Fix:
Nonprofit boards should take proactive steps to ensure that all board members are engaged and actively contributing to the organization's mission. By actively addressing unengaged or complacent board members, nonprofit boards can harness the collective power and expertise of their members, leading to more effective governance and increased impact in advancing the organization's mission. To engage board members organizations should:

• Clarify expectations for board members.
• Strategically recruit individuals who align with the organization's mission.
• Provide comprehensive orientation and training.
• Regularly evaluate board member performance.
• Foster a strong relationship between the board and the Executive Director/CEO.

 
7. Failure to Prioritize Diversity and Inclusion
The Problem:
When boards lack diversity in terms of race, ethnicity, gender, age, and other dimensions, they miss out on different perspectives, experiences, and expertise that are crucial for effective decision-making and organizational success. This can lead to a narrow focus, limited innovation, and a disconnection from the communities the organization serves.

The Fix:
By prioritizing diversity and inclusion within the board, nonprofit organizations can benefit from a wider range of perspectives, improved decision-making, and enhanced relevance to the communities they serve. It also demonstrates a commitment to equity and social justice, which is essential for achieving long-term impact. To prioritize diversity and inclusion within nonprofit boards, organizations should:

• Assess the current state of diversity.
• Set specific goals for improvement.
• Actively recruit diverse candidates.
• Foster an inclusive board culture.
• Provide diversity and inclusion training.
• Support board member development
• Engage with diverse communities.
• Regularly review and revise policies and practices to promote diversity.
• Hold each other accountable for progress.

 
8. Micro-Managing Staff and Operations
The Problem:
Micro-managing occurs when nonprofit boards excessively involve themselves in the day-to-day operations and decision-making processes that should be the responsibility of staff members and management. This can lead to a lack of trust, reduced staff morale, hindered innovation, and decreased overall organizational effectiveness. Micro-management also prevents board members from focusing on their strategic governance role.

The Fix:
By shifting the focus from micro-managing to strategic governance, nonprofit boards can maximize their impact and effectiveness. This approach allows staff members to thrive, promotes a culture of trust and empowerment, and ultimately leads to better organizational outcomes. To avoid micro-managing staff and operations, nonprofit boards should:

• Define clear roles and responsibilities.
• Delegate authority to staff members.
• Foster a culture of trust and support.
• Shift their focus to strategic governance.
• Engage in regular self-assessments.
• Establish effective reporting mechanisms.
• Provide ongoing education and training for board members.
• Encourage open communication and collaboration between the board and staff.

 
9. Ineffective Board Meetings
The Problem:
Conducting ineffective meetings can hinder the productivity and decision-making of nonprofit boards. Ineffective meetings can result in wasted time, lack of engagement, and poor communication among board members. Issues such as unclear agendas, disorganized discussions, and a lack of follow-up on action items can contribute to unproductive meetings.

The Fix:
Efficient meetings contribute to better governance outcomes and enhance the overall effectiveness of the board in fulfilling its responsibilities. To establish best practices for conducting productive and efficient meetings nonprofit boards should:

• Create clear agendas with specific objectives and share them in advance.
• Encourage active participation.
• Create an inclusive environment where diverse perspectives are valued.
• Stick to time limits to ensure focused discussions and manage the conversation effectively.
• Follow up on action items by documenting decisions and assigning responsibilities.
• Continuously evaluate meeting effectiveness through feedback and surveys to make improvements that align with the board's needs and maximize productivity.

As a reminder, if you missed the first installment in our series on board governance mistakes related to strategy, finances, and compliance, you can check it out here: 9 Nonprofit Board Governance Mistakes (And How to Avoid Them!): Part 1

When you need nonprofit board advisory help, please contact us! Whether you are dealing with governance mistakes, board turnover, or leadership conflicts, we can come alongside your organization to help it resolve its internal issues without taking anything away from doing the work your community depends on. Our team of highly experienced nonprofit leaders has the depth and breadth of knowledge required to help your board overcome any challenge it is facing!

About the Author
Ed Rogan - Partner & Search Practice Leader, Valtas Group

Ed Rogan is a human resources professional who has been connecting people and mission for over 20 years. Equally equipped with analytical and communication skills, he has a knack for quickly grasping a situation, connecting with varied personalities, and understanding business issues.
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Ed’s search philosophy takes a highly collaborative approach in partnering to recruit and develop leaders for mission-centered organizations. His work over more than 25 years has involved a range of diverse projects that provide him with opportunities to continuously learn and develop as a professional. Over the years, Ed has helped a wide range of organizations recruit and select CEOs, Executive Directors and other Director level professionals, many replacing long-term, highly respected leaders.

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