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. Kecia Klob is our guest blogger this week for the third of four lessons in "Part 6: Boardroom Time-Wasters, Troublemakers, and Truth-tellers.” 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.
If stupidity got us into this mess, then why can’t it get us out?
THE BIG IDEA FROM THE BOOK: In Lesson 22, the authors urge boards to be actively aware of what the CEO is doing within the ministry, particularly when it comes to the budget and funding. Oversight of the CEO is crucial (and must include financial accountability) and cannot be taken lightly—no matter how much you like the CEO, or how well he/she appears to be performing within the ministry.
MY FAVORITE INSIGHTS from Lesson 22, pages 120-124:
• “Too often a ministry slowly and imperceptibly unravels for several years before the board wakes up to the reality.”
• “The first responsibility of a leader is to define reality.” (Max De Pree)
• “When a ministry becomes unraveled, it is not time for rash action. It is time to step back and review how it happened, determine corrective steps, and move ahead—all with the help of the Almighty.”
MY COLOR COMMENTARY:
What can a board do to prevent the financial unraveling of its ministry without its knowledge?
The authors suggest four ongoing, foundational commitments needed by the board to avoid a potentially devastating financial crisis in a ministry:
1) Conduct annual CEO reviews without fail.
2) Assess revenue projections regularly in preparation for financial fluctuations.
3) In a financial crisis, immediately reduce expenses and begin addressing sustainability.
4) Do not sacrifice the integrity of your ministry by using restricted funds illegally to solve a financial crisis.
The authors also point out that three of the biggest mistakes a board can make which will lead to financial instability in a ministry are: failure to diligently oversee its finances, failure to require the CEO to balance the budget, and failure to hold the CEO accountable for keeping restricted funds restricted!
In my own work on a nonprofit board I have seen there is great wisdom in the advice of the authors regarding financial accountability. It’s not always enjoyable (as a board) to be the boss of the CEO, but our responsibility is first and foremost the sustainability of the ministry and ensuring the mission is carried out effectively. So, while support of the CEO is important, it cannot be done blindly and without accountability.
THIS WEEK’S QUOTES & COMMENTARY BY KECIA KLOB:
KECIA KLOB is Board Chair of the Women’s Health and Wellness Clinic of Walton (in Georgia). She has a master’s degree in Nonprofit Management which she obtained solely for the purpose of bettering herself for service in nonprofit work. She has served passionately on the board for four years and feels privileged to serve with others who love life and want to give unborn children a chance at life and help bring healing to their families.
TO DO TODAY:
• Assess: Are there any areas where our board has neglected to hold our CEO accountable?
• Assess: Is our board fully engaged in budget oversight?
• Visit the ECFA Knowledge Center and read and share the short chapter, Lesson 22, “Whopper Mistakes Can Unravel Your Ministry.”
NEXT WEDNESDAY: On June 10, 2020, watch for the commentary by Nate Parks on Lesson 23, “The Bully in the Boardroom. The board chair, the CEO, and other board members must neutralize the board bully.”