Board evaluation

Why board evaluation makes a difference

As a member of the board or management committee of a nonprofit organisation you are in a unique position to influence your organisation’s performance.

While there are obviously other factors affecting organisational performance, particularly senior management, staff and volunteers, the board is able to consider and influence all these issues.

A reflexive board has to give high priority to its own development and maintenance. Boards that reflect on their practices and processes in a meaningful way are in a better position to aid overall organisational performance — they can learn from past experience and look to their future development.

How do we measure board effectiveness?

Determining appropriate measures of effectiveness for nonprofit organisations is difficult.

Evaluating the effectiveness of a nonprofit board can be even more problematic.

Nonprofit governance is different in a number of respects from ‘for-profit’ governance. For example —

  • Nonprofit organisations are ‘mission’ driven, not ‘profit’ driven. There is no one way to measure achievement of mission.
  • Nonprofit organisations often have multiple stakeholders who are all critically important to the organisation, often with conflicting primary interests
  • Many nonprofit organisations are small in size, but subject to accountability standards drawn from regimes involving large ‘for profit’ organisations
  • Nonprofit boards / management committees are generally voluntary
  • Nonprofit boards / management committees, like their organisations, are generally under-resourced.

In addition, government funders and regulators may prescribe quality standards for nonprofit boards in receipt of government funding.

The Developing Your Board project is basing our assessment of board functioning on the Hackman and colleagues’ approach to team functioning. This is an integrated and holistic approach which has been studied in non-board settings while aligning with anecdotal and normative assessments of effective board functioning.

Key elements of the diagnostic

Our assessment is based on the Team Development Survey developed by Wageman, Hackman, and Lehman (2005). The Team Development Survey has been adapted and extended for use in nonprofit governance context, with some aspects of the model excluded due to lack of relevance to boards. The key elements are:

  • Membership: Is membership of the board clearly defined and stable, and is the board’s work interdependent?
  • Role clarity: Is the board’s role or purpose clear, challenging, significant to the organisation, and empowered?
  • Composition: Is the size of the board appropriate? Is membership of the board appropriately diverse, and do members collectively have sufficient skills and experience?
  • Feedback: Does the board receive useful feedback on their performance?
  • Expectations: Does the board have clear and shared expectations of behaviour?
  • Support mechanisms: Does the board have access to required information, sufficient resources, and advice and development opportunities relevant to their role?
  • Peer support: Do board members support and encourage each other instrumentally as well as interpersonally?
  • Processes: Do board members put in the required effort? Does the board examine their governance processes? Do members share their experience and expertise?
  • Relationships: Are the interactions between board members and between the board and management effective and rewarding?
  • Personal development: Are board members provided with growth opportunities? Are members motivated and satisfied with their role on the board?

Other measures:

  • Identity: Do board members personally identify with the board?
  • Psychological safety: Is there a climate of open debate and risk taking?
  • Board roles: How effective is the board with: strategy, risk and compliance, governance, oversight and management of the chief executive, and access to resources? How importanat is each of these roles?
  • Board control: Does the board give priority to strategic or financial concerns?

Read more at: Ruth Wageman, J. Richard Hackman, Erin Lehman (2005) ‘Team Diagnostic Survey: Development of an Instrument’, The Journal of Applied Behavioral Science, Vol. 41 No. 4, 373-398

DYB is getting a facelift! We are currently updating the Develop Your Board system, and so are not conducting any surveys at this stage. If you are interested in taking part in this survey when it is relaunched in 2021, please email us atacpns@qut.edu.au to register your interest to take part in 2021.