A BOARD: POWER THROUGH SELECTION AND PROCESS
- Present and support selected key concepts of establishing and conducting board meetings.
- State the definitions, characteristics, and purpose of different board types.
- Differentiate between board director and board membership.
- Establish content for role differentiations between a board director and board members.
- Define the expected role of a board director’s leadership through the use of leadership styles and relationship abilities.
- Present the meaning and psychological board happenings related to a halo effect, horns/devil effect, and entropy.
- State the expected behavior of a successful board director in regard to cognitive, psychomotor, and affective behaviors.
- Identify privacy concerns related to board members and board member selections.
- Present and conduct behaviors on how to be an influential board director or board member.
- Consider discrimination concerns related to board decisions.
KEY WORDS FOR APPLICATION
- Public Board vs. Private Board
- For-Profit Board vs. Not-for-Profit Board
- Council vs. Committee vs. Group
- Closed Board Meeting vs. Open Board Meeting
- Executive Meeting
- Board Bond
- Open Chair
- Board of Directors
- Advisory Board
- Board Director
- Board Member
- Rules and Standards
- Halo Effect
- Horns/Devil Effect
- Privacy Considerations
- Conflict of Interest
- Tax exempt
BOARD DEFINITION, PURPOSE, AND TYPES
A board, in general, is a gathering of an uneven number of board members legally representing a majority of elected or assigned board members and/or members as determined by the bylaws of the organization—usually known as a “quorum.” A board is considered to be an accepted official or unofficial body of individuals directing and supervising activities with no evidence of discriminatory
The purpose is to discuss and consider legal recommendations for activities, changes, and policies that support the board’s resolutions, known as the facility/organization’s mission statement, philosophy, purpose, and goals.
There are many board types/possibilities. Some of the categories exist for the purpose of obtaining a specific goal, while others are merely informational. Following are a few board types in no order of importance:
- Economic Development
- Land Use
- Senior Activities
DIFFERENCE BETWEEN A BOARD, COUNCIL, COMMITTEE, GROUP, EXECUTIVE MEETING
There is a difference between a board, council, committee, group, and executive meeting. These terms are used loosely, together at times, to denote a structured gathering of people to act upon a particular matter(s). The professional leader knows the difference and sets forth the intended board process accordingly. To clearly understand the true meaning of a board, the meaning of what a board is not becomes important. The differentiation is as follows:
(See board definition above.)
A council is a deliberate meeting for the discussion of common objectives for the purpose of guiding, providing consultation, and giving direction. It is common in city, county, and municipal districts to manage related governmental affairs; however, this might not be the only situation for its use.
A committee is a small gathering of people that is usually subordinate and representative of a larger deliberative group. The purpose is usually more definitive and related to a specific matter.
A group is a simple and unstructured assemblage of persons that have something in common.
An executive meeting is not a part of or in conjunction with a board meeting. Specified “executives” as stated in the board bylaws are the attendees. If executive meetings are to occur, the board bylaws should specify by title or name the attendees and under what conditions an executive meeting can/should occur. Often times, the meetings involve sensitive and confidential information related to finances, employment, employees, and issues of facility/organizational statistics and a continuing plan for the facility/organization’s survival.
BOARD RESOLUTIONS: MISSION, PHILOSOPHY, GOALS, ARTICLES OF INCORPORATION, BYLAWS
The concern and shared knowledge of the mission, philosophy, purpose, and goals of the board by every board member is extremely important. This information keeps board members on track as to the fundamental reason for the existence of the board. Therefore, a frequent review of these resolutions is intended to keep the board members moving positively toward board success and provide the basic reason for the board’s existence.
Some facilities/organizations like to address objectives rather than goals. The term “objectives” are for incremental and process behaviors that lead to the attainment of goals. The term “goals” are for desired terminal outcomes.
The Articles of Incorporation are separate formal documents filed with the state office to legally document the creation of a facility/corporation.
The resolutions that define the role and scope of a board are to be stated and reviewed several times a year, as entropy will have a tendency to change the direction of the board. Some boards require a reading and signing of the resolutions by each board member upon accepting a board position and periodically, thereafter. (Read the document on “Entropy” by this author.)
Usually, the more accountability the facility/organization has to the community, the more control and power the members of a board are expected to have in making and carrying out community requests and desires, due to the possible use of taxpayer dollars.
A board usually functions according to bylaws which provide a formal adopted and/or amended contract among members of the board. The bylaws serve as a framework stating, at least, the board’s operation and membership qualifications, rights, liabilities, elections, duties, committees, and general duties. Investment stock structure might, also, be included within the bylaws. An annual board reading and revising, as needed, of the bylaws should be followed by a signature of every board member.
A binding bond to cover board member’s actions is usually required and provided if the board has a governing body. It is essential that a board always act within their legal parameters and have a signed commitment to their role differentiation as a board member. Legal counsel should be consulted if there is a question as to the board’s rules, procedures, or bylaws. Minutes are to be taken, read, approved, and retained for possible future legal concerns! Financial records are to be kept and shared appropriately with the board’s constituents and elsewhere as stated in the board’s bylaws.
BOARD TYPES: OPEN VS. CLOSED BOARD—FOR-PROFIT VS. NON-PROFIT BOARD—PRIVATE VS. PUBLIC BOARD
An open board means that the people (in addition to the board members) who attend and are interested in the functioning of the facility/organization or board. Reporters who might attend possibly have a press- release intention. It is usually a public board. The declaration as an open board should be part of the board’s bylaws. The board meeting is intended to aid in the conducting of the people’s business. Minutes are retained and can be viewed by the public, unless stated otherwise in the board bylaws. Declaring of a suggestion or recommendation motion and voting will occur by board members, only.
A closed board means that board members are the only permitted attendees. It is usually a private board. The declaration as a closed board should be a part of the board’s bylaws. The board meeting is intended to aid in the conducting of private business. Minutes are retained and viewed by the board, unless legally requested or stated otherwise in the board bylaws. Declaring of a suggestion or recommendation motion and voting will occur by board members, only.
An open chair means there is a viable and a useful sharing opportunity for both the board and the guest of usually an open board; however, this concept can be used by a closed board with the board of director’s approval. The open chair(s) allow for the availability of a place at the board table for a specific number of visitors or a representative of a specific constituent faction. For the guest, it allows an opportunity to experience the workings of the board and share concerns and ideas with the board members. Rules that support this happening should be placed in the board’s bylaws. Declaring of a suggestion or recommendation motion and voting will occur by board members, only.
Possible Reasons for a Guest’s Invitation to Fill an Open Chair at a Board Meeting are:
- Gaining of an understanding of the function of the board
- Presenting concerns that might be addressed by the board
- Receiving answers to existing concerns or problems
- Assessing a desire to become a board member
The Role of the Board Director During a Guest’s Open Chair Visitation is:
- Providing an understanding of the board’s resolutions, related bylaws, and purpose of the guest visitations
- Encouraging the board members to listen and understand the guest’s questions and concerns
- Encouraging the board members to provide the guest with correct information to share with other members of the community
A community guest invitation to fill an open chair at a board meeting is especially helpful in identifying community concerns and perceptions. Some boards choose to have a guest(s) from the community at every board meeting upon invitation. Such guest visitations add a dimension of community involvement and a better understanding of board happenings.
A for-profit board represents a for-profit organization that has a purpose of making a profit (money) and usually functions as a closed board. If any tax-payer monies are used or acquired by the organization without the tax payer’s access to relevant information, it infringes on the tax-payer’s Right to Know Law. In this case, there might be an expectation, by law, of one/few meetings a year that will allow for an accounting of any use of tax payer dollars provided by the tax payer. Declaring of a suggestion or recommendation motion and voting will occur by board members, only.
A non-profit board represents a non-profit charitable organization that has a purpose opposite of a forprofit organization. That is, it functions for some other purpose than making a profit and usually functions as an open board. The tax-payer has access to information regarding the use of tax-payer money. Declaring of a suggestion or recommendation motion and voting will occur by board members, only.
Federal Role of the Internal Revenue Service (IRS):
The Internal Revenue Service (IRS) has an oversight role with respect to charitable organizations (nonprofit organizations.) Charitable organizations are eligible to apply for a non-profit status through the specific requirements of each state; however, must apply for federal approval to be tax-exempt. This IRS (federal) oversight is to prevent the appearance or actual private benefit to individuals in authority on a non-profit board of the organization. Such IRS requirements protect against charges of impropriety involving any/all board members. A non-profit organization could lose their tax-exempt status (once acquired) unless the organization’s board consistently operates with an intended charitable purpose and with no evidence of conflicts of interest. A non-profit charitable organization is not tax-exempt unless a board (with a state-approved non-profit status) formally applies to the federal government for tax exemption and is formally recognized by the federal government as being tax-exempt.
An IRS Conflict of Interest is a situation in which a person is in a position to derive personal benefit from his/her actions or decisions as a member of a non-profit charitable organization board. The reason is-- the concerns and aims of the non-profit board and a board member are considered to be incompatible. If a board member with a conflict of interest is on the board, it should be clearly documented in the bylaws and supporting minutes that the involved individual is required to be excused/recused from voting on specified matters that involve a conflict of interest.
IRS Conflict of Interest Best Practice Guidelines for Non-Profit Tax-Exempt Boards to be Avoided or Minimized are:
- A board quorum required to meet and carry out board functions should comprise of no related immediate family relatives (blood or marriage).
- Even if immediate family relatives are present at a board meeting, a quorum of unrelated family relatives need to exist before the board meeting commences.
- Board members should not have a dual-capacity. That is, employment within the organization and, in addition, a board member.
- During the board topic of hiring a new employee that is an immediate family member of a board member, the family member on the board must excuse/recuse him/herself from voting on the hiring and compensation amount paid to the new employee.
- If any benefits or compensations are provided to any member of the facility/organization or board members, it must be a reasonable compensation and explicitly documented as meeting the board’s bylaws of reasonable compensation.
- No private interest is to be served or allowed, such as money or benefits.
There are 28 different types of non-profit federally approved tax-exempt organizations; however, the most common are known as 501c3, 501c4, and 501c7. Definitions and particulars of the stated three non-profit boards are:
503c3: An IRS tax-exempt non-profit status that usually includes private foundations and organizations that promote a religious, scientific, charitable, or literary purpose—e.g. churches, youth summer camps, museums, and senior centers. No operating budget is allowed for lobbying efforts. The completed application form 1023 can take from 9-12 months, depending on the federal government’s request for information.
The Federal Acceptance Benefits of a 501c3 are:
- Eligibility to receive tax-deductible charitable contributions
- Exemption from federal income tax
- Exemption from employment taxes
- Donors are more likely to support organizations with a 501c3 federal exemption due to their donations can be tax deductible
- State officials can grant exemptions from state income tax, state sales tax, state property tax, and receive reduced U.S. postal rates
- Assurance to foundations and other grant-making institutions that their grants or sponsorships are issued to 501c3 permitted beneficiaries
There is usually no need to renew a 501c3. However, the state (as the approval of a non-profit status) might require an annual yearly report outlining yearly revenue and activities in keeping with their reporting and registration requirements.
501c4: An IRS tax-exempt non-profit status that usually includes civil leagues and local associations that further a social welfare objective, but do not rise to a charitable level—e.g. Lion’s Club, Home Owner’s Association, Council on Aging. An operating unlimited budget is allowed for lobbying/promotion of a candidate as it relates to the purpose of the organization.
501c7: An IRS tax-exempt non-profit status that usually includes social and recreational pleasure clubs—e.g. fraternities, sororities, country clubs, sport clubs, dinner clubs, hobby clubs. No public service or community benefit services are required. There are no federal taxes on day to day activities.
A public board usually functions as a non-profit board. It is usually attended and controlled by a larger and more involved population than a private board. They usually function as an open board and are subject to the IRS Conflict of Interest guidelines, if the board has been approved by the federal government to be tax exempt. Tax-payer dollars are often involved.
A private board usually functions as a for-profit board. It is usually attended by selected and numbered board members as well as any other specifications as identified by the board’s bylaws. Tax-payer dollars are usually not involved. However, if any tax-payer dollars are accessed for the purpose of sustaining the facility/organization, there should be a mechanism to provide tax-payers (supporting or partially supporting the organization’s function/service) to review the appropriate use of tax-payer funds according to the Right to Know Law. No federal tax-exemption is usually available for a private board.
A Simplified Review and Comparison of Usual Happenings-- (In case you are confused by now)
Non-Profit Organization – Guided by Board Resolutions -- Public Board – Open Board Meetings – President/Director Elected or Board Appointed –Must be approved by the state for non-profit status— Available for federal IRS tax exemption upon federal approval—IRS Conflict of Interest Concerns – Tax payer dollars are often used – Can use an open chair option for suggestions, recommendations, and clarifications—Declaring of a motion and voting by members, only.
Profit Organization – Guided by Board Resolutions -- Private Board - Closed Board Meetings – President/Director Appointed, usually – Not eligible a non-profit status—Not eligible for federal IRS taxexemption—No IRS Conflict of Interest Concerns–Tax payer dollars are not/should not be used without tax-payer reviews– Can use an open chair option for suggestions, recommendations, and clarifications — Declaring of a motion and voting by members, only.
BOARD DEMOCRATIC PROCESS
Evoking the Democratic Process of Election:
Some non-profit boards vote to have a current member of the board elevated to the board’s director (sometimes referred to as “president.”) A democratic process, as a preferred method, means that a director of the board is determined by the voting of a larger constituent population. The method of choice should be stated in the board’s bylaws.
In most instances, the director of a private board (usually for-profit and closed board) is usually determined and appointed by the facility/organization controlling officer(s) and is an individual who is trusted with the survival decisions of the facility/organization. Board members are often an outcome of arbitrary appointments by the facility/organization, the discretion of the selected president/director, and/or as stated in the board bylaws. The democratic process is less likely to be evident.
Board majority votes of board members of both a non-profit or for-profit board are considered to be the board’s recommendation of choice and documented in the board minutes. Roberts Rules are often used to determine an effective process for group deliberations.
Evoking the Democratic Process of Leadership:
The leader of any type of board who was accepted through the democratic process should require board members to fulfill board responsibilities. These responsibilities are often set forth in the board’s bylaws and annually signed by all board members.
As indicated in the bylaws, board members should be aware before becoming board members that there is an inherent responsibility to help the board meet the board’s resolutions (mission, philosophy, purpose, and goals) as a shared board responsibility. This responsibility includes the active participation and responsibility regarding individual board assignments and the reporting to the board of assignment progress and outcomes. True—some board members may be less enthusiastic to carry out board assignments than others. A leader does not allow free riders when it comes to sharing board responsibilities and reminds the board member(s) of their agreement as found in the bylaws—known as the board member’s Board Differentiation Contract. Due to the natural tendency of entropy (movement of all things toward randomness), a regular reminder and commendation of a board member’s positive behavior that fulfills a responsibility to board activities should be forthcoming. (Read
the document on “Entropy” by this author.)
Beware: The concept of a board’s democratic process can be sometimes confusing and covert. A so called democratic board can and by design function either as a friendly get-together or a formal bylaw abiding group. During board discussions there can be important private and/or public information and a hidden agenda that is not shared in the board minutes. This can include the covert process of member selection, board personal participation (or not) of members, and the financial, legal, and stability of facility/organization situations. The intended purpose of a board is usually presented as a democratic altruistic process—and hopefully it is realistically so, for the most part! It is the intelligent and intuitively- gifted board member, however, who learns to discern covert democratic concerns.
It is important to read and understand a state’s human rights statute to validate the following discriminatory laws and how it relates to board members and other involved individuals—such as company employees.
Discrimination is usually/often concerned with gender, race or color, religion, familial status (housing only), sexual orientation, sexual preference, pregnancy, disability (mental or physical), age (40 and over), and genetic information. Other usual considerations are credit, education, employment, financing, housing insurance, public accommodations, state and local governmental services and employment, marital status, national origin, religion or creed, sex/gender (including pregnancy, maternity, and sexual harassment), and political beliefs or ideas. It is, also, unlawful to legally retaliate against a person for his/her opposing discriminatory practices or being active in human-rights proceeding(s). Another example: In Montana, an employee can only be discharged (legally) for ”good cause” after completing the employer’s designated probationary period as stated on the job description.
BOARD TITLES: BOARD OF DIRECTORS VS. ADVISORY BOARD
Board of Directors:
A board of directors is an official group of individuals that direct or supervise the decisions and activities of a facility/organization through significant independent input and power. This type of board is allowed and required to exercise more formal power and accountability than just advice, as in an advisory board. It magnifies business activities and dilutes the control of other facility/organization groups. Members of this board are sometimes elected officials that guide and approve the major decisions of the larger body they represent.
The members of this board are intelligent and experienced regarding the topics and ultimate decisions made to bring about the coordinated achievement of facility/organizational goals. These individuals are very involved in monetary accountability, budget, policies, and employment decisions. This includes hiring, supervising, employment recommendations, future board of director member recommendations, and private decisions regarding employment termination. A board of directors is exposed to legislated liabilities and other duties which cause the need for policies that minimize risks—often known as “risk management.” Sometimes they have accountability to the community regarding the appropriate use of community, state, and/or federal funds—which brings to the forefront, again, the concern of using tax payer dollars without any community input.
Legal decisions and other decisions that could have legal ramifications are usually discussed frankly. Often, a legal representative is available to comment on the considerations and final board decisions. As a reminder: Employment or placement of a board member or termination of a board member should always involve legal counsel!
An advisory board is a board that exercises its prerogative to give advice, approval or disapproval of past board minutes, and support of a board director’s final decisions. It provides non-binding and non-biased advice for a facility/organization. There are no responsibilities or voting on corporate matters, usually. Sometimes they recommend and approve budget expenditures. Often the board is composed of various experts and non-experts who offer nonbiased innovative advice and dynamic perspectives. They might listen to the organizational happenings and final decisions made or presented by the advisory board director and add information to what is stated or known by the advisory board director.
The advisory board process serves a purpose when a board is felt to be necessary/important by the community or other members of the facility/organization. It can be viewed as a positive situation for the facility/organization, as the process of collective information is reflected in the board minutes.
There are benefits of an advisory board over a board of directors, as it provides a distancing opportunity of the board’s input from the board of director’s decisions. This distancing helps to increase advisory board creative thinking for problem resolution and objectivity. Advisory boards can often focus on one problem while a board of directors must take into account all aspects of their facility/organizational responsibilities—the “bigger picture.” The advisory board has less commitment, time involvement, and power than a board of directors.
Advisory boards are sometimes known as public advisory boards—especially when public funds are accessed for board activities. Most public advisory boards have the policy of an “open meeting” which allows non-member public board members to attend, listen, and contribute, as appropriate and with approval. Declaring a suggestion or motion and voting are usually retained for board members, only.
The protection given to public advisory boards is determined by the board acting within the scope of their lawful authority and within their established bylaws. Legal counsel can help to assure that practices of the advisory board are well within the parameters and expectations of their bylaws.
A board director is a person who is paid, volunteers with approval, or is granted a board leadership position by a facility/organization and in accordance with a designated role differentiation contract. According to the board’s bylaws, the board director is usually a non-voting member of the board. Sometimes, as an approved statement in the bylaws, the board director’s vote is used to break a tie between other members of the board.
Some directors are also known as the Chief Executive Officer (CEO) of a facility/organization with the responsibility to make final decisions. Some directors consider their role like a puppet of the board’s decisions and the board is their “boss.” To show such complacency in a directorship role is to show a lack of understanding of the leadership power expected of the role and the potentially legal consequences of their decisions.
Leadership as a board director demands the guiding of board concerns and conversations for the movement toward the board’s resolutions (mission, philosophy, purpose, and goals). It requires the knowledge of board process and matters that are of potential legal concern. The purpose of this role is to organize, direct, and manage presentations and the verbal sharing process of board members during a board meeting. The non-profit board director role is about fundraising, promotion of the service/product, increasing public interest, and boosting membership of the facility/organization. The role, regardless of the type of board, requires significant input as to placement on the board of strategic members who are representative of the community or facility/organization being served. the role is NOT about being liked—it is about being respected as the director!
In keeping with the board director’s human relationship abilities, many specific behaviors are expected. Recognition and a verbal welcome of guest visits are always appreciated by the visitor and the entire board members. A board director never underestimates the need for human relationship skills evidenced by courteous and thoughtful behaviors. The exchange of positive board ideas occurs when the director recognizes two variables related to his/her responsibility—relationship abilities and a positive leadership style. To function with positive relationship abilities and an effective leadership style, in or out of the board room, is an obvious showing of professional prowess. It says loud and clear—I UNDERSTAND THAT RELATIONSHIPS MATTER AND I UNDERSTAND MY EXPECTED ROLE AS A BOARD DIRECTOR!
Perry Smith (American military leader) in 2002 writes (paraphrased) that skills of a leader (board director) include trusting personal intuition, running effective meetings, understanding the workings of the facility/organization, being open and approachable, having the ability to combine substance with style, exuding integrity, trusting and respecting others, having problem-solving skills, and communication skills. This is a large order and an enormous responsibility. This role is not to be taken lightly; but, is to be and expected as an outcome of the trust given to the board director. The board director should never underestimate the scrutiny of others regarding his/her assignment!
The board director is always ultimately accountable for any independent final decision(s) made by him/her or recommended or suggested by the board members. The role of a board director requires an ability to maintain a power differentiation between him/her and the members of the board, and uses that difference in power to maintain proper functioning of the board and movement toward board resolutions. A directorship for a board (of any kind) is an honored sacred protector of accurate board process.
Whereas, board members make suggestions and recommendations, board directors make final decisions as an outcome of board member input—that is the role differentiation. The functionality of these two roles are to be included in the board’s bylaws. If a board director does not fully understand why board member(s) would suggest or recommend a decision thought to move the facility/organization toward a board’s resolutions, he/she (director) has the responsibility to find out the facts before accepting or vetoing such board suggestions or recommendations.
A board director knows the concept of entropy. That is, all universal things and happenings move toward randomness. This means that board members and the board director might tend to naturally lose their “place” in the functioning of an effective board. Everyone at the board table is on the same “team,” but the team has players that are different in their respective roles. To curtail the entropy in board roles, the board director should have a regular review of the role differentiations with the board members and in keeping with the type of board. When the board moves in a positive direction rather than negatively by entropy, it is wise to commend that positive board direction. (Read the document on “Entropy” by this author.)
The board director’s effective behaviors, when relating to the board members during any type of board meeting, include the ability to function at the cognitive, psychomotor, and affective level. Cognitive abilities mean there is an ability to accurately know and perceive information. Psychomotor abilities mean there is a physical ability to carry out decisions in a manner to get jobs/activities done. Affective ability means there is exhibited appropriate feelings and emotions related to individuals and situations.
A Board Director’s Behavior Usually Includes (or at least considers):
- Clarifying all aspects of decisions and/or recommendations, policies, and considerations of expansion or diminishing of product or services
- Listening to board members and understanding board member suggestions, recommendations, and concerns
- Presenting rationale regarding what has been developed or determined for and in behalf of the facility/organization
- Sharing statistics and concerns regarding written, printed, or verbal material related to the facility/organization
- Affirming or disaffirming facility/organization decisions and policies
- Making appropriate suggestions for board member’s consideration regarding current or future plans for the organization
- Respecting all contributions as possible positive input to the topic of discussion
- Sharing researched or known input to the decision-making process and possible outcomes related to recommendations and suggestions of the board
- Requesting affirmation and discussion, as needed, regarding past meeting minutes and decisions
- Ascertaining future directions for the facility/organization in relation to the board’s resolutions.
- Affirming, rejecting, or taking under advisement board members’ suggestions or recommendations
- Seeking support, recommendations, and potential ramifications regarding the promotion, demotion, and termination of employees
- Holding board members accountable for meeting the established bylaws of the board.
- Accepting critical thinking input from all board members, but retaining appropriate veto power in keeping with the role differentiation and the type of board
- Knowing the stated principles of effective board practice
- Making administrative decisions by incorporating appropriate board recommendations
- Identifying new potential board members or guests and explaining the role, function, and expectations of a board member or guest
- Evaluating the extent of positive participation of each board member for the purpose of membership retention
- Appreciating active critical thinking by every board member
- Managing thinking processes so that answers do not necessarily need to be swift—just occur in a timely, careful, and thoughtful manner
- Learning how to get to the “root” of a problem by asking the many WHY’S related to the problem
- Considering the best action with concern for productivity and/or effectiveness
- Expecting board members to arrive having read the past minutes with no need to reread the past minutes in the board meeting in order to have a vote on the approval of the minutes
It is often said of a board director, “The buck stops here/there!” The board director just needs to make it clear when and with whom the board decision stops—and, it is with the board director. As a director, listen and respond carefully. Don’t give away your positive and effective power outlined in the board bylaws. Move forward carefully and if appropriate with the board’s suggestions or recommendations. Remember—with that director power comes ultimate responsibility!
A board member is a person who is paid, has volunteered, been assigned, or granted a board position by a facility/organization and in accordance with a role expectation. Public advisory board members are usually determined by a desire to serve and give viable contributions. Private board members are usually determined by the facility/organization and serve for an unspecified amount of time.
The purpose and success of being a board member is to have an opportunity (according to the type of board) to verbally share their intelligent and strategic ideas through a critical thinking process with other board members (including the board director). Appropriate selection of members or guests that have this ability will lead to successful board outcomes!
Board members are expected to act within the scope of their authority, and within the board’s established bylaws. It is wise to consider bonding for the performance of board member’s duties. Legal counsel should be obtained for the determination of specific board duties so as to assure that such duties stated in the board’s bylaws and board member role differentiations are within the scope of legal requirements.
Each member’s quality contributions (no matter the type of board meeting) is important. That is the beauty of a board—diverse experience and work history. Board members have the opportunity and responsibility to:
- Offer alternative ideas for mutual consideration.
- Offer critical thinking ideas.
- Consider presented details to determine a suggestion or decision.
- Be driven by the facility/organization’s and board’s resolutions to get a job done.
- Provide powerful ideas/secrets of information that are needed (and not always desired) to prevent a mistake.
Some board members can be a liability and are not naturally schooled in their role and merely become a human fixture occupying a chair at the board table. Sometimes a board meeting will occur with many of the board members saying nothing. Saying nothing says something! Listening to verbal input is sometimes the only action observed by a misplaced person who does not fulfill the role as a viable board member.
Board members need to know their role. Board members, upon their placement and acceptance of a board member role, need to have a contract that specifically identifies their role and expected behavior—so called, role differentiation contract (specifics follow). The contract, upon signing, provides an understanding of expected active role participation by board members.
Existing board members of a public advisory board should NEVER be required to determine a new member’s final approval as a member of an existing board. A board member’s final board membership determination is an administrative final decision or as a result of an election—not board membership decision. Remember--board members do not make final decisions! To allow board members, per se, to have such selective power or either unapproved personal information about a potential board member in order to “help” make a board membership decision shows an inability of the board director or controlling body to have the professional ability to make informed professional final decisions. It, also, encourages the angel or devil effect within the existing board members (specifics follow). Consideration should also be about the total number of board members. Usually the number of board members is seven. An uneven number of board members help to assure that board voting is made without a voting tie. The uneven number of board members may or may not include the Board Director; however, the decision to include or exclude the board director in the uneven number of board members and the voting acceptance of the board director is to be identified in the existing bylaws of the board.
The selection of specific board members by the board director is usually a common-sense decision. The selection of board members should represent the many factions of the population that the board decisions impact. That is, it is best to have representation of the existing demographics and individuals informed about topics that will be discussed by the board. These are individuals that help meet the goals of the board through the appropriate sharing of diverse opinions. This sharing is an outcome of their symbiotic relationship with other groups and/or evidence of current or past history of success in a related field of endeavor. These individuals are to be selected because they are independent and critical and strategic thinkers. Their personality is strong enough that their thinking accommodates changes related to different times and situation. They do not fear disagreement. Positive fearlessness is a good descriptor of an excellent board member who is not afraid to recommend needed changes. They have an excellent self-esteem and they are positive “movers and shakers” of the very core that make the facility/organization and board a success.
There is a significant burden related to being a board member! You make suggestions and recommendations on behalf of others! Constituents of a board often expect a continuation of successful past decisions of the board and because of their expectations past decisions may become difficult to reverse or change. Now, and at this point in time, another but different situation occurs resulting in constituent thinking, “Well, we have done it that way in the past, so it must be OK to do it now!” This inaccurate futuristic thinking is called, “Repetitive Congruence.” Due to the process of entropy—all things and situations change (as I have said repeatedly). Therefore, all past board decisions considered for current or future implementation should be revisited by a board as they relate to the current time, person, and/or place.
Setting future precedence (Repetitive Congruence) can inadvertently be set by a board’s mindset unless the board is fully aware of the potential ramifications of the future efficacy of every decision. Repetitive Congruence probably will be recognized—so increase your awareness! Futuristic critical thinking by the board is necessary before making decisions that will not cause unwanted future problems!
An Example of Future Precedence:
A facility/organization administrator was approved by his/her board to teach a course(s) for additional monetary reimbursement in addition to performing and being monetarily reimbursed for current administrative responsibilities. Now—there might not be a doubt regarding the abilities of this person to know and teach the content of the course. The concern comes in the outcome and future ramifications -- that is, the possibility of Repetitive Congruence. A board’s critical thinking process to help prevent future precedence should include:
- Is this an appropriate and the most qualified person in this capacity to teach such a course now and in the future?
- Does this teaching interfere with his/her current position and the responsibilities of that position now and in the future?
- Will the evaluations be free from an unconscious covert bias due to the person being who he/she is in the current position now and in the future?
- If this person is paid in addition to his originally paid position, does this meet the criteria of “double-dipping” of tax-payer funds now and in the future?
- Will this decision to allow possible “double-dipping” set precedence for future behaviors by similarly paid persons?
- Does the decision of the board impinge on any discriminatory laws now or in the future?
- Does this person’s original contract allow for or require alterations, substitutions, deletions, or additions to the originally intended role in the future?
- Will the approval of this person to perform teaching responsibilities in addition to his/her primary role cause other persons to expect the same privilege in the future?
During any board’s existence, there will be many varying and challenging requests. Therefore, it is important that a board examine carefully and take the time to contemplate the possibility of unknowingly setting precedence by a board suggestion, recommendation, or director’s decision. When recognition of a possible future precedence could possibly be set through a board decision, it is necessary to consider all aspects of the request and record possible consequences of the board’s suggestions and recommendation. Oft times, it is the first request that gives a signal to the board that future firm guidelines should be determined by the board before approval of the first request is given. Some boards have a by-law that requires decisions to be deferred to the following board meeting for the purpose of allowing time to intelligently and critically think through the implications of their decisions that could set a future precedence. If an approval is given with the possibility that the decision could set future precedence, it should be stated in the minutes that the approval is granted for this time only and must be reviewed carefully before approval is given for any future approvals of the same or similar behaviors.
Paraphrasing Laurent Schwartz, a mathematician, put the delaying of decisions best when he questioned his intellectual capacity for decision-making by accepting that he was “slow” in providing answers. He needed time to “seize things” because he needed time to understand them fully. I secretly thought, he said, that I was stupid. He admitted that he is still slow--? However, he came to the conclusion that rapidity doesn’t have a precise relationship to intelligence. What is important, he decided, is that it is most important to deeply understand things and their relationship to each other. This is where intelligence lies. The fact of being quick or slow isn’t really relevant!
Therefore, the relevancy of Schwartz’s comments will support the allowing of time to logically and intelligently sort relevant thoughts to form accurate board suggestions, recommendations, and board director decisions. Slowing the decision-making process down will help prevent the moving as fast as light in the darkness of night!
“HALO EFFECT’ AND “HORNS/DEVIL EFFECT”: EFFECTS OF COGNITIVE BIAS & COGNITIVE DISSONANCE
The Halo Effect:
The halo effect is when a person takes a personally acquired good impression(s) from another circumstance(s) and transfers that good impression(s) to all other aspects related to that person. That person is seen and presented to others as all good.
The Horns/Devil Effect:
The horns/devil effect is when a person takes a personally acquired bad impression(s) from another circumstance(s) and transfers that bad impression(s) to all other aspects related to that person. That person is seen and presented to others as all bad.
Why be Concerned about the Halo and Horns Effect?:
The “halo effect” and “horns/devil effect” are accepted psychological occurrences. These effects can cause a cognitive bias (thinking bias) where perception of a person’s total traits and abilities (good and/or bad) influence an existing perception of unrelated traits(s).
The outcome of either effect in a board situation is that an existing board member who has experienced any previous exposure to a potential board member under other circumstances would not usually see, present, or recommend to others a potential board member in an unbiased way. The board members, then, assimilate an unconscious cognitive bias. The potential board member would be judged (usually by all members) by an existing board member’s verbal cognitive bias statement as to the appropriateness of the potential board member. The outcome is that the potential board member might be seen totally wonderful/right or totally inappropriate/wrong for the board membership position—all because of the influence of a halo effect or a horns/devil effect. The truth is that usually these effects have nothing to do with a person’s ability to contribute effectively as a board member. The board members could experience group conflict and produce personal board tension and discomfort as they attempt to make suggestions or recommendations regarding the possible acceptance of a potential board member. Such tension and discomfort are known as Cognitive Dissonance.
The basic rule is that first impressions are carried over into other situations and, therefore, are too often the determining factor by existing board members to accept, reject, or recommend potential board members. Once the personal halo or horns/devil effect is shared regarding a potential board member between existing board members by a board member, the remaining board members, unfortunately, will usually accept the presented halo or horn/devil effect as legitimate—correct or not correct!
Therefore, the decision of board membership is never meant to be a political decision or popularity contest. There is often personal information and feelings that should have no bearing on board acceptance or the ability of a potential board member to contribute in a positive way to the functioning of a board. In this situation, the existing board should be aware that they have been “preconditioned” as to a new person’s possible contributions. That personal information known by other members of the board can (and does) distort the appropriate acceptance of a new member’s future board contributions. This firmly says that only carefully selected information about a new board member should be shared by anyone. This adds to the reason why the board director should NOT share resumes with board members and should accept the personal responsibility of appointing board members. That responsibility of the board director should be stated in the written role differentiation contract (job description and/or board bylaws) previously prepared for the role of the board director.
CONFIDENTIALITY & PRIVACY CONSIDERATIONS
To provide information about a board member or not to provide information is a question as to what information breaches the right to privacy concerns. If there is a question about what can or cannot be shared, it is wise to error on the side of not sharing information. What is it they say—it is better to be safe than sorry as to the sharing of personal information!! Approval for sharing information can always be obtained from the person for which the information pertains. Perhaps legal advice is important in combination with common sense.
Consider this—if a person asks specifics about a board member or employee, understand the specific question and reason for the question as a beginning point. Then, go to the documents available, read these documents, and give only the shortest answer possible regarding the specific question and only if the request for information is not within the confines of confidential information or legally to be withheld. Never share with others a resume entrusted as a confidential document without personal approval from the person it represents. Confidential board information is never to be used for personal gain or enticement regarding other prestigious opportunities.
Privacy of an individual is always to be considered. Any public (open) meeting can be closed by the presiding executive officer (Director or CEO) to accommodate the privacy of an individual. If an individual waives his/her right of privacy, the meeting must be open. The test to be considered for a board meeting to be open or closed must be considered under these guidelines: Does the need for individual privacy clearly exceed the merits of public disclosure?
ROLE DIFFERENTIATION CONTRACT (JOB DESCRIPTION)
The signed board member role differentiation contract helps to assure that board members understand their role, how it differentiates from other types of boards and organizational roles (such as the board director), and that each board member has the same expectation of performance. The board member role differentiation contract for every board member is to be read, discussed (if need be) and signed by each board member as an entry gate to board participation and, thereafter, at a specific recurring time. The frequent review of a board role differentiation contract helps to assure that there remains a “goodness of fit” and minimal entropy between board member’s behavior and the expectations of the board. Remember that the contract should represent the expected behaviors specific to the type of board on which the member is participating—Board of Directors or Advisory Board. As on any contract, what is expected should be clearly written and the outcome stated if there is non-compliance to the contract. Board directors also should sign a board director role differentiation contract. Such clarity prevents any future legal entanglements related to a misunderstanding. Persistent non-compliance to a signed role differentiation contract should result in a possible board membership replacement after conferencing with a legal representative.
Some Considerations for the Content (and Expectations) of Board Director and Board Member role Differentiation Contracts are:
- Mission statement
- Philosophy statement
- Purpose and goals (Board of Directors or Advisory Board)
- Meeting day and time of the month
- Location of meetings
- Expectations of attendance, lateness, and tardiness
- Preliminary board activities-- (reading of past minutes and upcoming board meeting agenda, etc.)
- Expectations of participation during board meetings
- Need to listen and participate with suggestions and recommendations
- Need to ask relevant questions for clarification
- Need to understand and use the concept of critical thinking
- Need to consider and respect comments from others
- Need to accept the reimbursement policy set for by the organization (if any)
- Need for nondiscriminatory comments
- Length of board assignment
- Agreement of allegiance to the expected standards of the board
- Notarized signature and date
In addition to the consideration of the above content as part of a role differentiation contract, a signed acceptance statement could appear as follows:
I,_______________________, understand that my acceptance, involvement, and continued membership as a board participant is contingent upon my consistent positive involvement and helpful input during each board meeting, as was indicated to me. I believe and support the above stated role and intend to comply with these stated board expectations in order to retain my position as a board member.
ASSISTIVE ADMINISTRATIVE ROLES
Some boards have chosen to assign specific board members (in addition to the board director) to assistive roles. Each person assigned is responsible to the board director. Their assigned board role differentiations can add to the shared responsibilities of the board process as well as provide a check on adequate accountable functioning of a board. Such additional roles should be set forth as a part of the bylaws related to a specific board.
The assistive roles performed by selected board members are president (or similar title), vice president (or similar title), and advisors.
Director/President, or Similar Title:
A person (hired or assigned) to assist in the consideration of board members and the functioning of the board. Proven leadership is a must for this position. This person is truly a leader of others with the respect of others and usually academically prepared in the reason for the board’s existence. This person has the ability to filter out all inappropriate aspects of input from numerous sources. It should be made clear that the role is intended to be a supportive and decision-making role to the functioning of a board and the board director.
Vice Director/President or Similar Title:
A person (hired or assigned) to replace the president in times of an emergency and be a helpful resource for the president in a decision-making process. He/she must have the same ability of leadership as the Director/President.
This role must mirror the presidential role and maintain a supportive role to the functioning of the board. The academic preparation might be of less concern than a president, but certainly, the ability to make appropriate decisions relative to the stability of the organization is of importance.
Secretary/Recorder or Similar Title:
A person (hired or assigned) that is not a board member to take board minutes, prepare minutes for each board meeting, and distribute board minutes to existing board members from the previous board meeting, as requested or assigned. If the board is a closed board meeting, legal advice is suggested regarding the recording and distribution of board minutes.
This recording should be a secretarial role, not a board membership role and as identified by board bylaws. Having board members record minutes has a tendency to curtail that person’s participation as a board member. Minutes are to be an official record, a record of what is done (not what is said), a method of minute approval, and each subject represented by a separate paragraph. If public (nonboard member) comments are made during a board meeting, those commits should be in quotes and incorporated in the minutes. Motions identifying the person by name, who made the motion, board suggestions and recommendations, director decisions, and final outcome of actions and the actions pending are to be recorded. Corrections are to be done in colored ink. There should be a record of early and late arriving board members. Reports are to be filed with the minutes. There should be no personal comments. The minutes should be completed in a timely manner and signed by the secretary. Minutes should be available to all board members for approval and/or correction before the following board meeting and, again, a copy distributed at the next meeting. For record keeping, a draft must be identified as well as the approved minutes by the board.
If an audio-recording is designated as official minutes, a written record must also be made available for inspection. An annual board report is usually required and presented to the governing body. Such a recording of each meeting can lend itself to positive outcomes, such as, providing a reminder as to what was actually said and validation of the minutes. There is never a negative reason for maintaining accurate recordings/records of board meetings, especially when taxpayer dollars are expended to bring about the decisions of the board. Upon request, no person should be deprived of the opportunity to examine or copy records/documents of a record related to a public (open) board document, unless individual privacy is an issue. A reasonable charge can be required for copying a document/record.
The choice of the means of public record availability is the prerogative of the board. However, the transparency of happening, discussions, and decisions is the right of every taxpayer if taxpayer funds are involved. The question now comes to the forefront (and in the future) that the people who have representatives in powerful positions have an obligation to involve and openly inform through whatever means is possible the tax payers/constituencies that will be the recipients of their decisions. The concept is the same—taxpayers have a right to hear, see, experience, listen, contribute, read, and share their concerns about the use of the dollars within their system. The “open meeting” serves and meets this purpose. The government most likely will, hopefully from this time forward, be more open to the taxpayer. The board happenings are no different—the board is informationally accountable to the taxpayers/constituencies they serve!
Advisors to the Board or Similar Title:
A person(s) who is requested to or hired to be available in some capacity for consultation. The purpose is to help increase understanding of situations that need clarifying or in addition to the board suggestions, recommendations, or decisions by the director. A legal representative might be considered as an example of an advisor. Other advisors could include any non-board individuals that have access or experience in a topic of interest to the board.
Roberts Rules of Order provides specifics for how to use and present a motion during a meeting. It is recommended that such a procedure be used to maintain order and movement toward expected outcomes.
HOW A PERSON MEETS THE CHALLENGE OF BEING A BOARD PRESIDENT OR BOARD DIRECTOR IS A QUESTION OF HONOR AND RESPONSIBILITY TO THE FACILITY/ORGANIZATION AND THOSE SERVED.
HOW A PERSON PARTICIPATES AS A BOARD MEMBER RELATES TO THE MEMBER’S ABILITY AND WILLINGNESS TO SHARE INTELLECTUAL PROBLEM-SOLVING TALENTS TO HELP MEET THE MISSION AND GOALS OF THE ASSOCIATED FACILITY/ORGANIZATION.
POSSIBLE CRITICAL THINKING PROBLEMS FOR DISCUSSION OR ESSAY WRITING:
The purpose of critical thinking questions is to help you (the reader) examine how this content could apply in an actual, potential practice, and/or teaching situation.
- Explain how the board’s resolutions guide the activities of a board.
- Compare and contrast the different types of boards.
- Select a board type and write a possible mission statement, philosophy, purpose, objectives, and goals.
- State the difference between a board director/president and a board member.
- Under what board situation(s) or conditions would cognitive bias and cognitive dissonance be evident?
- You have just been nominated to be a board president director of a nonprofit organization. What are your responsibilities?
- You are an active board director. What are your responsibilities?
- You, as a board director are establishing a for-profit board. What are your considerations?
- What is the impact of entropy on a board?
- What concerns would a tax-payer have regarding any board type and why?
- Identify the meaning of “critical thinking” and how it relates to the role of a board membership.
- Develop a set of bylaws that would support a new board and support the future guidelines of future board behaviors.
- Explain the use of role differentiations and how it would support the development and continued non-entropy effect of board behaviors.
- State the concerns and behaviors of a board as they relate to discrimination/non-discrimination.
- State the difference between “angel-effect” and “devil effect” and how it might effect the selection of potential board members.
- A board member has just said—“But, it has always been that way.” What concerns should go through your mind as a board member or a board director?
Anenglishpage.tripod.com/domains.html (Cognitive, Affective and Psychomotor Domains)
www.joshuakennon.com (Halo and Horns/Devil Effect)
//store.msuextension.org --Montana State University Extension Publication 2016 Edition—A Guide
to Serving on Boards, Districts, Commissions and Committees.
Carolyn R. Taylor, Ed.D. M.N. R.N.