Building Effective Relationships Between Management and the Board of Directors
By Brenda DeCosta, Partner, Assurance Services
There is no clearer message sent to employees of an organization than the one that is delivered through the tone from the top. “The top” includes the executive director, director of finance, administration and management, and also the board of directors. The dynamic between management and the board can heavily influence an organization’s overall culture. An effective relationship between management and the board is critical to achieving a nonprofit’s mission.
The basic role of management and the board of directors is to manage and govern the organization. This is best accomplished through leadership and collaboration. While mutual professional respect should prevail, a certain amount of challenging and questioning each other is healthy. This shows that leaders are paying attention, prioritizing the organization’s best interests, and working together rather than relying on a single individual’s input. This structure helps ensure the integrity and reputation of the nonprofit.
A system of formal policies is essential in establishing defined roles, responsibilities, and expectations. The governing structure serves as a way to communicate processes while management and the board ensure they are followed consistently.
At times, the relationship between management and the board of directors may need adjustment. Common warning signs include:
- Board meetings are dominated by one or two individuals.
- Lack of board training.
- The executive director runs the meeting and the board approves motions with little or no discussion.
- High employee turnover.
- Outdated policies and procedures.
- Form 990 is not reviewed by the board before filing.
- The direction and vision of the nonprofit have expanded but the board composition has not.
- Financial and program performance reports are not available.
- Overall lack of accountability and transparency.
Developing and maintaining a strong, positive relationship between management and the board of directors requires continued commitment from all parties. A culture in which board members and management are passionate, involved, inquisitive, and supportive of accountability and transparency signals a collaborative effort to support a successful nonprofit.