Non-Profit Governance Dialogue

The current economic turndown is credited with suppressing corporate director resignations (2010-2011) among more than 500 significant companies, one of three reasons for the smallest number of new executives joining boards in 10 years, according to a recent Spencer Stuart governance survey.  The report appeared in Pensions and Investments (11/4) and was reported by the National Association of Corporate Directors (NACD) 11/7.

Motivations for turnover in the world of nonprofit boards differ, of course, but nonprofit organizations should be aware that the changes in public company culture could influence those who also sit on nonprofit boards.

Among the other reasons for fewer new directors (294) in the last decade, which Spencer Stuart said “challenged board renewal” were 1) downsizing on boards, and 2) increases in the mandatory retirement age.  (In addition, public company directors are discouraged from holding more than five board seats.)

With director pay in the top 200 public companies averaging $240,000 (cash and stock) a year (total board compensation plus total committee compensation), it is understandable that a number of directors (for whom service on multiple boards is their middle years career) don’t want to relinquish such income.  The compensation average for directors serving with public companies with lower revenues, with about 300 companies in each category, is less: 1) large ($2.5B - $10B), $188,000, medium ($1B - $2.5B), $172,000, small ($500M - $1B), $143,000, and micro ($50M - $500M), $101,000.  (NACD Director Compensation Report, 2010-2011, in collaboration with Pearl Meyer $ Partners.)

As well, Towers Watson has reported that the annual board director “fixed” retainer is replacing board meeting fees (from 62% of firms in 2004 to 36% in 2010); committee meeting fees have decreased 64% - 40% during the same period.

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I was privileged to be interviewed on “overcoming boardroom challenges” in The Glass Hammer, 11/30/11, an online community for women executives in finance, law and business  (bit.ly/tizkwk).

My advice to women seeking board service was to prepare as should any man: 1) understand effective governance cultures, especially roles and responsibilities, 2) study the group under consideration, its track record, focus, etc., plans, policies and procedures, 3) plumb the expectation of directors on that board (200-300 hours of work, fundraising, etc.), and 4) be certain on one’s own expectations/intentions regarding accepting the demands of such board service.

Too few organizations are clear regarding their expectations of board directors and, therefore, select/nominate poorly.  Conversely, too many potential nominees blindly accept board invitations without understanding the demands and consequences.

Your association may have been one of the reported 200 nonprofits invited to the White House “Initiative for Nonprofit Talent and Leadership” planning session convened 11/15/11 at Red Cross Headquarters.  Then again, if your strategic objectives on behalf of your industry/members are clear and you resist euphemistic great good intentions as your raison d’être, probably not.

I saw notice of a “nonprofit group meeting” on, I believe, the American Express website “Open Forum – Small Business Week in Review,” so I was interested.  AmEx turns out to have been a meeting sponsor, coincidentally.  If the meeting was covered by the media I missed it. 

I well remember during the Ford and Reagan administrations when 200-300 associations would be invited by Red Cavaney, then at the White House during those times, et al., to participate in briefings to understand the presidents’ agendae.  On returning to headquarters we would flash our board that, yes, we do matter; today, attendees at such meetings likely text their boards on hitting the street.

This invitation-only gathering out of the White House Office of Social Innovation and Civic Participation and the Office of Faith Based and Neighborhood Partnerships (which includes centers in 13 Federal agencies) was of a different stripe, I suspect.  The goal was to “promote diversity, develop talent, and equip (NP) leaders, spurring governments to spend more (emphasis added) on leadership training.”  Are any of these apparently benign objectives imbedded in your strategic plan?

Among the groups sponsoring this public service/community development gathering were the Center For Creative Leadership, Public Allies, Commongood Careers, Achieve Mission, Service Nation, Atlas Corps, Network For Good, and the Corps For National and Community Service (which embraces the Senior Corps, AmeriCorps, and Learn & Serve), names which fall easily from one’s lips, I’m sure.  Big oaks from little acorns grow.

The sponsor group also included the Aspen Institute, the Annie E. Casey Foundation, and the Independent Sector.

Devoted to “investment in human capital,” this gathering was keynoted by Melody Barnes, Director of the White House Domestic Policy Council, and was addressed by White House key official Valerie Jarrett, as well.  In break-outs and other sessions, the groups were charged “(1) to define actionable goals and (2) commit to viable, high impact strategies.”  There is to be a follow-up in May, 2012; materials did not comment on that timing.  (I didn’t see a report on the meeting on the White House website.)

It may interest you to know more about some of the sponsoring groups:

The Center For Creative Leadershp’s “mission gives (it) an unusual flexibility in a world where profit motives (emphasis added) often drive or confine thinking. . . we have the freedom. . . to develop leaders. . . for the benefit of society – worldwide.”  Commendable.  But, there’s that backhand swipe at that pesky “P” word, again.

The Public Allies (Chicago) office, if memory holds, is where the First Lady worked before assuming her executive position at a nonprofit hospital.  It works with AmeriCorps in coordinating 10-month training programs for full-time, paid, 18-30 year old “apprentices” so as to develop “passionate” social change makers “through a recognized approach. . . rooted in a practice of values.” 

Commongood Careers is a clearing-house for public service positions such as the one it featured for the Washington, DC based Free The Slaves organization.  Says (FTS) “(it) knows that slavery flourishes when people cannot meet their basic needs and lack economic opportunity, social protection and knowledge about (their) ability to exercise their rights (emphasis added).  We (FTS) know that a holistic approach is required to eradicate slavery and we believe it is possible to end slavery in our lifetime.”

The association/society community empathizes with social/economic needs and supports efforts to teach men/women “how to fish.”  Whether the organizations above embrace such long term investments or more readily subscribe to the in vogue “can’t wait” tempo of the White House, is anyone’s guess.

If you did attend the day long meeting we’d be happy to share your observations.

The current economic turndown is credited with suppressing corporate director resignations (2010-2011) among more than 500 significant companies, one of three reasons for the smallest...

I was privileged to be interviewed on “overcoming boardroom challenges” in The Glass Hammer, 11/30/11, an online community for women executives in finance, law and...

Your association may have been one of the reported 200 nonprofits invited to the White House “Initiative for Nonprofit Talent and Leadership” planning session convened...