LESSON 28 – Defending Risks Everywhere Is Not a Strategic Plan

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. Mike Clabaugh is our guest blogger this week for the first of four lessons in "Part 8: Boardroom Worst Practices.”  And during this COVID-19 era, 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 28 OF 40: Defending Risks Everywhere Is Not a Strategic Plan
You must discuss the risk elephant in the boardroom.

THE BIG IDEA FROM THE BOOK: In Lesson 28, the authors make the point that all organizations take risks but, sadly, too many boards do not have an effective, proactive approach to discussing and identifying the significant risks they face. 

There are several reasons why risk assessment seldom gets onto the board’s agenda, but the result is the same. When not planned for in advance, the crisis, when it comes, will exact a high price for the organization having been poorly prepared.  

MY FAVORITE INSIGHTS from Lesson 28, pages 152-156:
• “Fortunately or unfortunately, the one predictable thing in any organization is the crisis. That always comes.” (Peter Drucker)
• Which reminds me of this: “It is not enough that we do our best; sometimes we must do what is required.” (Winston Churchill)

MY COLOR COMMENTARY:
Don’t let these reasons cause your board to ignore, overlook, or simply never get around to assessing and prioritizing the most critical risks your organization faces:

1. We don’t ever put it on our agenda, so we never discuss it.
2. We assume we have no risks.
3. We assume all risks are equal.
4. We fail to get input on risks from the staff.
5. We don’t budget for risk mitigation, so we don’t talk about it. 

THIS WEEK’S QUOTES & COMMENTARY BY MIKE CLABAUGH:

MIKE CLABAUGH is the Founder, retired President and CEO, and current Board Chair for TenfoldBPO, an organization that provides back‐office services to multiple faith‐based not‐for‐profits. Tenfold generates economies of scale and operational efficiencies so that the money saved can be directed toward Kingdom work. Mike now provides board governance training and consultancy services to a broad range of Christian nonprofits and Christian-owned for-profit organizations. Contact him via email by clicking here.

TO DO TODAY:
• Add risk assessment to the agenda for the next board meeting and keep it on the agenda until a satisfactory plan has been developed and put in place. 
• Ask the CEO to bring staff input to the discussion with the board.
• Visit the ECFA Knowledge Center and read and share the short chapter, Lesson 28, “Defending Risks Everywhere Is Not a Strategic Plan.”

NEXT WEDNESDAY: On July 22, 2020, watch for the commentary by Steve Moore on Lesson 29, “The Two Enemies of Sound Board Decisions. Avoid being pressed for time and making major decisions remotely.”

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