Assessing Board Performance is Critical to Maximizing Performance
February 21, 2012Remember Ed Koch, the mayor of New York City from the late 70s to mid-80s (who then went on to achieve real fame as the host of one of those TV courtroom shows)? No matter where he went in the city during his tenure as mayor, he would always ask residents the same question: “How am I doing?” He said it so frequently it almost became a caricature, but I believe it was a very sincere attempt by the mayor to get an unvarnished assessment of his performance from the people that mattered most – his constituents. When you think about it, assessing performance is one of the most effective ways to change behaviors in ways that can maximize performance. I’m sure almost every reader of this blog experiences this type of assessment every year during annual performance reviews. We meet with the individuals whom we manage (and who manage us) and take stock of the things we do well and the things where we could use a little work, with the goal being to enhance what we do to make us more valuable to the organization and more successful as individual professionals. Can the same type of performance assessments be applied to Boards of Directors? Absolutely. In fact, the most successful organizations – for-profit, not-for-profit, and everything in between – make it a habit to assess their Board’s performance on a regular basis. Who does the assessment? The Board members themselves. The Alliance studied the practices of highly successful organizations in an effort to determine how the principles they utilize to assess Board performance and change behavior could be applied to fraternals. We reviewed a variety of Board self-assessment tools and discovered that none of the existing ones adequately addressed the unique organizational structure and social and business missions that characterize fraternals. These self-assessment tools were either dominated by profit-driven issues in the case of traditional, for-profit businesses, or fundraising issues in the case of charities and foundations. When it came to fraternals, none of the models were “just right.” So the Alliance did the only thing it could do – created our own tool just for fraternals. Working with BoardSource, an organization committed to assisting all types of not-for-profit corporations with governance and operational issues, the Alliance developed a Board Self-Assessment Survey that focuses on the commonalities shared by all fraternal Boards, large and small. The online questionnaire is designed to be completed anonymously by individual Board members. The completed surveys are sent automatically to BoardSource, where the results are compiled and, if requested by the society, an analysis and recommendation for how the organization may want to address some of the concerns raised by Board members is provided. The Alliance took a few weeks to test the survey on its own Board and the changes in the way the Alliance Board operates post-survey have been remarkable. Here are just a few of the changes that the self-assessment has yielded:
- Overall, members felt pleased with the way the Board operated, but there was a clear need for more clearly defined expectations of Board members and a much more definitive orientation process for new Board members. As a result, the Alliance will institute a one-day orientation session for Board members this year.
- Board members also expressed a desire to remain focused on strategic issues rather than operational ones. To address that concern, the Alliance has revamped its strategic planning and budget development process to more fully engage Board members and to measure progress toward the organization’s strategic goals at every Board meeting. Moreover, the Alliance Board approved a compensation program for staff based on the successful achievement of specific strategic goals.
- The Board identified an “information gap” on the Alliance’s need to balance dues and non-dues revenue in order to ensure that the organization has the financial strength to accomplish its advocacy and information goals. As a result, leaders from other industry trade groups will be invited to present at future board meetings with the goal of expanding the board’s knowledge of what other trade associations and related industry organizations do to add value and generate revenue.
- Board members expressed real concerns about cultivating future leaders of the organization and ensuring a smooth CEO succession plan. Future Board meetings will include a specific agenda item on potential Board and Committee candidates from both large and small societies who may bring unique skills to the Alliance. In addition, the Alliance Board created a task force to develop a CEO succession plan that will ensure a smooth transition when the time comes.