Effective Board Processes and

Procedures

Brainstorm Management Consultants

Mr. Chris Kalecha
 Key Board Success Factors
•Current state: focus on governance inputs
– Best practices
– Guidelines
– Regulation compliance
– Bylaws
•Looking for greater governance rigour
– substantive proof of governance
effectiveness
– focus on governance outcomes

2
 Key Board Success Factors
• Structure
– how the Board is organized

• Process
– how the Board does its collective work

• Relationships
– dynamics between Directors and Staff

3
 Key Board Success Factors
• Shared mission
• Recruit right board members
• Roles and accountability clarity
• Board independence
• Board / Management relationship
• Board and Committee leadership

4
 Key Board Success Factors
• Boardroom behaviours
– candour, trust and confidence,
director motivation
• Effective orientation, ongoing
education
• Informed decision-making
• Measuring outcomes vs. inputs

5
 Common Board Challenges

• Sharing power/control with Staff

• Board members not on the “same page”
• Input rather than outcome focused
• Clarity of roles and decision-making authority
• Measuring performance

6
 Common Board Challenges

• Board informational needs/expectations

• Leadership succession
• Orienting new directors
• Director preparation and engagement
• Group or team dynamics / boardroom
culture

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 Governance Framework
OWNERS
Ownership is about right of
A possession
C
D C
E O BOARD OF
Board of Directors is about
L
E
U DIRECTORS strategic oversight
N
G T
A A Staff is about strategy
T
I
B
STAFF execution & accountability
I
O L for results
N I
T
Operations the daily tasks
Y EMPLOYEES that move the organization
towards fulfilling its strategy
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 The Tools of Governance
• Articles of Incorporation
- established in ____
- Not for Profit corporation
- exempt under Companies Act….. And
other Sessional Papers
• Bylaws
- membership classes
- governance duties
- specifics

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 The Tools of Governance
• Policies
– Wisdom of the board, interprets bylaws and
articles
– Best course of action for now and the future

• Strategic Plan
– Roadmap for 3 to 5 years
– Guide for officers, board, committees and staff

• Annual Budget
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 Board Responsibilities
• Establish strategic plan and annual
goals and objectives
• Determine association policy
• Allocate resources through the budget
• Monitor progress
• Promote the organization
• Oversee the executive director, and CPA

11
Board Operating Procedures
Board Composition and Membership
1. Board Composition
2. Board Chair and the Vice Chair
3. Board Members
4. Alternate Members
5. Constituency Focal Points
6. Participants of Board Meetings
7. Selection Processes of Board Constituency Roles
8. Disputed Board Seats
9. Vacancies on the Board
 Board Operating Procedures Cont’d

Board Meetings
10. Regular Board Meetings
11. Emergency Board Meetings and Urgent Board
Decisions
Board Operating Procedures Cont’d
Conduct of Board Meetings
12. Quorum of the Board
13. General Conduct at Board Meetings
14. Attendance at Board Meetings
15. Agenda of Board Meetings and Background
Documentation
16. Rapporteur
17. Advanced Preparation of Decisions for Board Meetings
18. Motions of the Board
19. New Motions or Decision Points
20. Decision-making and voting procedures of the Board
21. Languages
22. Closed Sessions of the Board
23. Transparency
Board Operating Procedures Cont’d
Inter-sessional Deliberations of the Board
24. Communications
25. Electronic Decision-making of the Board
26. No Objections Process for Board decisions

Roles and Other Officers

27. Other Officers
28. Executive Director
29. Secretariat
Board Operating Procedures Cont’d
Nomination and Selection Process for Board Chair and Vice-
Chair
30. Nomination Process and Eligibility to Stand for Board Chair or Vice-
Chair
31. Commencement of Terms and Vacancies
32. Chair and Vice-Chair Transition
33. [Intentionally Omitted.]

Procedures for Appointment and Assessment of the Executive

Director and Inspector General
34. Appointment of the Executive Director
35. Appointment of the Inspector General
36. Nomination, Recruitment and Appointment Process of the Executive
Director and Inspector General
37. Performance of the Executive Director and Inspector General Assessment
Board Operating Procedures Cont’d
Ethics and Integrity
38. The Ethics framework and policy on ethics and
conflict of interest

Miscellaneous Board Matters

39. Delegation of Authority
40. Certain Expense Reimbursements
 Committee Operating Procedures
General
41. Establishment of Committees

Committee Membership
42. Committee Leadership
43. Selection, Balance and Continuity of Committee
Members
44. Independent Committee Members
45. Committee Observers
46. Committee Accountability
 Committee Operating Procedures
Committee Work Methods
47. Committee Processes
48. Quorum
49. Committee decision making
50. Closed sessions of the Committees
51. Use of Independent External Experts by Committees
52. Inter-sessional Deliberations of the Committees
53. Role of the Secretariat and Committees
54. Certain Expense Reimbursements
55. Ethics and Integrity Matters
Board Operating Processes
 ce

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Dynamic Organization

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Mission + Goals = Strategic Direction
 Expectations of Board Members

• Attend all board meetings

• Start and end meetings on time
• Study and understand the mission statement,
bylaws, and strategic plan
• Prepare for meetings by reviewing the agenda
and supporting documents
• Stick to established agendas during board
meetings
• Treat information and discussions as confidential
• Be respectful of people and ideas

22
 Expectations of Board Members

• Promote our organization to others (though you

cannot speak for organization without authority)
• Recruit future leaders to help govern the
organization
• Stay current on issues and trends impacting the
organization and the membership
• Volunteer for committees
• Readily communicate with staff for needed
information and assistance

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 Legal Considerations

• Duty of Care
– Good business judgment at all times
– Due diligence in decision making
• Duty of Loyalty
– Act in the best interest of the organization and
membership
– Avoid conflicts of interest
• Duty of Obedience
– Faithful to the mission and goals
– Follow the governing documents
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 Risk Management
• There is some risk associated with board
service
• Insurance coverages; types.
• Bylaws may included indemnification*
• Written policies exist to guide board and
staff
• Antitrust avoidance issues
*
• Annual financial audit
Indemnification - an agreement between two parties not to hold one of them liable for future legal action or fines.

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 Risk Management - Insurance
• Organization maintains the following
insurance policies:
–

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Risk Management – Antitrust
• Antitrust Avoidance
– Antitrust statement on file and annual
acknowledgements from each board member
– Every staff, board and committee member should
be aware of the policy and take immediate action
in any setting where a violation is occurring.
Most common threat is discussions of price-
setting among competitors that could be
interpreted as an effort to restrict trade
– Staff monitors on-line discussions and meetings
for potential violations
– Up to $10 million fine + damages

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 Risk Management – Who Speaks?
• Apparent Authority – Care should be
taken that committee chairs or other
volunteers not usurp the authority of the
chief elected officer or take on authority
not specifically delegated
• “I can’t speak for the board but I can offer
my personal opinion.”

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 Risk Management – IRS Issues
• IRS Issues
– Increasing scrutiny of boards and staff
– Unrelated Business Income Tax (UBIT)
– 990s is public information
– Policy considerations
• Whistle Blower
• Audit
• Conflicts
• Record Retention
• Compensation

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 Recruiting Leaders
• A responsibility of board members is to
identify future leaders
• Don’t forget to ask prospective leaders to
join our efforts.
• The leadership development committee
(nominating) plays a key role, but so does
every board member
• Committees may be a source of future
leaders
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 Executive Officers
• The officers have special duties described
in the bylaws
• The officers make up the Executive
Committee
• The Executive Committee does not usurp
the authority of the board but may meet
in between meetings of the board as
needed.

31
 Role of the President *

• Presides over all meetings of the board

or membership
• Interfaces with the Executive Director
and senior staff
• Appoints committees in accordance with
bylaws and policy
• Orchestrates and leads board meetings
* Sometimes called Chair of the Board

32
 Role of the Vice President
• Serves in the absence of the President
• Performs such duties as identified in the
bylaws or assigned by the President
• Automatically succeeds to the Presidency
• May monitor progress of the Strategic Plan

33
 Role of the Secretary
• Oversees the custody of all corporate
records, except financial records
• Monitors the accuracy and timely
distribution of meeting minutes
• Performs such duties as identified in the
bylaws or assigned by the President
• Chairs Bylaws Committee

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 Role of the Treasurer
• Oversees all funds, financial records and
resources
• Oversees preparation of annual budget;
and approval by the board
• Reports on the financial status at board
meetings
• Oversees tax filings
• Performs such duties as identified in the
bylaws or assigned by the President
35
 The Executive Committee
• May meet to conduct business between
board meetings
• Exercises powers of the board between
board meetings, with some exceptions
• Actions are reported to the board at next
meeting
• Keeps record of action and
recommendations in writing

36
 Committees
• Opportunities to engage members
• They identify potential leaders
• Committees help the board get work done
• They serve as a way to serve the interests of
subgroups of members
• Committees can produce work products and
member benefits
• Committees must be aware of risk avoidance;
keep minutes.
• Aligned with strategic goals and strategies
37
 Committees
• Standing – Identified in the bylaws
–
–
–
–
–

• Task Forces – Appointed for short term assignments

–
–
–
–

38
 Board Meetings
• Usually _____ meetings per year
• All directors are requested/expected to
attend
• Read to lead; directors prepare for
meetings in advance
• Purpose is to conduct board business, not
to perform committee or staff level work
• Input to the meeting agenda is welcomes
in advance
39
 Board Meetings
• The Agenda
– Prepared with the input of President and staff,
with consideration of current issues, member
needs and pending business
– If you have items you would like to see added
to the agenda, provide to President or
Executive Director at least one month in
advance
– Agendas mailed two weeks before meeting

40
 Board Meetings
• Minutes
– Minutes are a legal record of the meetings
and must be approved at the subsequent
meeting
– They are not a record of conversations, but
rather of formal actions taken
– Audio recordings should not be retained

41
 Board Meetings
• Rules of Order
– Procedural rules are used to maintain order
– All persons must be recognized by the chair
before speaking
– Time limits may be set on certain topics
– Know the basic rules of order to be sure
motions and procedures are understood

42
 Financial Responsibilities
• Board reviews and accepts financial
reports
• Board approves budget
• Board reviews audit report and year-end
financial statements prepared by outside
auditor
• Board views Form 990 IRS submission
annually

43
 The Strategic Plan
• Mission, vision and values position and distinguish
the organization
• Goals (usually 3 to 7) are core competencies of
organization
• Strategies should be fresh approaches to advance
the goals
• Tactics and action steps are the realm of committees
and staff
• Plan is realistic, based on capacity
• Spans a period of 3 to 5 years

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 Final Thoughts
• The board experience should be a positive one
• The board is the caretaker of the organization
• The board speaks as a whole, no board member
should have more input or authority than others
• Use business sense; be respectful at all times
• Realize you represent the organization
• Always ask questions as they arise (due
diligence)
• Thank you for serving on the board!

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