How Association Boards Add Value.

Associations seeking to enhance their board's ability to lead in a change environment are embracing such governance innovations as board self-assessment and a vision-based-rather than constituency-based-board structure.

Associations are more receptive than ever to new organizational and management strategies. Just witness the growing interest in learning organizations; mergers, partnerships, and alliances; joint ventures between associations and for-profits; new communication technologies; and the rise of subsidiaries.

If association leaders are eager to embrace changes in management constructs, why, then, haven't governance strategies and structures changed as rapidly? Why have nearly all conventional association management practices been challenged well before board operations, even though current association governance models often fail to live up to expectations?

The ASAE Foundation's recent research into major trends and issues affecting associations, "Facing the Future," reaffirms the need for associations and their boards to reshape themselves to remain competitive, to continue to be relevant to their members and the public, and to add unparalleled value to their organizations.

The foundation's research, which reaffirms that a strong board is one of the most valuable assets available to an association, also sees change as inevitable. "The governance structure and process in associations will have to change dramatically," notes the report. "The current model is too slow and cumbersome to deal with in an increasingly complex, fast-paced environment."

Association boards can begin to address the need for change by considering the question, "How can our board add the most value to the association as a whole?" The ASAE Foundation's report stresses the importance of value--"if your organization isn't demonstrating its value on an ongoing basis, some other organization will."

Today, more than ever, boards must add real value to their organizations. Board activities must be structured to be meaningful and engaging, and boards must be more accountable and more diligent in their fiduciary duties.

How, then, does the association governance structure prepare itself to operate in a fast-paced environment and demonstrate its value to the work of the association? Association boards add value in many ways: by establishing clear boundaries between management and governance, by nurturing a culture that allows staff to take risks and make mistakes, by advocating for the association or industry.

A board's strength flows from its basic responsibilities and hinges upon the way those responsibilities are carried out. Association boards can position themselves to adapt to a changing environment, while adding significant value, in two fundamental ways:

* Periodically assess the way the board operates.

* Structure the board so that it can adapt to changing circumstances and provide capable, independent leadership to the association and industry as a whole.

Board, assess thyself 

Although management catchphrases have changed across the years--total quality management, best practices, and benchmarking, to name a few--the importance of assessing performance as a tool for continual improvement remains constant. For whatever reason, the proliferation of board assessment as a tool to strengthen associations has lagged far behind that of programmatic assessment.

Board self-assessment may not have emerged as a priority because association members and other constituents have never required that boards prove their effectiveness. As Robert Andringa and Ted Engstrom note in the Nonprofit Board Answer Book (National Center for Nonprofit Boards, 1998), "Boards are notorious for neglecting evaluation of any kind." The authors go on to argue that "good governance doesn't happen without some kind of sensitive evaluation of those doing the governing."

Board self-assessments serve many purposes, some internal to the board, some in relation to members and other constituencies, but all for the purpose of increasing the value of the board and its work to the association.

Consider the experience of the Washington, D.C.-based American Association of Museums, whose board has conducted self-assessments twice in the past three years. Edward Able, CAE, AAM president and chief executive officer, says the board decided to participate in a self-assessment because it feels "it's just as important to assess the governance of the association as it is to assess programs and staff."

A major benefit resulting from AAM's board self-assessment process, notes Able, is that "for what may be the first time, it brings to the board's attention that [board members] should be looking at their own performance as a collective unit and as individuals. The process helps to remind board members of their primary roles and responsibilities and to identify appropriate behavior and performance standards in a thoughtful way."

Not only does board self-assessment give occasion for the board to reflect on its roles and responsibilities, it involves the entire board in the process at the outset and allows an equal voice to all members. Recommendations and ideas for improvement that originate with the board are also more likely to spur changes in board attitudes, structure, or operations.

This is not to say that self-assessments should exclude input from external sources, including the chief staff executive, other association staff members, and industry representatives. It does indicate, however, that in addition to providing the basis for important restructuring, self-assessments serve a significant consciousness-raising function among board members. As Able observes, "Not only is the board more conscious of its behavior as a group, but individual board members pay much more attention to their performance prior to, during, and after board meetings."

Many meaningful contributions that association boards make can flow from a self-assessment exercise. By spotlighting individual and collective responsibilities and by pinpointing questions that need board attention, the self-assessment serves as a springboard for many types of board improvements, such as

* increasing the level of board teamwork;

* refreshing the board's understanding of its role and responsibilities;

* providing an opportunity for clarifying mutual board-staff expectations;

* demonstrating to the staff and others that accountability is a serious organizational value;

* measuring progress toward existing plans, goals, and objectives;

* shaping the future operations of the board; and

* providing credibility with funders, sponsors, and other external audiences.

As a result of participation in a board self-assessment, the Hillsborough County Bar Association, Tampa, Florida, has changed its monthly meeting format, revamped its risk management policies and programs, and enhanced its understanding of board and staff roles.

"We have made some changes with the hope that we could maximize the use of board and staff skills," says Connie Pruitt, HCBA executive director. "The leadership is making sure that we are an association that recognizes and focuses on members' interests and identifies external dynamics that affect members and the practice of law. We are positioning the association strategically for constant improvement by focusing on what success in the future looks like."

During a self-assessment exercise, difficult issues are often raised such as whether the current size of the board is appropriate, whether the board should continue to be externally elected by the membership, whether it should consider becoming self-perpetuating, or whether certain constituents outside the association's membership should be represented on the board.

With such weighty issues to consider, every effort needs to be made to construct a self-assessment process that is appropriate to the specific association board. AAM's Able offers these recommendations:

* Hire a consultant to conduct, analyze, and facilitate the assessment.

* Obtain input on the assessment survey from the full board as a way of engaging all members in the process.

* Document clearly the outcomes and conclusions to chart the necessary actions that result from the discussions following the survey.

* Support and encourage board members to actually make the changes identified during the process.

A final reminder: Although it serves as a terrific starting point for transforming the board into an entity that adds significant value to the association, the self-assessment process is most effective when the organization and board are relatively free of crisis. The process is designed to make good boards even better, rather than to rescue a failing board.

Strategically positioning the board

Dee Hock, the founder of Visa, coined the term chaordic to describe the tension between chaos and order that exists in many healthy organizations. Brenda Zimmerman, an expert in chaos theory and director of the Voluntary Sector Management Program at York University, North York, Ontario, Canada, puts it slightly differently. She has noted that management theory suffers from "physics envy," suggesting that if only we could bring things back to equilibrium, all would be well. Yet absolute balance and calm are neither possible nor desirable in organizations.

Zimmerman points to ecology as a better model than physics for what happens in a real organizational environment. In an ecosystem, a crisis can lead to positive change. A forest fire may be devastating for the underbrush, but may be beneficial to the health of the entire system when it allows new opportunity for long-term growth. By trying to stop the small fires, we may be inviting a larger disaster.

Translating this analogy into the board context: Association boards, like a healthy ecosystem, must be prepared to adapt to changes in their environment and recognize that crisis often leads to opportunity. Board members must be courageous enough to surface embedded assumptions, challenge them, and encourage change when it is needed--no matter how painful the process might be. After all, board self-assessments often raise issues that lead the board to consider revamping the way it operates. Although boards are inherently change-averse, change is often necessary before the board can truly begin to add value.

Looking at structure

An appropriate board structure must be in place for the board to lead effectively. Boards may begin to question the way they are structured for many reasons, for instance:

* The board is too large or cumbersome to make decisions effectively.

* The board structure may no longer be flexible enough to handle current challenges.

* Board members' ideas may have become outmoded.

* The association's constituency has evolved.

* The board structure doesn't support the association's desire to foster strategic collaborations and partnerships.

* Board composition doesn't provide a broad enough mix of skills, talents, and community connections to lead effectively.

Some association board structures inadvertently hinder big-picture, vision-based thinking. For example, many association boards are elected by the membership at large. Some have a certain number of board seats designated to "represent" particular membership constituents (by characteristics such as geographic region, company size, or professional specialty area). Still other associations hold open elections, with all candidates coming from within the membership.

As an association's membership grows, the size of the board often expands to accommodate representatives of new groups. This can lead to a fairly cumbersome board structure that doesn't provide much flexibility. This is not to say that representative boards fail as stewards of the association's mission, merely that there is an inherent conflict between advocating on behalf of a particular constituency and making decisions that are in the best interest of the association as a whole.

Similarly, in many cases, board members serve one-year terms, which results in frequent turnover of board membership. By the time a new board member fully understands his or her role, the year has ended and a new batch of board members is elected.

A burgeoning trend in the association community is to move away from boards that "represent" certain constituencies to boards that are vision-based--focused entirely on what is best for the organization and industry. The thinking here is that representative governance models don't allow for careful consideration of board composition, and may tend to promote factionalism and a highly politicized governance process.

Vision-based boards add value

For the Alexandria, Virginia-based consortium Women in Community Service, the transition from a constituency-based to a vision-based board has transformed the board's ability to lead. Structural changes enabled WICS to recruit board members who specifically related to the mission, according to Ruth Herman, WICS president, who explains that "board members were previously appointed by the five member organizations that originally created WICS in 1964. At some point we realized that if we were going to get to the next level, to accomplish what we needed to do, we needed a strong, active board."

To create that type of board, the organization realized it needed to be deliberate about board composition. WICS's board formed a governance task force to look at the current board composition and make recommendations for how the board should change to add more value to the organization. The task force, which included some of the current board members, recommended a more deliberate, focused board recruitment strategy, rather than the traditional system of board members being appointed by WICS member organizations.

"Our board meetings used to be dog-and-pony shows," says Herman. "All we did was showcase accomplishments, but what we needed the board to focus on was strategy. Board members need to be engaged in forecasting, visioning, and planning.

"The new structure has definitely contributed to the board's ability to provide leadership, but it didn't come without making some tough choices," she adds. "In the past two years we have had almost complete turnover on the board. All but three board members of our 15-person board were appointed in the last two years."

A change in governance structure is also afoot at the Service Corps of Retired Executives Association, Washington, D.C., which has always had "a constituency-based board," says Kenneth Yancey, Jr., SCORE executive director. "Board members were often elected based on popularity, rather than on [their ability to] set direction for the organization. Since board members were focused on what was best for the region that they represented, national decisions were made based on the local context and experiences, rather than from the perspective of the organization as a whole," he explains. "The board spent meeting after meeting talking about how we do things, but we never got around to focusing on who we serve. It was a more provincial approach to decision making."

SCORE first considered changing its governance model of a representative board elected by members to a self-perpetuating board ratified by members at a 1994 board retreat. In a self-perpetuating governance model, board members themselves would be solely responsible for nominating and electing new members to their ranks. In SCORE's case, the board still wanted to afford members some voice in choosing board members by giving them the power of ratification--essentially, veto power.

Although the board wasn't ready to immediately implement a change in governance structure, the seeds of the idea were firmly planted. However, it wasn't until a 1999 board retreat--after a series of chief elected leaders had emphasized the need for change--that SCORE took action.

The board completely revamped its composition and restructured the nominating process. It established a nominating committee consisting of three board members and two other individuals, usually people from the community who can help identify good candidates and who understand the needs of small businesses--SCORE's primary customer.

SCORE is still in the implementation phase and some concerns about the transition remain. "Because they no longer vote, local chapters fear that the membership will lose control of the organization," says Yancey. "But the board's contention is that the new structure will allow the board to more effectively support the work of local chapters by focusing on new markets, forging alliances, and raising additional funds, rather than tinkering with operations."

Communication counts

Whenever an organization decides it's time to overhaul its governance structure, it needs to consult those most affected by the change--current board members--as well as help members and other constituents understand how potential changes will affect them. Current association leaders are wise to develop among members and other key constituents a common understanding of the need for--and benefits of--changes in governance operations.

A specific restructuring implementation plan, including action items and a timeline, can sustain and implement the commitment to restructuring. Association leaders must also develop, simultaneously, a comprehensive communication plan to announce the changes to both internal and external audiences. The announcements must clearly explain the benefits of restructuring.

Begin at the beginning

The first step in any journey of renewal is to take stock of the current situation. Association boards need to take an inventory, of sorts: What are we good at? What needs improvement? How could we work together better as a group?

Once the board has a clear understanding of the areas that could be improved, a conscious effort to strengthen areas of weakness and consider larger structural issues will eventually lead to changes that will enable the board to act as true champions for the association's vision and its future.

Sandra Hughes is a senior governance consultant for the National Center for Nonprofit Boards, Washington, D.C.