Bob Harris, CAE
Imagine starting a new job with a gamut of responsibilities and there is no orientation or manual. Volunteers accept a role but may not understand their duties as trustees and a fiduciaries on behalf of the membership.
The best relationship with new directors starts with the statement: “Welcome to the board, here is the leadership manual which includes everything you’ll need to govern.”
Yet some organizations don’t have a manual for the leadership and many don’t provide board orientation. According to an ASAE/BoardSource report, fewer than 60% of all trade associations conduct a board orientation session.
The Case for Annual Orientation
Orientation is important – annual orientation is more important. Don’t be fooled by the board that says, “We had our orientation last year.”
With the transition of directors, some exit while others join the board, training is key. Add to that the external and internal influences that arise and the need for orientation is critical.
The process brings together the entire board as a team to freely exchange information and ask questions, without minutes being recorded. New directors should be welcomed and made to feel comfortable.
Another reason for annual orientation is the need to satisfy some regulatory requirements.
The IRS is expecting an annual disclosure of conflicts of interest. The FTC urges trade associations to have measures to avoid antitrust violations. State and federal governments prescribe volunteer immunity so long as the board is working within the governing documents they receive.
Orientation is not only for teaching but supporting compliance and documentation. Record in the next board meeting minutes that the issues were addressed and the governing documents made available.
An annual orientation should be a smooth process based on repetition and experience, making improvements with each delivery. The content would be similar from year to year and applicable to most associations.
Develop an outline for a thorough orientation. Allocate about 2 hours for the process, realizing that the learning curve declines after two hours of listening.
Decide who will deliver the orientation. An association executive is qualified but it is like telling a group of bosses what they must do. Another respected executive can do it. The chief elected officer might think he or she should do it but be careful unless they are a professional in exempt, nonprofit governance and management.
Other persons who can supplement orientation include the attorney, accountant, insurance agent and parliamentarian. There are professionals available to do it for a fee.
To streamline the process, a board orientation PowerPoint is available. It should be customized with the association’s mission and logo, list of committees, etc. For directors who miss the meeting send it to them as a PDF for their own review. . Click on this link for the PPT: Board Orientation PowerPoint 2018-2019 (click here).
There is a lot to cover in board orientation. Focus on these areas at a minimum and add your own ice breaker or introductions.
- Purpose of a Board
- Fiduciary Duties
- The Board and Staff Distinction
- Governing Documents
- Strategic Direction and a Plan
- Culture of Trust
- Understanding Finances
- Risk Awareness and Avoidance
One of the most misunderstood concepts is fiduciary duties. Directors have been known to say they understand it as a duty to raise funds or safeguard finances.
Directors are fiduciaries. Members have a right to believe that the directors are prepared for meetings and representing the interests of the membership.
There are three legal principles applicable to fiduciaries:
Duty of Obedience– Obedient to the association’s governing documents and applicable corporate laws.
Duty of Loyalty– Directors act in good faith on behalf of the organization. Conflicts will be disclosed.
Duty of Care– Directors must be prudent in their governance and oversight of the organization’s affairs.
In summary, an annual orientation improves functions and protects the board of directors and the association. It’s not a meeting that should be done only out of convenience. The PPT will help organizations conduct an effective training.
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