Shifting the role of the board when it's time

If you've ever lost sleep over your board, there might be a structural reason for it — one that goes all the way back to the colonial era. Hillary shares her latest learning from helping organizations make board governance shifts.

Hillary is joined by Rea Carey, a nonprofit consultant with over thirty years of experience leading organizations through some of the most significant LGBTQ+ advocacy victories of the last two decades. Rae shares what healthy boards have actually looked like at different stages of organizational life — from a scrappy founding board at the National Youth Advocacy Coalition to a governing board at the National LGBTQ Task Force — and how she learned to lead both.

You'll hear:

• How boards developed in a power vacuum after the colonies started providing services without a monarchy
• When a working board is helpful, and when its run its course
• What a vote on immigration reform taught Rae about facilitating generative discussions with your board
• How to have the "we might not be the right board anymore" conversation before it becomes a crisis
• Why tokenism happens even when everyone means well — and what to do instead

Guest: Rea Carey (she/they) is the principal of Carey Forward, LLC, specializing in executive leadership coaching, executive staff and board succession and transition planning, and strategic advising. Rea has over 30 years of experience in fundraising, fiscal sustainability, boards of directors, non-profit management, philanthropic giving strategy, and leadership development. Rea was the founding executive director of the National Youth Advocacy Coalition and served as the longest-tenured executive director of the National LGBTQ Task Force until early 2021.

In addition to serving on the American LGBTQ+ Museum board, Rea currently serves on the boards of directors of the Freeman Foundation, the Flamboyan Foundation, and has served on the board of directors for the Alliance for Justice, and other boards and advisory boards. Rea started their career as the HIV/AIDS crisis was taking hold and carries with her the lessons learned from employing strategies ranging from direct-action to advocacy, being responsive to the unimaginable, and in building organizations and mobilizing people to respond to massive challenges.

Rea graduated from Smith College and earned her master’s degree in public administration from Harvard University’s Kennedy School of Government. 

Mentioned: 

Peter Dobkin Hall, A History of Nonprofit Boards in the United States, Board Source, 2003.

Karl Mathiasen III, Board Passages: Three Key Stages in a Nonprofit Board’s Life Cycle, 1998.

Transcript

My name is Hilary Frances, and one of the things I've been thinking about is why we still have nonprofit boards. We know that they were formed during colonial times, we know they're required by law, and we have all lost sleep because of something happening on our boards. So can we do better than this? While I haven't figured out an alternative to the nonprofit board, I have created an episode that will help you take action to make your board effective and worth the effort, and it often means evolving the board's governance structure. You have choices here. Think of it like knowing when to put snow tires on your car and when to take them off. Can't we design cars that don't need tires? Probably, but for now they have tires, so we're going to work with different types of tires. That's today's episode. 

You're listening to Tailwinds: Ideas Fueling Nonprofit Innovators and Social Entrepreneurs. Tailwinds is a project that brings momentum to the leaders tackling the world's most impossible problems. Today's episode has two parts. 

Part one, I'm going to argue that a board's governance structure should match the organization's stage of maturity. Part two, I'm going to play pieces of my conversation with Ray Carey. Ray is a seasoned nonprofit consultant based on the East Coast and has over 30 years of experience in nonprofit leadership and board governance. Rea will tell us about some of the healthiest boards she's led, and then help us identify when it's time to transition our board from a working board to a governing board. And then she'll tell us how to do it. So part one, I recently did some research on how nonprofit boards came to be in this country. Whose idea was it? Because maybe if we understood the origins of the board, we could decide if we still need them. And lucky for you, I am re-recording this section because I started with a seven-minute version of the history of boards in the United States, and then I cut it down to a minute and 25 seconds. You're so welcome. 

So here we go. Boards did start with fundamentally colonial ways of being. When boards first came to be in the 1600s, their purpose was to govern organizations that were operating without the monarchy for the first time ever, which means they were a proxy for an authority figure that everyone was used to having but no longer wanted. So they set it up for the board, or they were called trustees, to represent the wishes of the donors. This role of representing the wishes and perspective of donors got even more pronounced during the Industrial Revolution in the early 1900s when private foundations were forming with the Rockefellers and the Carnegies. And with foundations came increased interest in accountability, which put pressure on boards to offer that. In the mid 1900s, we have a new tax code, the 501[c][3], which meant that boards were motivated to become more professionalized and adopt corporate models for efficiency and legitimacy. Now we arrive at the last stop on the timeline, present day, which begins in 2020 with COVID and includes the impact of Trump's presidency on philanthropy and the delivery of social services. And it's now that we see boards motivated by maintaining the solvency of their organization, which drives them to ask more operational questions than they may have had in the past. 

The summary of all this, boards were founded by colonialism and have always served the purpose of providing checks and balances so that nonprofits are accountable to their donors. And while philanthropy is doing targeted work to rethink the way wealth and power have been tied up for centuries, and philanthropy is inventing fundamentally new ways of being, boards have not. The nonprofit board has not been fundamentally questioned. Can we question it? My answer is yes, but let's figure out how to work within the antiquated system while we question it, and here's how. 

We pay close attention to the governance structures available to us and choose the structure that best aligns with what our organization needs. There are four common types of boards, a working board, a managing board, a governing board, and an advisory board. Some frameworks list them differently, a working board, a governing board, and an institutional board. Regardless of the titles, they progress from more hands-on to less hands-on over time, and you need each of these at different times We'll start with startup phase. You likely need a working board who can do startup tasks. When I was the co-founder of a startup, we had a working board that we recruited with specific talents we needed, like curriculum designers, commercial real estate agents, a lawyer, a fundraising consultant, and even a spiritual director. During your growth phase, you'll likely need a managing board. This is especially true if you hit a growth spurt before you have a deep bench of executive leadership on your staff. And then during your scale phase or when you have seasoned leadership on your staff, you will choose a governing board. This is the type of board that supports your growth and serves as thought partners when called upon. They continue to support fundraising efforts and represent the organization publicly. An advisory board is helpful when you're at a stage of growth where you're making decisions that require insight you don't have internally. I find that an ongoing advisory board presence can feel like busy work, but there are periods of time when they're useful, like when you have a specific question for them So you might be thinking about your current board and wondering if it's time to shift their role from, let's say, a working board to a governing board. 

And I'm going to play clips from my conversation with Rea Carey, who helps us with this. Ray serves as a board member and development committee chair of an organization that I work with. She's also a consultant to high-performing national nonprofits. So I've been paying attention to how she thinks over the years. Sure enough, before my very eyes, I watched her shift the development committee we work with from a working committee to a committee that fits squarely within the governing structure of the larger board. Here's what you need to know about Ray as you listen. Rea leads nonprofits with big agendas, which means that their boards are wrestling with controversy. She leads the board straight into the most important conversation they need to have at any time. As a result, she and her organizations have been at the forefront of achieving some of the most significant advances in the United States over the last two decades, including winning marriage equality, increasing the ability of LGBTQ plus people to participate more fully in society, the military, and places of worship, and working with the federal government to achieve dozens of regulatory and policy changes benefiting young people and millions of LGBTQ plus people and their families. Ray started her career as the HIV AIDS crisis was taking hold and carries with her the lessons learned from employing strategies ranging from direct action to advocacy and building organizations and mobilizing people to massive challenges. She graduated from Smith College and earned her master's degree in public administration from Harvard University's Kennedy School of Government.

Alright Rea, this episode opens with a brief history of boards in the United States, and my underlying motivation in researching the history of board governance to find evidence that boards are a legacy of colonialism thus continue to haunt our infrastructure rather than support it. That's my and no longer secret bias that I've just been struggling with lately and so as I struggle with that bias, I really wanted to hear what you think about this.

First, thanks for having me, Hillary. It's really exciting to be able to be a board nerd with you today. Appreciate it. And actually it was a very provocative, this is a very provocative question because I myself don't know the history of boards. And I was curious if you in fact found them to have, you know, the kind of legacy of colonialism. So I, I think that's a, an interesting topic in and of itself. I do, you know, certainly like many things in the United States there are, and could be remnants of how. Boards functioned a long time ago. Right? Who got to be on them? What purpose did they serve? What did they get to control? What decisions did they do they make? It made me think about how in really the nineties, eighties, nineties, and certainly onto the two thousands, the professionalization of the nonprofit sector. Big shift. Big shift over time. And so, and, and what came with that is an increased attention to boards. And certainly many an executive director has said that they wish they didn't have to have a board. They take a lot of time. They can take a lot of energy and, and sometimes politicking? However. I would also say we are humans and we can adapt and we can push against practices that were oppressive that didn't serve, that don't continue to serve society well civil society. In my experience board really do serve a number of important purposes when they're working well. One is increased capacity, right? You have volunteers who are willing to contribute their time and their expertise. Sometimes their money can gain broader reach as an organization. Right. Access maybe to financing the organization or relationships that are important to the organization, and also community or stakeholder representation. So you know, even as there may be remnants as you looked at, I do believe that. We can adapt and that we can push back against. The, you kind of have this stereotype of at least corporate boards of a bunch of older white men sitting around a table cigars and demanding this from the CEOs. You know, we're not in those times certainly in the sector that I'm aware of anyway. So I think it's, I think it has and can continue to change and adapt.

Okay. So. Let's go with that. How do you think we need to adapt our boards? What, exactly needs to evolve, do you think?

Some things have already evolved, right? Since I'm assuming a hundred years ago, even. These days boards, my opinion is that boards would work best when they serve, they can serve companion roles complimentary roles in service to the mission of the organization. So seeing each other as partners, not as. This is a dominating force over the CEO, right? I do think also and this has been particularly true in the last decade or a couple, there are just different expectations of organizations. Some of this is generational. Some of it has to do with an increased diversity of women, people of color, Trans folks, LGBTQ folks getting involved in organizations who are bringing different perspectives. But it is, it is true more generally in the nonprofit sector that newer people coming into organizations and sometimes, younger generations have a different expectation about engagement, about transparency, about communication not being held back from what's going on in the organization. And so I think it's the adaptations that need to continue to happen are to pay attention to not having boards be top down.

Okay. Can you tell us about a board you've been on or coached that you think is effectively serving the organization?

I have both served on a number of boards and certainly with my clients work with boards of directors and they're, it is a wide range. Very early on in my career, I was part of a group of people who founded an organization. I was the first executive director, it's called the National Youth Advocacy Coalition and focused on LGBTQ youth and Leadership and the infrastructure that served them. And we had a founding board that was outstanding. They were executive directors of community-based LGBTQ youth organizations. We had young adults on our board. We tried to have teenagers, but we also found that the laws wouldn't allow them to vote, which. Annoyed us but we, in other ways, we tried to gain youth perspectives, right? And, and that board was well matched for the founding of an organization, right? So I was the executive director of the first six years. We pulled together this board anew. There'd never been this organization, never been this board. And what was aligned and helpful is that they were. A broad range of people. Very diverse actually, particularly for that time in nonprofit sector. This was in the nineties, and they brought their expertise. They worked, they helped shape policies. They, they helped create this organization. And so that was, we only had, you know, first it was just me and then we got one other person on staff and then another, and, but we were never a significantly large staff. And so at the beginning we really needed people who were willing to put the energy and the time that it takes to create an organization. I will go then to also being an executive director of the national LGBTQ Task Force. I, I had the experience of our board working well, meaning it was a governing board. It is now a more than 50-year-old institution and during my time from 2004 to 2021, the board. Was a governing board and acted like a governing board. They were also fundraising board, right? It is not to say that. That board didn't have its challenges every single board does. We had remarkable people on that board, a broad range of expertise. We had lawyers, we had finance people, we had people who were community leaders. So I, in my experiences, an executive director for the most part, I had a really good experience with my boards so I will also say I serve on two foundation boards that are very small. We only have a handful of board members on each of those. It works really well for the purpose of the organization. One of them has no staff, no full-time staff, and so we're very engaged in the grant making and the processes of that. The other has a large professional staff who really is, excellent and on top of things, and we serve a very different role as a small board for that foundation.

You just gave me two examples of boards that really seemed to be aligned with what the organization needed at that time in their development. So you gave me the example of the National Youth Advocacy Coalition was a working board during startup phase the national LGBTQ task force governing board. More mature organization, more professional staff. Tell me how you think that we align the. Board governance structure with the stage of an organization's maturity.

I am a, it's not even a belief, it's an experience. Organizations absolutely should have a board in its structure, in its composition, how it operates, that is aligned with the stage of the organization. Generally there are three accepted, kind of talked about stages of organizations, a founding or a working board, a governing board, and an institutional board. These were really, these ideas were really well developed by a man named Karl Matthiasson, who I had the honor of working with, and learning from at the Management Assistance Group, he was like a board savant.

Oh.

He frames these. So I anyone should read any of Karl Matthiasson's work. But it's, you know, these three areas founding and working, the governing board and the institutional board, I have not been on or had a client with an institutional board. When I think of institutions, I think like the Metropolitan Museum of Art or like huge institutions well developed. So the reason that it's important to have the alignment is, and also talk a little bit about transitions, is let's say you have a founding board of amazing passionate people, some of whom we're probably friends with, the first staff person there, maybe one step removed from the original staff person, but they're there in it to get this organization up and going and survive the first few years. In order to do that, board members often need to do things that later on professional staff would do.

Yep.

Right? So an organization may move from one staff to three staff to 11 staff to whatever if you maintain a founding board, both in its. Membership and in its functions, it will cause serious challenges when the staff are trying to accomplish something and the board members keep. Calling them and writing them, what about this, what about this? And how about I do that? And it's like that. Thank you for your energy. But we now have a staff member who does that, right? And so that, that is a mismatch.

Okay.

And it's a, it is a exciting and challenging time for an organization when you move from a founding board to a governing board. On a very personal level, you have a lot of people who have spent hours and hours and hours and put, put their heart into an organization who likely no longer serve the roles that the organization needs and board members. Conversely, if you have an organization in its early years jumps too quickly to structure the board. Overly complicated or bureaucratic way, it also won't work, right? If you're like, well, we have to have all these committees and we have to have this and that. It's, it can often get in the way of the, the energy and the momentum of the founding of the organization.

So can you help us figure out how we know when we're ready to make a transition?

Okay.

Some diagnostic questions board members and staff should ask determine if we're ready to change our structure or if it's aligned?

The best way for that to happen is to always talk about it, meaning in the founding of an organization. Yeah. We got seven friends here. We're rocking it. We're on the board, and we know that someday we won't be the best board members. And so if it isn't in a moment of crisis, it isn't reactive, it will go better, so ideally a board would have the consciousness and the maturity, the board members to say, we are awesome for right now, and we may not be the best later. So let's start talking about what the organization might need in a board in the future. That helps to depersonalize it. It helps to actually put the board at the right altitude of thinking. Which is big picture, longer term. So I would start with that honestly, so that the conversation isn't jarring. It's not a surprise. A number of ways that an organization can observe and start to identify that it might be time for some adaptations in its board. Some changes is, has the organization become more complex? Do we have more staff? Do we have a more diversified funding base? Are we while staying true to our mission, expanding the strategies by which we work towards that mission, right? Those are ways that organizations can become more complex and you may need different people on the board who have different expertise. One sign of it might be time to transition your board is increase conflict within the board and between the board and the CEO. Why, why are we having these same arguments? Why won't you let us, talk to the program staff about our ideas for how they should be doing our work? Why, you know, why is there conflict? Sometimes there's conflict because conflict arise and you talk and resolve it ideally, but sometimes it's because there's a mismatch in expectations of what the board. And board members want to be doing or should be doing, and what the organization needs for them. That part and parcel of that is I would describe as role confusion. Another indicator is the composition of the board ref reflects. What's happened in the past for the organization and doesn't really represent what's going on now or especially in the future. There's also, thinking about board meetings and the purpose they serve. So let's say a founding an early on organization, early development organization decided they were gonna have board meetings every month. 'cause there's a lot to do. We're gonna get this done, people are gonna chime in. Well, five years down the road, it probably doesn't make a sense to have a board meeting every month. If the content of the meetings aren't aligned with what the organization is facing what strategic issues need to be discussed, that can definitely be a sign that it's, it's time to look at. W what type of board you need for the organization. And then I think the last piece I'd add is our decisions for the organization being made by the right body of people, right? So in a founding board there, there might be much more conversation with the board about, Hey, we wanna develop this program and dah, dah, dah, and, for, and, and, and I'm gonna, you know, we need to decide that. And maybe the board is like, yeah, we're good. Let's vote on that. Well, later on, the executive director doesn't need the board to vote on programmatic decisions.

Right.

And so there can be a misalignment of, again, expectations and also practice in who makes decisions.

Hmm. Hmm. I love this and I love the, in particular, the point you just made about the content of the meetings. Is it matching what the organization is facing? We organize meetings based on what the business at hand is, not what the organization is facing.

And I don't, you know, Hillary, I don't think it's an either or, right. Yes, we need to have each committee report. We need to go over the finances, we're gonna go through the fundraising, and we've got our PowerPoints. But what are some of the big picture strategic issues to be discussed? And in discussing them, it does not mean that it's necessarily the board's decision.

Okay.

I'll give you an example. When I was the executive director of the national LGBTQ Task Force, we shifted our board meetings to yes, include all the business that really did have to be attended to for the board to serve its role but we started introducing what we call generative discussions and. One of them was we as an organization and I as a leader, wanted to do some work in the LGBTQ movement to increase the visibility and the attention going towards immigration. At the time, the LGBTQ community movement was largely focused on binational couples. As a matter of immigration. Well, needless to say, there are many, many issues that affect LGBTQ people and their families when it comes to immigration. Still are, but believe it or not, that was a very new thing to be talking about. So I brought in an expert from another organization, was leading another organization to come in and talk about immigration. And at that point, the legislation that was in play was comprehensive immigration reform. And so I realized as an organization we didn't, we didn't know what we needed to know in order to make good decisions around this and in order to really move, to push the movement to take on immigration reform. So I brought in an expert. They met with the board. I knew he would be outstanding. The board discussed and we put a very simple policy in front of the board that said, essentially the national Task force will work for comprehensive immigration reform that benefits LGBTQ people and their family. That was it.

That was it.

What was important to me as an executive director was to give the board the information they need in order to participate in a really good conversation and. Even though we could have, I could have, as an executive director, interpreted our mission already to be able to work on immigration reform. At that time, it was important for me, for the board to take a vote to say, this is an organizational priority.


That's such a great example. The generative discussion combined with business at hand. So a meeting that had both of those things in each meeting.

Yes.

Amazing. We need to talk about how to make the shift when it's time. Can you guide us through the process do you think the conversations typically are initiated by the ED, the CEO?

Mm-hmm. I'll go back to something I said earlier which was ideally there are open, explicit conversations about how the board over time will continue to develop itself to normalize it. To not have these conversations in crisis or in the middle of drama. And often it starts with the executive director, CEO, talking with the chair or chairs about it. And then the, if they have an executive committee, the executive committee or a governing committee, something that this is something coming down the road. It is a, part of organizational development, and let's just be explicit about it. So that's really the first thing that sets the stage. Also, in order to enter into a board transition. Again, strong board leadership. Strong board leadership to manage the meetings, to manage the conversations, to have the conversations with individual board members, sometimes to keep things on track. Ideally, an organization will have board term limits in place. What it does is it gives this kind of graceful marker. To have a conversation with board members about how they feel about their own board service, if their perspectives and skill sets and talents match what the organization needs and it gives the opportunity for a graceful exit if needed. Part of that assessment is who is on our board. It's commonly called like a board matrix, listing out all of their board members when they started their terms, when their terms are up, and then what perspectives and talents and expertise do they bring to the board. What's coming up in terms of gaps and who identifying and recruiting board members who can fulfill those roles for the core functions of the board of an organization.

Okay, so it seems like this matrix could also be helpful for identifying gaps you might have in community representation on your board, particularly with lived experience aligned with those you're serving. I think a lot of folks are struggling with how they handle representation in a meaningful way, not a tokenism way. So can you tell us how you coach leaders on this of representation on boards?

Community representation I think has come to the fore for a number of reasons. One reason in some organizations, let's say community health centers who get government grants require community representation, And. That community representation should not be tokenism, as you mentioned. What I mean by that is if you are bringing on a board member, you are bringing on a board member. They are the same in fiduciary responsibility in governing the organization. Possibly even participating in the, in the hiring or firing of an executive director, right? They are a board member. They aren't a lesser board member what can happen, and this, happens in the staff arena as well, is the board says, oh my gosh, we are like 90% white. This is no good. We need people of color on our board. Then they, you know. Rush to identify some people of color who are incredible people may or may not match what is needed on the board. Bring them onto the board sometimes in a way that is tokenized, then the board wonders why those board members either aren't as engaged or maybe leave the board.

And it takes time because the default will be tokenism unless. The board, has done the work to be ready to set down their power, to share their power, to identify their biases.

Yes. If, you have a board that is predominantly male identified and they want more women on the board? Well, if they haven't looked at how power is used and expressed on the board and their own biases as board members, then it's possible that that will not be a good experience for women coming onto the board. And so it's not just like, okay, let's check off this box. It's a systemic organization-wide systemic look at what is our culture, what are our practices? In order to ensure the success of board members coming on and being able to serve well.

And that work could take seven consultants and three years. But it's worth it.

Maybe even eight, but it's also not an excuse to delay.

Rea was right about Karl Matthiasson. In the volumes of blogs you can find on nonprofit boards, Karl's work is my favorite so far. He says it could take three years before a board is effectively transitioned from working to governing, and I know that feels untenable for many of you, but strong leadership and a little levity makes this possible. But here are a few things I've witnessed you all doing that are helping with the transition. One, staff and board collaborate on identifying your stage of maturity. Identify the type of governance structure that aligns with this stage together. Two, recognize the value of the previous structure. Honor it. Three, provide evidence of staff capacity to fill roles held by board members. Four, project the benefits of the new type of governance structure. Talk about how great it'll be. Five, develop a board member profile and expectations guide that aligns with the new stage. Think of it like the job description that allows people to opt in or out to the new role. Tailwinds is a production of Flying Whale Strategies, a consulting firm that's equipping teams to solve impossible problems. A special thank you to Rea Carey for sharing your wisdom with us, and thank you for introducing us to a board savant. I've include Karl Matthiasson's seminal work in the show notes. If you'd like to learn more about Rea, just Google her. I think we could consider her a celebrity. And if you'd like to learn more about Flying Whale Strategies, please visit our website at flyingwhalestrategies.com. Thanks for listening.