The BoardSource Nonprofit Governance Index 2010, released at the 2010 Leadership Forum in San Francisco, reports on data collected from surveys of 978 chief executives and 780 board members (all BoardSource members as of the survey date). While the sampling methodology did not allow for results that are representative of the sector as a whole (e.g., underrepresentation of smaller charities and local nonprofits, overrepresentation of organizations that have an independent audit), the Index provides valuable information in several areas. Here are some of the results that I found most meaningful as an attorney for nonprofits:
Board Performance Ratings (0-4) – board members survey
Understanding organization’s mission – 3.65
Financial oversight – 3.36
Legal and ethical oversight – 3.14
Monitoring organizational performance – 2.87
Providing guidance and support to the chief executive – 3.24
Evaluating the chief executive – 3.06
Understanding board responsibilities – 2.97
Community relations and outreach – 2.70
Increasing board diversity – 2.39
Most Important Areas for Board Improvement – board members survey
Fundraising – 54%
Focus (more strategic, less operational) – 27%
Board composition and diversity – 24%
Board development/orientation – 23%
Governance Issues on Form 990
Written conflict of interest policy – 95%
Signed conflict of interest and annual disclosure statements – 87%
Written whistleblower policy – 86%
Written document retention and destruction policy – 83%
Formal, written performance evaluation of the chief executive – 71%
Comparable data when determining chief executive compensation – 71%
Provide board members with a copy of Form 990 before filing – 74%
Lesson: If you don’t have such policies, you may be in a shrinking minority. That’s bad if you’re a board member who wants to show that you’ve exhibited reasonable care in governing the organization. Also, the organization will stand out more and more to the IRS agent deciding on a potential examination/audit.
Most Common Committees
Governance/Nominating – 83%
Finance – 83%
Executive – 78%
Audit – 27%
Miscellaneous
Average board size – 16
Boards with term limits – 70%
Average maximum [continuous] tenure – 7.2 years
Organizations using consent agendas as meeting practice – 55%
Organizations with dedicated board Web site – 26%
On average, boards meet 7.4 times per year
An average board meeting lasts 3.4 hours
84% of boards have average board meeting attendance of 75% and higher
Boards have an average of 5.6 committees
Diversity
Board members – 84% Caucasian, 52% male, under 30 – 2%, 30-39 – 12%
Chief executives – 88% Caucasian, 64% female, under 30 – 0.5%, 30-39 – 6%
We’ll devote a future post on nonprofit board diversity. It’s alarming to review these numbers with the additional findings that 63% of organizations reported that they incorporated diversity into the organization’s core values and 74% of board members are satisfied with their diversity. Seriously?