Business as usual.

The professional staff and board members for a large nonprofit organization had their annual board retreat in Lake George, N.Y., a resort location. The setting was gorgeous. But don't get the wrong idea--this was not an extravagant boondoggle. Serious business was taking place.

In many respects, the very future of the organization and its residents was at stake. There wasn't an immediate crisis with a short time line for recovery, but this progressive organization knew that the external environment for nonprofits was changing dramatically. Board members also recognized that making some tough decisions involving internal change was becoming an imperative. Successful board retreats require very detailed planning.

For-profit and nonprofit director roles are converging. It's common knowledge that corporate governance issues have dramatically increased the responsibilities of public company directors. And the same is now true for nonprofit directors.

The participants at the Lake George retreat recognized that many of the issues and responsibilities between these two business sectors are actually converging. The mandates of Sarbanes-Oxley, the necessary but challenging new corporate governance requirement for the for-profit sector is now emerging as seminar content and educational central themes for the nonprofit sector.

Nonprofits are quickly recognizing that highly structured, proactive and involved boards are not just for the for-profit companies attempting to satisfy shareholders and comply with SEC regulations. Properly planned board retreats will become an annual event for most progressive nonprofit organizations.

The board retreat setting. The setting for this retreat was important because a lot of significant business had to be accomplished in a very focused environment. Today, well planned board retreats are 7080 percent hardcore strategic business issues and mission objectives and 20-30 percent networking, communication and recreation. Interaction in a non-distracting setting is a major objective of these board retreats.

This retreat, like many others, involved four key constituencies; the executive management leadership, the professional staff, board members and an independent outside facilitator.

Strategic retreat objectives. A key expected outcome was to optimize operations to respond to existing internal problems and emerging external challenges. A well planned board retreat accomplishes four major objectives:

[1] Bringing professional staff and board members closer together in an informal but structured setting.

[2] Sensitizing the board about the need to deal with complex current and future issues.

[3] Allocating dedicated time to focus on what's really critical for the future of the organization.

[4] Establishing a forward looking plan with tangible and specific initiatives and action items.

THE 'TOP FIVE' PLAN FOR BOARD RETREATS

I. Typical Current Issues:

1. Product obsolescence--aging physical plants

2. Competing for product, price and value with newer competition

3. Financial distress *

4. External threats; regulation and liability insurance

5. Changing savor mixes; declining private pay ratios; the Medicaid bed deficit

Striking a delicate balance between future financial viability and mission objectives

II. Some Future Issues

1. Changing consumer "birthmarks" and psychographics 

2. Emerging actuarial imbalance and financial deficits of life care programs

3. Market-responsive pricing models for the future

4. Assessment of real estate taxes

5. Demonstrating true charitable content

The disconnect between existing resident satisfaction and the preferences of tomorrow's senior prospect

* Sagging occupancy, less than efficient operations, unacceptable profit margins bond covenant violations

Source: Moore Diversified Services, Inc.

Jim Moore is president of Moore Diversified Services, a Fort Worth, Texas--based national seniors housing and health care consulting firm. He is author of Assisted Living 2000 and Assisted Living Strategies for Changing Markets. He may be contacted at [phone] or [e-mail].