Importance of Board Governance

With shrinking public money, greater demand for services, exposure to liability, stronger accountability and questioning of the nature of charitable work, the voluntary sector must enhance their capacity to increase the credibility and effectiveness of the sector.

Boards of Directors have to be accountable to their membership, funders and stakeholders. As well, they need to learn how to work effectively and efficiently.

Boards of voluntary organizations whether new, established or in transition, now have a range of choices about how to work together to fulfill their role.

Boards must make a decision about its structure based on three basics questions:
1. Which decisions does the board want to make and which do they want to delegate?

2. How much involvement does the board want to have in the operations of the organization?

3. How will the reporting relationship between the board and the staff be defined?

Based on the response of those questions, four possible board models are suggested:
1. Policy Board

2. Policy Governance Board

3. Working or Administrative Board

4. Collective

Each organization needs to take the time to decide on a board structure that best meets their needs. To assist you in deciding what board model suits your organization’s best interests, please visit the Board Models Comparison Chart Matrix.

Models are only half the picture...

The effectiveness of a board depends on both the model selected and the people on the board.

Systems alone do not ensure a good board. The key elements on the human side of board effectiveness are:
• commitment

• competence

• diversity

• collective decision-making

• power

Other areas of importance to consider are:
• Policy development and the establishment of an organization’s mission, vision, and direction

• Fiscal responsibility to ensure financial health and organization

• Appropriate human resources and performance management

• Evaluation and control

• Succession planning

• Direct Organizational Operations

• Effective Community Relations