Defining the Type and Role of the Board

Background

All Boards of Directors are not created equal. In fact, there are fundamental differences in how they work and how the people in them work together. Defining the type and role of your Board is essential to its functioning, since its governance features will vary according to the model that you choose.

Process

Step 1: Identify the role of your organization and Board

In no more than a sentence, identify what your organization and Board’s core competency is or will be, i.e., What is the unique activity of the organization? What is driving the organization? What can the organization do better than any other?

  • Tool 1: Establishing the Core Competency.

 

Step 2: Identify the operating values of your organization and Board

Identify the values or guiding principles that indicate what your organization and Board stand for.

  • Tool 2: Identifying the values of your organization and Board.

 

Step 3: State the operating conditions of your Board and organization

Describe what the organization will look like, for example:

  • Will it have employees?
  • Is it a volunteer organization?
  • Will it have an annual working budget?
  • Will the members of the Board of Directors be paid?
  • Will the Board be called upon to do some of the organization’s work?
    • Tool 3: 40 Diagnostic Questions to establish the organization’s and Board’s operating conditions.

Step 4: Choose the most appropriate Governance Model for your Board

For the stated role and operating conditions, choose the most appropriate Board Models from the following:

  • The Advisory Model

An Advisory Board, often called an Advisory Council acts provides advice and assistance to an existing Board of Directors and to the staff members of the organization. Without authority to govern, the Advisory Model is chosen when it requires an outside point of view on the strategy and activities of the organization, when skills are needed that aren’t available at the Board or staff levels or when additional credibility is helpful in establishing the reputation of the organization.

  • The Patron Model

Members of a Patron Board serve primarily as figureheads for fund raising purposes. Some organizations maintain a Patron Board in addition to a governing Board of Directors. Patrons are not expected to perform or participate in governance tasks such as Business Planning or Policy Development. A Patron Board could either replace or be combined with an Advisory Board or Council.

  • The Cooperative Model:

Generally for volunteer Boards, the Coop Model consists of peer management where all responsibility is shared, where there is no staff and decision making is by consensus. The Board is the single governing and managing body made up of Board members, volunteers and the clients that the organization is serving.

  • The Operational Model:

Generally for not for profit, where there is no staff, the Operational or Management Team Model consists of the Board acting as the Management Team with committees organized along functional lines, like an organization chart. Board members act as staff, become the managers and deliver programs as services. They also ensure governance as well.

  • The Policy Model

Also known as the Strategic Board Model, the Policy Model has the Board of Directors collectively establishing guiding principles and policies, providing strategic direction, delegating execution to staff, monitoring compliance and ensuring that both Board and staff are held accountable each for their respective roles. The Policy Model assumes the presence of staff to serve the operational needs of the organization.

  • Tool 4: Board Governance PowerPoint Presentation.

Step 5: Select the most appropriate profile of people for your Board:

Identify the most appropriate profile of members to serve on the Board of Directors, i.e. who are the right people to serve on the Board?

  • Tool 5: Board Selection Criteria Guidelines.

Step 6: Define your Business Model

Using the results of your analysis so far, summarize how your organization and Board should operate.

  • Tool 6: Defining the Organization’s Business Model – (sample).

Step 7: Ensure the presence of a current By-Law:

Review or develop a By-Law for the organization that clearly sets forward the requirements of the organization’s governance in line with Corporations Canada Guidelines.

  • Tool 7: Establishing or Reviewing the By-Law.

Step 8: Establish committees:

Establish the standing committees of the Board of Directors, i.e. those committees that are required from the point of view of due diligence.

  • Tool 8: Setting up Board Committees.

Step 9: Establish accountabilities:

Establish the accountabilities of the various roles to be played on the Board as well as those of the senior-most staff member.

  • Tool 9a: Setting Accountabilities; and
  • Tool 9b: Board and Staff Expectations Analysis for Governance and Management.