Friday, June 10, 2011

Board Fix: Capture Self-Interest

There is no shortage of articles, blog posts, and consulting hours devoted to the topic of improving board performance. The problems of low meeting attendance, a lack of effort and energy in making strategic decisions, and poor fundraising returns are among the complaints about boards.

A suggestion I make to students about boards is that board performance can be enhanced if members were more deeply engaged in learning about the social problem the nonprofit addresses and in exploring solutions. This could be more invigorating than suffering through yet another round of hearing staff reports and reading over poorly understood financial statements.

However, I think I have overlooked something very important: self-interest. Perhaps boards will be more engaged and higher performing when members are self-interested. I don't mean self-interested in the usual "duty of loyalty" (i.e. conflict of interest) manner, but self-interested in the mission of the nonprofit.

Here's an example. Let's say that Westside Community Development Corporation (WCDC) exists to improve the physical and social capital of the Westside neighborhood in Anytown, USA.

If I live in Westside, then I am very interested in whether WCDC is successful or not. My neighborhood quality of life (menacing, unleashed dogs roaming, property values, all night parties) may be at stake or perhaps the value of my home.

If I work for another nonprofit that works closely with and is affected by WCDC's performance, I have a stake.

If I'm the leader of a faith community in the Westside neighborhood, then I have a stake. And so on.

But too often, nonprofit board members don't have a direct stake in the nonprofit. They may be passionate about the mission and hope that the nonprofit will succeed, but at the end of the day, their personal and/or professional life is unaffected if the nonprofit doesn't succeed.

Maybe we need to comprise nonprofit boards with people who have something at stake in the nonprofit's success and figure out other ways that people who are simply passionate, but not self-interested, can play a role.