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Why does board effectiveness matter and how do you measure it?

By the BoardClic team.

A narrated version of this blog is available at the bottom of the page

The challenge for any charity is to deliver its social mission even though resources are scarce. Having an effective board that sets a clear strategy, and ensures the charity has the right leadership, is crucial if the charity is to succeed.

Every charity will have many people that trust and rely on it and its mission. The board must treat all resources wisely and make thoughtful decisions as the need will always be greater than the resources available.

Board effectiveness and governance concerns can seem like a time-consuming distraction when what charities really want is to be delivering for people on the ground. But as the Charity Governance Code states “The board has a key impact on whether a charity thrives.”

Understanding what an effective charity board looks like and how to measure it is vital to ensuring that, in the end, the charity is making a positive impact in society.

Be clear on roles and responsibilities

If you are a trustee of a charity, you are personally engaged and passionate about the cause. You may feel that you want to get involved in hands-on work. However, you need to keep in mind that as a member of the board, your overall role is to set the strategy for the charity, make sure it has the right leadership and ensure resources are used wisely to maximise its impact whilst ensuring its sustainability. The day to day running of the charity is the job of the CEO and the management team. Have faith in the Scheme of Delegation and everyone who is a part of the organisation – you are all working for the same cause.

Every member should thrive in their roles

Charities often need to recruit trustees with specific skills. Common roles in a charity board are chair, vice-chair, secretary and treasurer. Every trustee in the board is like a pillar, and together they create the foundation of the organisation. They bring in vital external skills and perspectives and are a key part of the charity’s success.

That’s why the composition of individuals is so important in a board. Because different people with different backgrounds have their own unique experiences and knowledge. Having several perspectives leads to success if they are all allowed to thrive in their roles. The board needs to collaborate as a team, and every action or delegated assignment should always have the charity’s best interest in mind.

Ensure efficiency

To ensure clarity and efficiency within the charity, you need to have a Scheme of Delegation in place: a detailed document outlining the board’s selected duties, responsibilities, and tasks and what is delegated to management.

It is important to remember that the board bears full responsibility for every action that the charity takes, even if it is performed through a delegation.

4 steps to effective board work in a charity organisation

The right composition of board members to effectively drive the organisation forward

It is critical that the trustees on a charity board are diverse. Different backgrounds and experiences add strength and perspective. It is also important that the board reflects the communities the charity is aiming to serve. 

Aligned leadership and having everyone work towards the same goal

The board and management should always work towards the same goal. A well-organised board with shared visions, goals, plans will grow as a winning team. The big picture is about creating a better world through the charity’s mission. The board needs to have this as their guiding compass.

Clearly defined roles, expectations and tasks

You need a clear framework in place for how the board should operate and what’s expected of everyone in their respective areas of responsibility. You as a trustee must know what you are obligated to do on your own, as well as in a team together with the other board members. Remember the importance of culture and leadership when taking on big challenges as a high functioning team.

Performance evaluations for continued improvement

To ensure the board is effective, it is important to continuously evaluate board performance. The board should evaluate its own performance and consider governance expectations and best-practice. The most common factors to evaluate are diversity, experience, teamwork and effectiveness.

Regular evaluations will increase transparency and trust within the board. It will also serve as a guide to ensure that the right people are in the right positions.

Do you have the right board in place?

Do you have the right board members in your charity? Is your board truly effective? Using a data-driven, smart, user-friendly board evaluation platform like BoardClic, you can create alignment, maximise impact, and deliver on your social purpose. Learn more about BoardClic and what we can do for you.

Narrated by a member of the ACEVO staff

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