NFP board service tips

After serving two years as board president of the Delta Mu Delta honor society for business administration majors, I surveyed 25 others who served on not-for-profit boards. Here are lessons learned.

Allocate the appropriate amount of time to the job. Board service should be taken seriously like any other job. Done right, this will take more time than you might think. Make sure you have enough time while also making time for your family. To serve effectively, you must be able to attend every meeting without leaving early for something that you might consider more important. You need to focus on those being served and not on yourself.

Approach the task with an open mind. Board members should speak up when necessary and debate matters in a supportive, even-spirited way. Compromise can be a good thing and may be necessary to bring about progress. Several survey respondents emphasized the importance of teamwork and being gracious to those with differing opinions, and learning how to disagree without being rude or condescending.

Stay true to a board’s broad role in governance. Board members should maintain broad oversight, which means avoiding involvement in day-to-day operations, leaving managing to management, and focusing on the broader entity without getting “into the weeds” on issues.

Handle core governance activities. These include preparing succession plans, working with management to develop strategy, establishing charters, and enforcing mandatory rotation policies and term limits. The importance of succession planning particularly hit home for me after the unexpected death of Delta Mu Delta’s executive director.

Watch for indicators of fraud and questionable activities. Although none of those surveyed said they had encountered outright fraud, several observed questionable activities. These included improper loans to management, taking advantage of poorly written reimbursement policies, conflicting relationships, decisions made contrary to policy, and incompetence that led to a change in financial leadership. When these situations arise, board members have a responsibility to make sure the problems are properly addressed.

Cover your bases. Recruiting at least one lawyer to the board will help with legal issues that inevitably arise. Perform your duties with confidence and peace of mind by verifying that the organization has sufficient director and officer liability insurance.

Use the experience to build leadership skills and judgment. Serving on a board gives you the opportunity to watch others apply their thoughts and judgment to situations. Getting involved provided me with leadership opportunities in a variety of roles much sooner than I would have otherwise experienced them. Today, I encourage my students to get involved either professionally or with a local not-for-profit organization as soon as they graduate. Many feel compelled to give back, and I remind them that this can help them gain valuable experience at an early age.

—By Perry Glen Moore, CPA, CGMA, Ph.D. (perry.moore@lipscomb.edu), a professor of accounting and director of graduate business at Lipscomb University in Nashville, Tenn.