Blog: Boards of Directors

There are numerous myths that seem to persist about Boards of Directors.  Here’s a list of 10 of them.

Myth –The phrase “corporate Boards” conventionally refers to statutory, for-profit Boards.  However, statutory nonprofit Boards are Boards of a corporation, too, so they’re both “corporate Boards.”

Myth — A Board of Directors can delegate its fiduciary accountability to another body, for example, to a subcommittee.  No, courts have held that the entire Board is always responsible for its fiduciary duties, not a subcommittee.

Myth — The Board Chair is the boss of the Board.  No, typically, if a quorum of the Board members wants the Chair gone, then he/she is gone.

Myth — Working Boards are immature Boards.  No, many organizations prefer a more hands-on Board.  That’s fine, as long as they’re attending to their fiduciary roles, as well.

Myth — To get more engaged Board members, make their experience more pleasurable, e.g., have less Board meetings and bring cookies.  No, it’s more effective to continue to expect and demand that members engage.

Myth — All Boards should have term limits.   No, in small communities, you’d have to clone people if you have term limits on every Board.

Myth — The Strategic Planning Committee should do all of the planning, too.  No, the Committee should be in charge of ensuring a high-quality planning process, but all Board members should be involved in the planning — or in approving the overall Strategy.

Myth — Board members are officially Board members once their names are on the Board minutes or a roster.  No, courts discern a person to be a Board member if there’s proof that he/she has been acting like a Board member, e.g., attending meetings and taking part in votes in meetings.

Myth — For-profits Boards and nonprofit Boards are very different.  No, most of the nature of their Board operations is the same, other than for-profits attending to shareholders and director compensation (and any rules and regulations for listed/public companies).  Nonprofits Boards uniquely attend to volunteers and perhaps fundraising.

Myth — Strategic planning always follows the same process.  No, the process should be highly customized to the nature of the organization and to the purpose of the planning.

Also see:

• All About Boards of Directors

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Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my blogs: Boards, Consulting and OD, and Strategic Planning.