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How to select good board members for your not-for-profit

02/22/2017  |  By: Chad Milom, CPA, Shareholder, Audit and Advisory

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If you’re looking for proof that it’s critically important for not-for-profit organizations to have a strong, highly engaged board, look no further than the story of Hershey Company, the chocolate maker.

The not-for-profit Hershey Trust Company holds a controlling interest in the Hershey Company, and its board became the focus of a widely publicized controversy over allegations of self-dealing and lax governance at a time when another company was pursing an ultimately unsuccessful attempt to buy the chocolate company. The board eventually agreed to a substantial reorganization under a settlement with the Pennsylvania Attorney General’s office.

Few not-for-profit boards control multibillion dollar investments like the Hershey Trust, but their oversight and actions are just as important to the success of their organizations. Selecting good candidates for board seats is a critical step in achieving good governance.

Goodwill Industries of Middle Tennessee is one of Middle Tennessee’s largest nonprofit organizations.  With over $75 million in sales of goods donated by the community in 2015, Goodwill was responsible for the employment of approximately 15,400 jobs during that year, including external job placements and its own employees. Goodwill Industries of Middle Tennessee has long recognized that one key to thriving in our community is the development of a strong board to help provide the vision for the organization.

Fred McLaughlin, vice president of Robert Baird & Company and past chair of the board of directors of Goodwill Industries of Middle Tennessee, offers some thoughts about the qualities of a good board candidate.

Passion

“Passion for the mission of the organization is very important,” McLaughlin says. Passionate board members tend to be more engaged and more willing to take on the commitments involved with board membership. That passion can be evidenced by a candidate’s existing participation in the organization’s work.

Understanding the vision

“Good board candidates will have a clear understanding of the organization’s vision, and how they can contribute to achieving it,” says McLaughlin.

Experience

In searching for board candidates, McLaughlin says you should look for those with a background and skill set that match the organization’s needs. Those skills could include accounting, legal knowledge and experience in human resources.

Time

“Candidates need to have a clear understanding of the time commitment that board membership will involve and be willing to make that commitment,” says McLaughlin. For example, depending on the organization, in addition to attending monthly board meetings there may be committee meetings, fundraising and other tasks.

McLaughlin also recommends that organizations have clearly defined roles for new board members and provide training and orientation for them.

Organizations seeking board members may also wish to know if candidates have strong ties to the community, enabling them to be influencers or bring in potential donors. Another strong trait for a board member is perspective. Good candidates can offer the organization a broad view about the community, the organization’s place within the community, and offer a good perspective on the role of a board in providing governance with integrity and effectiveness.

In thinking about the board’s membership as a whole, organizations should ask themselves whether the makeup of the board reflects the community in which the organization operates or the target audience within the community that the organization serves.

Finding and attracting board members with all these qualities can be a time-consuming and sometimes challenging process, but the payoff for a nonprofit — in terms of stability and success — makes it an extremely worthwhile investment.

How to select good board members for your not-for-profit

Publication

The Tennessean

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