Joining a not-for-profit (NFP) board can be an exciting and rewarding step for executives. For many, holding an NFP directorship is a way to give back to the community or to an important cause, for others it may be a way to build their experience and skills with an eye toward a non-executive director career with for-profit companies. Joining an NFP board is a rewarding experience, but there are several things you should consider before accepting such a position. Here are six questions to ask yourself to help you at key stages on your journey to becoming an NFP director.
1. Do I really have the time?
It is easy to get swept up in the excitement of becoming an NFP director, particularly if you have been already been asked to join a board. This excitement leads to perhaps the biggest and most overlooked issue associated with being a director – enough time to contribute at the level required. The fact is that being an NFP director, of a small or large organisation, will take up a significant amount of your time.
The time commitment required to fulfil a director role is approximately 30 hours per month – that works out at about 45 days per year you need to devote to a single director position. If you are already busy with work, family and other personal commitments it is all too easy to let the work required for your role on an NFP board slip to the bottom of the pile. It is also worth noting that as the size (by revenue) of the organisation increases, or if you hold a position on the board such as treasurer or chairperson, the time required to fulfil the role increases. In short, ask yourself whether you truly have the time, or are willing to make the time, to fulfil a board role. If you do not, there may be other ways you can better contribute to the organisation.
2. Do I know how to perform a director role?
Before taking on, or going in search of, an NFP director position, you should invest the time, energy and money to educate yourself about how to fulfil the role of an NFP director. Having a clear understanding of the roles and responsibilities of an NFP director, what you should expect from a board, what it will expect from you, and the skills and knowledge required to fulfil the role is critically important. Having insights into these areas will also help you decide whether becoming an NFP director is really for you.
There are no shortage of resources available to start educating yourself and as with everything these days you can spend anything from nothing to thousands of dollars on various educational resources. The best place to start is with the abundant free resources available (Better Boards offers over 250 free articles on NFP governance and leadership at www.betterboards.net/articles) before you commit to multi-day courses or certificates. Once you have begun educating yourself, however, it is definitely worth investing the money in some form of course or conference to further your education.
It is worth noting that once you have attained a seat on a board the learning should not stop, you still need to invest in on-going education in exactly the same way you would for your professional development at work. Any board worth joining will encourage its directors to engage in on-going director professional development whether it is online courses, reading or attending director events and conferences.
3. Don’t I have to be a lawyer or accountant to be on a board?
Many NFP boards traditionally recruited accountants and lawyers to the board as in the past these were the types of skills, knowledge and experience their organisations required. However, most boards have now realised that a more diverse mix will help them create greater value for the organisation. A board with directors of only a single or limited range of professional backgrounds certainly does not provide that. Thus in their recruiting most smart boards have become focused on capabilities beyond domain of expertise in accounting, legal or general business/management skills. Whatever the professional skill set you have, it is likely there is an NFP out there that would welcome the contribution of your skill set at their boardroom. As an aside, directors with a high degree of literacy in technology are becoming more sought after by boards. A board will also be looking for things beyond purely technical knowledge that you may be able to bring to the table, such as your network and an ability to fundraise or influence important/key people in industry. You should also note that even if you are not an accountant or a lawyer, you will still need to have a good handle on the legal ins and outs of being a director, as well as how to read and understand financial documents.
4. How do I find an NFP director position?
While there are sometimes NFP director positions posted on online listing sites like Pro Bono Australia’s job listing service, many director positions are not always widely advertised. Perhaps a more effective method is to let people know that you are looking for a board to join. Reaching out to people in your network is the first step and actively “keeping your ear to the ground” is equally important. Recruiters who specialise in paid director recruitment also sometimes take on NFP clients. Similar to when you are looking for any new position, recruiters can be a useful resource as they can leverage their own networks to help you find a position, plus they can help you prepare a tailored board C.V. – just recycling your executive C.V is not sufficient. Just as when you are job seeking, you should ensure you are prepared so that when the right NFP board position comes along you can put your best foot forward.
5. Does the organisation align with my values?
When you do find a board to join, it is important to ensure that your own personal purpose and values align with the purpose of the organisation. To do this you need to become clear on what your own personal purpose and values are. Uncovering your personal purpose is a process that takes time, but one that will pay dividends. A great first step to understanding your personal purpose is to take the Individual Purpose Diagnostic offered by Imperative.
Once you truly know and understand your personal purpose, you can utilise this to assess whether there is a purpose fit between yourself and the NFP board you are planning to join. If the organisation has not explicitly articulated its purpose, look closely at the documented vision, mission and values. Also take the time to observe whether the stated vision, mission and values actually align with how the organisation, its directors and senior executives act and behave. Many people join NFP boards because they want to give back, but without aligning at a purpose, values and culture level with the organisation and its board, serving on the board may be a waste of time for both you and the organisation.
6. Have I undertaken the necessary due diligence?
Before you join any board, even if it is attached to high profile organisation doing amazing work, make sure you undertake rigorous due diligence on the organisation and its board. The list of things you need to do due diligence on is extensive, but it is important to cover as much as you can in order to ensure that you are not placing yourself in a bad situation. As a director you do take on significant legal responsibilities, ones which if not properly fulfilled can have very real consequences and risks, many of which are legal (both criminal and civil) but some are also reputational.
At an absolute bare minimum here are five important questions you should aim to answer as part of your due diligence process.
1. What type of legal entity is the organisation? This affects your responsibilities and potential liabilities.
2. Are there any currently pending or past legal (criminal or civil) claims against the organisation, its board or executive team?
3. What is the reputation of the organisation like in the wider community?
4. Have you been provided with the constitution/articles of incorporation, a full set of up-to-date audited financials, the strategic plan and a copy of the board’s policies and procedures manual?
5. Have you been provided with a position description that outlines what is expected of you and what you can expect from the board/organisation?
The key with due diligence is to ask plenty of questions and to keep on clarifying things if something just does not seem right.
Joining an NFP board is a commitment that requires time, knowledge and skills, a commitment to ongoing learning and a commitment to the organisation’s purpose and mission. Joining a board is not for everyone. If you are serious about finding an NFP board position it may take some time to find, but in the end becoming an NFP director can be a rewarding experience that can help you to make a significant impact.
Raphael Goldsworthy is the Managing Director of Better Boards Australasia. He regularly writes and speaks on leveraging the power of business for social good, governance, leadership, technology and not-for-profits.
Find out more about Better Board Australia by visiting: www.betterboards.net
To read and download the full profile click on the cover image below. To view this editorial as it appeared originally in The Australian Business Executive magazine, click here.