Wednesday, April 1, 2020

LESSON 13 – Caution! Understand the Governance Pendulum Principle

Welcome to More Lessons From the Nonprofit Boardroom Blog, a 40-week journey through the new book, More Lessons From the Nonprofit Boardroom, by Dan Busby and John Pearson. Each Wednesday, we're featuring a guest writer’s favorite snippet from the week's topic. Paul Anderson is our guest blogger this week for the first of four lessons in "Part 4: Epiphanies in the Boardroom.” And during this COVID-19 crisis, the role of the board becomes even more critical. We pray that your board will have God-honoring wisdom as you spiritually discern next steps.

LESSON 13 OF 40 - Caution! Understand the Governance Pendulum Principle
You have limited time to act when the pendulum oscillates in a positive direction.

THE BIG IDEA FROM THE BOOK: Strike while the iron is hot! In Lesson 13, the authors note that opportunities to improve a ministry’s governance are limited to certain situations and fleeting time periods. 

I’ve found this to be true. Governance structures and processes seldom change, and when they do change, the changes tend to be substantial. It’s important to know when the time is right to act.

And when the time is right, preparation is critical. You need to understand the current state of governance, what changes are needed, and have a plan to maximize your opportunities. 

MY FAVORITE INSIGHTS from Lesson 13, pages 76-81:
 Page 77: There are “three pendulum positions—resting, negative, and positive.” What position describes your organization?
Pages 78-79 identify five significant barriers to positive governance change: a status quo outlook, people who are progress blockers, no term limits, board size, and a “we can’t change” mentality. Do any apply to you?
• Pages 79-80 identify several critical things that are needed for positive governance change: knowing what changes are needed, board and CEO openness to change, and most important, when is God telling the board to change.  

A number of years ago, the ministry I led went through a reincorporation process, rewriting and refiling our governing documents. When we were done, we asked ourselves, “Now what?” 

Honestly, we didn’t really know what to do, so we did what any self-respecting organization would do: get more information and data to analyze!  

We went to an ECFA forum on Governance Essentials for Nonprofits and came back with some critical tools. First, we knew that our governance pendulum was in the positive position, which meant we were ready for change. 

Second, the ECFA forum taught us to look first for “small wins,” and then to build on the momentum from those to find bigger and more impactful initiatives that would push us forward. We did that, making a number of small changes, but eventually writing a Board Policies Manual (BPM), which has revolutionized our governance. 

Today, nearly everything—in how we govern the organization—has changed. It has been a terrific blessing and lift to our ministry’s effectiveness!


PAUL ANDERSON is president of Christian Investors Financial (CIF), a financial services organization affiliated with the Evangelical Free Church of America (EFCA). CIF offers church loans, church capital campaigns, and investment opportunities for churches and individuals. Paul has worked in Christian ministry for nearly 30 years both as a senior leader and a board member for numerous organizations and churches. He currently serves on the boards of ECFA and Cassia, a senior care organization.  

• Understand where your governance stands. Consider conducting an assessment of your board’s governance and governance pendulum. ECFA has some helpful tools for this purpose (including the NonprofitBoardScore assessment).
Consider where you can get some “small wins.” What are some obvious and easily achievable tweaks or changes you can make to your governance to generate positive, forward governance momentum?
• Visit the ECFA Knowledge Center and read and share the short chapter, “Lesson 13: Caution! Understand the Governance Pendulum Principle.”

April 8, 2020, watch for the commentary by Seng Tan on Lesson 14, “Plant a Seed in the Boardroom. Watch the Lord reap the harvest.”

BULK ORDERS: Click here. For more resources and to download the book's Table of Contents, visit the book's webpage.

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