There is a lot of talk about how ‘staff do this’ and ‘trustees do that’ when it comes to roles in non-profits. However, that is only one of the variables in non-profit boards. Another is size – and this piece looks at how non-profit boards change as organisations grow.
A caveat: when I use the term ‘trustee,’ I mean any non-profit board member. I don’t think many of the trends I am outlining here apply only to charities.
From policies to power: how non-profit boards change as organisations grow
This is a piece to stimulate thinking. I don’t think I know all the differences of how non-profit boards change as organisations grow, nor do I have data to prove all my points. Indeed, the new Charity Commission research with PBE may have evidence to show that I am wrong!
The purpose of this piece is not to ‘prove’ anything but to develop a number of theories to help illuminate the work of non-profit boards.
Investment in recruitment, open processes, and term lengths
Theory 1: In large organisations, trustee recruitment is more likely to be open and transparent. In smaller organisations, it’s more likely to be ad hoc.
Best practice is for non-profit board members to be openly recruited for a defined term of office. The largest organisations are almost certainly doing that kind of recruitment process. Most large organisations have a high degree of success with this approach.
As organisations get smaller (and less well-known, and with less money for agencies), the task of recruiting trustees gets harder. So, smaller boards sometimes don’t bother to try, and board members stay longer.
Theory 2: In larger organisations, trustee terms are clearly defined. In smaller organisations, trustees can stay for decades or for unspecified lengths of time.
I was once on the board of a tiny charity with somebody who had been a trustee for 59 years. He only stepped down when I said it was him or me (he was 88 at the time). In general, most governance experts would say it is better if trustees don’t serve for more than 10 years.
In the smallest organisations, the challenge of trustee recruitment is compounded by the fact that trustees are not ‘wise overseers’ alone, but often ‘active volunteers’: ask the trustees of any scout group or PTA.
My guess is that the smaller the organisation, the longer the average trustee stays (and probably the average chair too).
Sometimes this is because the smaller organisation tried to define terms and found it didn’t work. Alternatively, perhaps they haven’t really tried, or it’s just not in the culture of the organisation.
Theory 3: In large organisations, there are investments of time and money in recruitment. In smaller organisations, it’s potluck.
Everybody I have ever asked said that hiring a recruitment agency to run the search for new trustees worked well, and they got a great choice of candidates. However, hiring an agency to recruit trustees is an expensive business. Although most agencies don’t charge as much for board members as they do for paid roles, it is still a bill of thousands.
Recruiting trustees is also a time-intensive process. The time taken to advertise, sift through applications, interview, and then make decisions is an important part of the equation. The bigger the organisation, the more they have staff to do sifting or money to hire an agency (or both). Tiny charities? Not so much.
Roles, time spent, and power
Theory 4: In small organisations, board members do more doing. In large organisations, trustees do more overseeing, direction and strategy.
In small non-profits without staff, the trustees (or whatever the board members are called in your non-profit) do everything. They are both the board and executive volunteers.
A key way in which non-profit boards change as organisations grow is that trustee ‘doing’ tends to decrease, and their role as overseer, scrutineer and direction setting increases. In the largest organisations, non-profit board members are purely present for oversight. As Carrie Stokes wrote in a guest blog, an effective board is productive rather than performative.
Theory 5: In small organisations, trustees invest more time. In large organisations, trustees invest less time.
I saw a chair role advertised at a £40 million charity recently. The description stated that the role only takes a day a month. Seriously. How impactful can a chair be if it takes that little time?
This is part of a trend that I see big charities exemplifying: being a board member doesn’t take much time. It contrasts with commercial boards and small organisations, where being on the board takes a considerable amount of time.
In smaller non-profit organisations, this is because board members are also the doers, as I discussed in theory 4.
Theory 6: In large organisations, trustees are relatively powerless. In small organisations, trustees are powerful and central.
In smaller organisations, the board is really important, really powerful, and drives the strategy. Nowhere is this truer than for those organisations that have no staff.
At the other end of the scale, in the largest charities, the board can be a form of organisational eye-candy. There to convince the rest of the world that they have a fantastic board.
But being a board member of larger non-profit can be a powerless role. The chair and CEO stitch things up. The staff pin the strategy down to within an inch of its life, while board members make wise comments that are simply ignored if they don’t fit the narrative.
In small non-profits, board members have an influence. As charity size increases, trustees have to work harder and harder to do so.
Profile and policies
Theory 7: In large organisations, staff have little idea who the board is and what they do. In small organisations, trustees are well-known.
In small non-profits, everybody knows who the board is, personally and individually. As size increases, it’s easier and easier for board members to get distant from staff. This is especially true for all but the most senior staff, or those who attend board meetings.
Trustees of larger organisations often:
- Meet off-site
- Don’t have any reason or opportunity to meet ‘ordinary’ staff
- Have their decisions filtered down through CEO missives and board minutes
- Seem irrelevant, mysterious, and puzzling to the average staff member
Theory 8: In large organisations, policies are done and dusted to perfection. In small organisations, the focus is on surviving and doing.
Policies can be a pain in the arse. They take time to develop and perfect. There are so many policies that can be needed. The Association of Chairs is pretty small – and we have over twenty policies.
It’s why the larger organisations tend to have a smooth, well-running bureaucracy and a full suite of policies. When times are tight – and two FTE staff and ten board members are run ragged just keeping the show on the road – an up-to-date policy portfolio goes out the window. Smaller charities are often more entrepreneurial and more focused on doing.
A lack of clear policy and procedure is a key reason why non-profit boards underperform.
How non-profit boards can improve, whatever their size
How does an organisation use these theories to make a better board? I think it’s pretty simple: small organisations need to take the best of larger boards, and larger organisations need to take the best of smaller organisations. All without losing their built-in advantages of size.
So large boards need to:
- Make sure the board has a real and decisive role in how the organisation is run – not just rubber-stamping what staff tell them.
- Work hard to show staff, volunteers, and stakeholders who the board is, and their importance in running the organisation (meaning board members need to be visible and involved across the organisation).
- Let trustees be initiative-taking, not just reactive: encourage trustees to co-create strategy and suggest new policies, initiatives, and activities.
And small boards need to:
- Make sure that trustees are recruited openly and transparently: advertise vacancies as widely as possible, with a defined period on the board.
- Invest time in looking at priorities and direction, don’t just leave it to staff (and certainly don’t neglect doing it at all).
- Put enough time into policies and procedures to make sure that processes are done well, and the organisation is protected when things go wrong.
There are doubtless many exceptions to these observations, but whether that proves the rule is another matter! Who knows if these generalisations are all right, half right, or nonsense? If they made you think, I’m happy.
Interestingly, since we launched our new board membership, we’ve had both the largest and the tiniest of non-profits join to develop their skills. Perhaps we are attracting the organisations most committed to good governance, no matter their size.
I’d love anybody’s thoughts. Message me at [email protected].
