Best Practices in Board Governance


Outcomes


Best Practices in Board Governance

The board chairman of World Relief and Youth for Christ International discusses Christian nonprofit boards.

Interview by Frank Lofaro

Christian Leadership Alliance president Frank Lofaro recently interviewed Sam Wolgemuth on the critical roles of Christian nonprofit boards.

You have served on several boards of directors for Christian nonprofit ministries. Can you share those?

I presently chair two boards, World Relief (WR) and Youth For Christ International (YFCI), and sit on two others, the Evangelical Christian Credit Union and St. Margaret's Episcopal School.

I was a director of Freedom Communications, Inc., when I was CEO there. I've been on the board of a symphony and a local church.

What motivates you to serve on Christian nonprofit boards?

I care about the witness of Christ in the world and want to see that exemplary leadership characterizes organizations that bear the name of Christ. Christian board work is, I believe, God's calling for me at this time in my life.

Why is board governance important?

The most fundamental reason is that everybody needs a boss. No one can be completely trusted, including me. So boards exist because of human weakness. We all need accountability, even the CEO—especially the CEO. Boards exist as the final authority for the organization.

I know a prominent leader who distrusts boards because they "slow things down." I once asked him whom he reported to. To clarify, I added, "Who can fire you?" He told me that he was accountable to his senior team. "No," I responded, "you can fire them. They cannot fire you." After further thought, he named his wife. He was kidding himself and was courting disaster.

What are some unique opportunities and challenges presented to you as chairman of the board at YFCI?

Every board's biggest challenge is getting the right board members. When I joined the YFCI board, it had too many insiders, people on the payroll of the organization. There were few independent trustees. Insiders can be helpful, but often they are focused on building resources for their own areas. Independents should have a broader viewpoint and greater interest in the longer term—in mission, vision, and strategy.

The board needed to reflect the global reach of YFCI, which is active in 100 nations. Today, our board has only two American-born members. The remaining 11 are from the Dominican Republic, Brazil, Bangladesh, Germany, Singapore, Norway, Jamaica, Rwanda, Kenya, Holland, and Australia.

You might think that wide varieties of culture and experience could undermine the oneness that characterizes effective ministry boards, but the opposite is the case [with YFCI]. All we have in common is the Cross of Christ and passion to see young people come to him. Those draw us together as nothing else can.

You also serve as board chairman for World Relief, which is part of the NAE. Who does the World Relief board represent?

More than half of World Relief's board members are in full-time ministry, and most are part of the National Association of Evangelicals (NAE) member churches. Further, there are two ex-officio seats on the board for NAE's president and chairman. In the work of World Relief, very little differentiation is made between NAE member churches and U.S. evangelical churches. There are no disagreements over whom the board represents. We represent churches.

That raises a larger question: In your perspective, whom does a board of directors ultimately represent?

Every board exists to represent the organization's owners. That's true of business [for which] the owners are shareholders, and it's also true of nonprofits. YFCI is owned by its 80 chartered nations. When the nations gather every three years for the General Assembly business sessions at which they elect the board, each nation—the smallest and the largest—has the same number of votes.

For some organizations, the owners may be harder to identify, so it's important for the board to decide who the owners are. Whom does the board represent? What should be clear is that the board does not own the organization, any more than the CEO does. Ultimately, of course, God owns everything. But a board must be careful not to allow that reality to cause it to simply say, "God is our owner," and thereby dodge the question of whom the board represents. To do that is asking for trouble. I mean, who decides who is going to speak for God in the boardroom?

What is the secret to creating an environment of trust and cooperation on the board of directors?

There is no substitute for really getting to know one another. From that come respect, candor, mutual trust, and common purpose. Is it possible that Jesus had ministry boards in mind when he prayed, "… that they may be one as we are one"? (John 17:11)

Unfortunately, sometimes board members come with hidden agendas, often around loyalty or opposition to the CEO and his agenda. Until the secret is exposed and all the cards are on the table, the board cannot be fully effective. It takes courage and sensitivity to confront the problem and expose it to the light. When the agenda is open, the board can take steps to deal with the implicit conflict of interest by recusing the member from any action related to that personal agenda.

What are the most critical roles of the board of directors of a Christian nonprofit? How do Christian boards sometimes fall short of this ideal?

Every board has to be able to answer these three critical questions: (1) Who are we? Core purpose, core values. (2) Where are we headed? Vision and strategy. (3) Do we have the right CEO?

Too often our boards, while well-meaning, unfortunately get involved in nonboard minutia by confusing ends and means. Ends are the board's work. Means are the work of management.

What is the board's role relative to the Christian nonprofit CEO?

The board must understand that it has just one employee: the CEO. And the board needs to care for that employee as it expects the CEO to direct and care for her own staff. That means competitive salary and benefits, and concern for housing, health, and the CEO's family.

It may mean stepping in to help out in a personal crisis. It also means helping the CEO to avoid conflicts of interest or anything else that might undermine effectiveness.

One of the most valuable things a boss can do for an employee is to provide timely and accurate feedback. Every board must do an annual CEO performance evaluation, ideally combined with a similar instrument that provides feedback from the CEO's staff.

What is the board's interaction with ministry staff beyond the CEO?

A common role of nonprofit board members is as volunteers. That will usually mean working shoulder to shoulder with staff members. It's important for the board member to remember that he has no special status with the staff outside of the boardroom. He must also be sensitive to the reality that what goes on in the boardroom must stay there and is not grist for conversation with staff.

On the other hand, a board member can provide a shoulder to cry on for troubled staff and may, in extreme circumstances, provide a link to the board for a whistleblower. Careful listening and a sympathetic but noncommittal attitude are essential for situations like this. In any interaction with staff, a board member must never engage in gossip or muckraking or other compromising behavior.

How can a frontline manager or director be supportive of a board of directors?

There are many ways that staffers can support the board: by helping board members find volunteer work suited to their gifts. By helping to identify the candidates who might make great board members. (But I must caution here: No one should approach a prospective board member about serving without the consent of the board.) By voicing support for the board and its policies, if that can be done honestly. By limiting criticisms of the board to conversations with the CEO or board members.

What can Christian nonprofits learn from successful for-profit firms such as Freedom Communications, where you served as CEO, or McGraw-Hill Companies or News Corporation, where you served in executive roles?

From my experience, the best for-profit firms operate with a higher degree of urgency, and so do their boards. That means that critical issues get dealt with in real time and decisions get made and acted on. These companies set high performance standards, measuring and responding to success and failure much more directly. Since Enron, the Securities and Exchange Commission has demanded greater transparency and accountability from every publicly traded company, and the public has come to expect it. If you haven't seen a similar commitment to higher professionalism by your board, somebody isn't paying attention. There is no reason why Christian nonprofits can't emulate these qualities, all the while working for a much higher cause.


Sam Wolgemuth (sam@wolgemuth.net) was the CEO of Freedom Communications and has held executive positions with McGraw-Hill, News Corporation, Reed Elsevier, and Paramount. He is a lay eucharistic minister at St. Margaret's Episcopal in San Juan Capistrano, California.

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