Own the Details, Don’t Let Them Own You

By J. Patrick Traynor

Most boards are aware of their three primary fiduciary responsibilities:

• Duty of obedience: The responsibility to remain true to the organization’s mission while ensuring compliance with all federal, state, and local laws
• Duty of loyalty: The obligation to cast aside any personal or professional interests and put the needs of the organization first
• Duty of care: The burden to ensure an information-gathering and -reporting system exists and that it adequately flags the CEO and board members in a timely manner

What most board members are not aware of, however, is how little time should actually be spent on these important but largely administrative matters. To clarify, while boards do need to ensure the development and regular review of organizational bylaws and policies, budgets, and important documents, these activities need to be kept in their place or they will easily consume too much of the board’s valuable time — time that should be spent dreaming boldly and imagining how to 10x their organization.

We recommend a simple three-step approach for ensuring your board is taking care of the details while not losing sight of their real job: thinking big.

1. Govern it.

High Impact Boards employ a task force or committee to ensure the dotting of i’s and crossing of t’s.

The first step is to assemble a group of willing and qualified directors to oversee a well-thought-out, systematic approach to taking care of important organizational details. This group will be officially charged with ensuring staff compile a master annual organizational checklist of important activities, documents, and deadlines — along with an accompanying implementation calendar. We recommend at least an annual committee review and periodic board reporting on this system.

The master checklist, which we have provided an example of below, and calendar will vary depending on the size and mission of your organization. Some examples of what to include in your checklist are:

• Annual staff evaluations
• Local, state, and federal license and fee requirements
• Annual conflict-of-interest statements for board and staff

Management is responsible for executing and reporting on progress made on the completion of duties identified in the annual calendar.

The committee should also ensure that staff gather all important documents, forms, and policies in one easily accessible location. Each nonprofit will be slightly different.

2. Guide it.

Once all the information has been organized and archived, it’s essential that the appointed committee guide the process by establishing a formal annual timeline to review and approve, as necessary.

Ideally, your nonprofit’s committee will work in harmony with the board chair and executive director to develop a schedule that fits into the annual rhythm of the organization.

This schedule is essential because some of these documents will need to be reviewed and submitted to comply with formally established deadlines — IRS forms 990 and 5500, the annual plan and budget, and licenses and certifications. Other documents such as income statements and balance sheets will need to be reviewed and approved monthly or quarterly. Still others such as personnel and record-retention policies may only need to be reviewed every 12-24 months.

3. Guarantee it.

With the annual review schedule of all essential documents and activities established, the final step for this committee is to guarantee that the process lives on even after its members have cycled off the committee. This means working with the nonprofit’s CEO and key staff members to establish an internal policy and system where all of this important information can be effectively managed, maintained, and periodically reported to the board.

An effective system will ensure key activities get done on time and make locating the organization’s essential documents much easier. It will also serve as a reliable anchor in the event that there’s turnover among key organizational leaders.