BMI for board practices
Monday, September 30, 2019
I recently had an ultrasound body mass index (BMI) test. BMI is derived by analyzing the mass and height of an individual.
It revealed, as expected, that I could lose some fat and build some muscle. The test reported on health and relative risk of certain diseases.
It provided me with numbers and percentages to support healthy practices. “Less fat, more protein, add a meal a day for metabolism, be sure to work out regularly.” I left with a recommended diet, enhanced exercise program and a commitment to improving health.
Governance Measures Index (GMI)
Is there a BMI for boards? Good governance can be quantified. Best practices can be measured. Let’s call it the GMI: governance measures index.
If directors know their metrics, they can make continuous improvements and use the numbers to justify change. (Recently I worked with a board that reduced their size from 230 to 90 directors, a step in the right direction.)
“Similar to Bob’s BMI, a board can atrophy and lose strength. Processes break down and results are poor. Monitoring board health will lead to performance excellence and a stronger organization,” said William Pawlucy, CAE.
Measurable Board Practices
Governance practices can be quantified and measured. This serves as a platform for continuous improvement.
Meeting Costs (people x $100 hour)
What’s the ROI for board meetings? An overly simple method to determine return on investment: Multiply the number of hours of the meeting by the number of people (staff and board) at $100 per hour = ROI.
For instance, a three-hour meeting for 20 persons equates to minimum value of $6,000. Add time for preparation, travel and logistics. Does the meeting justify the cost, especially considering outcomes?
Board Size (15 average)
Boards are all sizes for varied reasons. The average board is 15 persons. The IRS suggests the size should allow for meaningful conversation. There are pros and cons to large and small boards.
Discussion Altitude (50,000 feet)
Effective boards work at a 50,000-foot altitude to carry out their responsibilities. Committees supplement the work of the board at 25,000 feet and the staff administer at 10,000 feet. Boards should avoid doing committee and staff work at their meetings.
Most bylaws require at least 50% of the board in attendance to conduct business.
Term Limits (3 to 6 years)
There are advantages to term limits to bring new ideas to the organization and engage new persons. Most organizations have terms of three years, followed by the option of a second term and then time off the board. Officers usually serve one year.
Self-Assessment (once a year, ongoing)
Yearly, the board analyzes effectiveness, governance processes and structure for continuous improvement.
Consent Agenda (5-15 minutes)
Committee, officer and staff reports that are information-only are distributed in advance with the meeting notice. A consent agenda requires 100% of the directors read reports before the meeting.
At the opening of the board meeting, a motion to accept the non-action reports is adopted in a few minutes. Don’t get bogged down on reports that take valuable time away from mission and goals.
Advancing Mission and Strategic Goals (75% of the agenda)
About 75% of the meeting focuses on advancing the mission and goals. Print the mission and goals right on the agenda to frame discussions. Keep a copy of the strategic plan on the board table.
Strategic Plan (3-5 years)
Most boards advance a three-year strategic plan. Be leery of an annual retreat that sets priorities only for the current chief elected officer. Think longer-term for greater impact.
Agenda Development (1-2 hours)
Development of the agenda is a shared responsibility between the chief elected officer and executive director. Craft an agenda to yield significant outcomes and circulate it in a timely manner.
Performance Metrics (frequent)
Progress must be tracked. Tie metrics to the strategic plan. Report as “dashboards” — visual depictions of data and trends.
What’s Next (10-minute wrap-up)
Before adjournment the best question is, “What’s Next?” Take a few minutes to summarize deadlines and accountability to get interim work underway.
Orientation (once a year)
Directors are effective when they have the information. Provide orientation annually. It may take from 90 minutes to a half day of discussion. Distribute the governing documents or a board “playbook.”
The board needs hydration. After so much coffee and sodas (caffeine can be beneficial), they need water. Provide nutritionally sustainable foods rather than salt and sweet snacks.
“Boards around the world benefit by measuring their health in these ways. Volunteers expect to give and receive maximal value from their volunteer commitment, and these measurements help to demonstrate that,” offered Stephen D. Rosenlund, Senior Program Officer, Middle East and North Africa, Center for International Private Enterprise (CIPE).
The BMI for boards is somewhat hypothetical. The performance measures herein are real. The numbers support improved board practices and governance reform for optimal organizational health.
Well, I’ve got to get back to the gym. Thanks to coach Joe Fonseca, founding chair of Adapt and Triumph Foundation, for determining my BMI.
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