Professor Richard Leblanc says not-for-profit boards as good as their guidelines

A not-for-profit organization should choose its board members with as much care as a well-run company, says the lead author of a new guide that offers advice on finding, training and evaluating directors.

“Not-for-profit organizations must be trusted by their stakeholders both in the delivery of services to beneficiaries and in their stewardship of the organization’s assets, including donations. To earn and maintain this trust, they must be well governed by an effective board of directors,” says York University Professor Richard Leblanc. “Directors should be selected based on their skills and experience to ensure that the board can effectively oversee the organization.”

The guide, “20 Questions Directors of Not-For-Profit Organizations Should Ask about Board Recruitment, Development and Assessment,” is available online from the Canadian Institute of Chartered Accountants (CICA). The CICA, through its Risk Oversight and Governance Board, commissioned Richard Leblanc, PhD and co-author Hugh Lindsay, CA to develop the guide as part of the CICA’s commitment to supporting and enriching the work of boards of directors in the voluntary sector.

Leblanc, associate professor of Law, Corporate Governance and Ethics in York’s Faculty of Liberal Arts & Professional Studies, was given unprecedented access to the boardrooms of some of North America’s most powerful companies and produced a groundbreaking study that led to significant changes in the governance guidelines for all Canadian public companies. Many not-for-profit boards are now where the boards of these publicly-traded companies were about four or five years ago, he says, in terms of board evaluations.

According to the new guide, one of the questions boards of not-for-profit organizations such as hospitals, universities or charities should be asking is: Do the board and its committees have mandates or charters? The responsibilities of boards and committees must be written down because they will help define which specific tasks are expected of a director: is he or she expected to help raise funds, for example, or chair a board committee?

The “20 Questions” guide also encourages boards to ask themselves questions such as: What skills and personal qualities should board and committee chairs have? How does the organization develop directors as effective board members (including orientation, learning opportunities and mentoring)? What should be evaluated when the effectiveness of the board and its committees is assessed? And how should under-performing directors or chairs be dealt with?”

Many not-for-profit boards don’t assess how they are doing or fail to follow through on the results of a board assessment.

“But if a few directors or the chair are not performing, or are resisting change, and no evaluations are done, it perpetuates a bad board,” says Leblanc.

Leblanc, together with CICA principal, Beth Deazeley, LLB are presenting a webinar on the guide on March 30, 2010, at 12:30-1:30 PM EST, put on by the CICA’s Directors Source program.  Everyone is welcome and there is no charge.  You can register for the webcast here in English or French.

The document is being issued by the CICA’s Risk Oversight and Governance Board. It can also be found on a special CICA site dedicated to not-for-profit organizations.