This article introduces my 2004 book/CD ROM - Managing Governance in Nonprofit Organisations in Australia.
The Jean Roberts Governance Framework presents 29 Building Blocks and 44 Units to ensure an effective, efficient and humane organisation. The CD provides easy and fast links between Building Blocks and Units to facilitate discussion, Board development, training programs, informal study – or just interesting reading.
***Email firstname.lastname@example.org for your free copy of this book and CD.
In sequence, this article introduces:
- Board performance
- Why should a Board be concerned about quality in their own performance?
- Tribute to the late Philip B Crosby – author of Quality is Free - the art of making quality certain, (Published by McGraw Hill, 1979).
- Quality Maturity
- Total Quality Management (TQM) is the recommended basis for Quality Maturity in Board Performance
- How do we apply TQM to the governance role and function of the Board?
- There are 5 levels of Quality Maturity in Board Performance – with a summary of the quality attributes in each level
- Checklist for a Board to improve the level of Quality Maturity in Board Performance:
- Action-research base for the 5-Levels of Quality Maturity in Nonprofit Board Performance
‘Performance’ is the manner or quality of functioning’, the ‘mode of conduct or behaviour’.
Within any nonprofit organisation, it is vital that each group of people working as a team is able to perform to the best of its ability. This means achieving the purpose of the team, and contributing to the purpose for which the organisation exists. The performance of a team improves as the confidence and competence of team members improve.
Board performance is a team performance. There is an individual level of responsibility for each Board member to know and understand in order for each to be committed to the philosophy and purpose of the organisation – and to consistently demonstrate loyalty to the organisation and all involved. And there is a collective level of responsibility required from the Board to work as a cohesive group who understand and accept the role they have agreed to undertake, ie governance of the organisation.
The Board-as-a-whole should perform in such a way as to ensure wise governance, sound management and operational effectiveness in achieving the purpose of the organisation.
Why should a Board be concerned about quality in their own performance?
Board members may be elected, selected or appointed – and are unpaid, in that their services and time are voluntarily contributed to their organisation. The Board is accountable and responsible for the endorsement and monitoring of the organisation’s strategic, policy and financial framework in order to achieve the purpose for which the organisation has been legally incorporated or registered, with nonprofit status.
The ideal working relationship between a Board and CEO is one of mutual respect, open communication and shared commitment to achieving the purpose of the organisation, and the Board-endorsed strategic, financial and operational targets.
Board members need to know the right questions to ask of their CEO in order to receive the information and advice they need to assist or challenge their performance. CEOs similarly need to know the right questions to ask of their Board in order to receive the direction and authority they need to effectively and efficiently carry out the management function in regard to the day-to-day affairs and activities of the organisation.
This article offers a proven and practical tool to guide a Board in the process of increasing the confidence and competence of individual Board members, and to increase the quality of performance of the Board as a whole.
The Board is legally required to govern the affairs and activities of the legal entity on behalf, and in the interest, of the association, company or co-operative members. (The CEO is included in all references to the Board in this article in the role of Executive Officer to the Board)
Tribute to the late Philip Crosby
During the late 1990s, I contacted Philip Crosby in USA after reading his Quality is free – the art of making quality certain, (Philip B Crosby: Publisher, McGraw Hill, 1979). With my earlier experience as a partner in a the family precision engineering company, I understood and appreciated his Quality Maturity Model, featuring five levels – Level 1 representing ‘uncertainty’, and level 5 representing ‘certainty’. I easily recognised the application of this model to nonprofit organisations, and approached Crosby for permission to adapt his work: he readily agreed, not long before his death. The objective of this adaptation is to enable a Board to identify the current level of Quality Maturity – and commence a planned progression to or toward Level 5.
As the confidence and competence of individual Board members increase, the performance of the Board as a team improves. This improvement is referred to as the ‘quality maturity’ of the Board.
- ‘Quality’ is the totality of the attributes of a service or product which meets the requirements of the user of the service or owner of the product: the degree or standard of excellence, especially a high standard.
- ‘Quality Maturity in Board Performance’ is the degree or standard of excellence the Board achieves and maintains as it develops confidence and competence in undertaking the governance role, and effectively fulfilling the governance function.
Total quality management (TQM) is the recommended basis for Quality Maturity in Board Performance
TQM is defined as the extent to which a Board consistently meets or exceeds the expectations and requirements of the governance role and function:
- the extent to which the Board is able to make wise decisions, ie quality of research
- the extent to which the design of the Board’s structure, process and values enables the Board to consistently meet or exceed the expectations and requirement of the Board, ie quality of design
- the extent to which the Board functions and continues to function as intended, ie quality of conformance.
TQM provides a sound basis for Quality Maturity in Board Performance. The ongoing challenge then is continuous quality improvement, and again, there are 3 stages:
- to increase the Board’s knowledge and understanding of the expectations and requirements of the governance role and function,
- to improve the design, so that the mix of Board structure, process and values more closely meets or exceeds the expectations and requirements of their role and function, and
- to improve the Board’s ability to operate in a manner and to an extent that consistently conforms more closely to the design.
How do we apply TQM to the governance role and function of the Board?
If there is a positive attitude to quality and quality improvement at the governance and management levels of the organisation, there will be an active, positive and healthy attitude to quality and quality improvement in Board performance.
Positive attitudes manifest as behaviour, and this will be displayed throughout the organisation in the manner and extent to which:
- problems or risks are identified and anticipated – and therefore either (1) avoided or (2) managed if and when they do occur
- cost effectiveness and cost efficiencies are in place throughout the whole organisation
- planned and resourced activity toward quality improvement is evident throughout the organisation, and
- an active commitment is evident throughout the organisation to the relevance and importance of quality
There are 5 levels of Quality Maturity in Board Performance
The quality attributes listed below within each Level enable a Board to determine their present level of quality maturity. Entry point to the 5 levels of Quality Maturity in Board Performance is Level 1
The starting point for a Board is to discuss and agree that the listed attributes in Level 1 demonstrate a sound understanding of and confidence in the governance role, responsibilities and relationships. Without confidence and competence in all Level 1 attributes, it is extremely difficult for a Board to plan and achieve improvement in the quality of its own performance. Each Level through to Level 5 indicates an increasing maturity and consistency in:
- levels of Board member confidence and competence, and
- quality of Board performance
Level 1 is the basis for Board performance, with each Board member having confidence and competence in the role, responsibilities and relationships of the Board as the governing body. The Level 1 quality attributes are:
- Board structure and process, including Board member recruitment and orientation
- Formal relationship and demarcation between governance, management and the point/s of service delivery - including delegation of authority, lines of accountability and service standards
- Introducing policies, procedures and practices to strengthen the function of the Board as a whole, Board office-bearers, Board members who are not office-bearers, sub-committees/Board committees, and the CEO or senior paid staff position
- Legal and organisational structure
- Legal role, duties, responsibilities and obligations of Board members, including the endorsement of the strategic and policy framework
Level 2 requires the Board as a whole to be able and willing to measure and improve their own performance. Level 2 quality attributes are:
- Current Board member skills audit
- Designing the desirable Board membership and representation
- Ensuring a high level of job satisfaction for each Board member
- Identifying performance indicators to measure and improve Board performance
- Recruitment, orientation and retention of confident and competent Board members
Level 3 ensures a sound Board performance in supporting organisational responsibilities and effectiveness, and leading the organisation in risk management and risk avoidance procedures. Level 3 quality attributes are:
- Code of conduct
- Conflict of interest
- Financial methods
- Financial monitoring
- Governance and management styles
- Grievance procedures
- Identifying risk potential and designing risk management/avoidance procedures
- Internal and external audit procedures
- Legislative requirements
- Meeting procedures
- Reporting procedures
- Separation of risk, crisis and damage
Level 4 ensures continuous quality improvement in organisational effectiveness through quality definitions, methods and procedures. Level 4 quality attributes are:
- Auditing functions
- Continuous improvement
- Critical success factors
- Quality factors
- Self assessment
Level 5 ensures that the Board is capable to initiate and maintain organisational growth in breadth and/or depth of activity and effectiveness leading the organisation through entrepreneurial activity:
- Business principles and practices
- Financial factors
- Operational factors
- Quality factors
- Regulatory requirements
- Reporting and monitoring procedures
- Risk assessment
- Separating core from non-core business activity
- Structural options
- Succession planning
The challenge for a Board at Level 5 is to ensure continuous improvement in the planning and delivery of services that are consistent with Level 5 quality attributes.
Checklist for a Board to improve their level of Quality Maturity in Board Performance
- find out what the Board must do, and why
- find out whether the Board is doing this at the best possible level of quality and performance
- decide the most important attributes for immediate or early improvement
- fix up the obvious, so that the Board performs as it should
- start work on processes to improve performance – setting measurable targets for time-specific improvements, and
- continuously improve performance
Each Board member is responsible for the quality of their own performance – and for continued improvement of the quality of their performance. If each Board member is to be responsible for the quality of their own performance, each needs to know:
- the purpose for which the organisation exists, the rules by which the Board is required to govern, and requirements and standards of the governance role and function
- the quality of the governance role and function that will ensure the best possible business practices to achieve the best possible experience for service-users, and the best possible job satisfaction for staff and Board members
- how to consistently perform as a Board to the desired level of quality
- how to measure the quality of their own – and the Board’s – performance
- how to make improvements in the quality of their own – and the organisation’s – performance
Similarly, Board members need to know and understand the value that their voluntary effort as the governing body brings to the organisation: this is basically the effectiveness, efficiency and humane-ness of their efforts and achievements in fulfilling the role, duties and obligations of their position in the organisation.
Action-research base for the 5-Levels of Quality Maturity in Nonprofit Board Performance
My action-research to assess the training and support needs of voluntarily managed organisations in Victoria (Australia) was undertaken from 1989 to 1992 – with focus on small and medium organisations providing services for people with an intellectual disability. Through 1989-1991, I worked directly with 78 voluntary committees of management and their senior paid staff in identifying and addressing the issues of immediate interest or concern to them. During this work, I designed and developed a variety of analytical tools, checklists, strategies and templates to improve decision-making and resource-allocation, and to more effectively and efficiently deal with a variety of issues at governance, management and operational levels of activity.
In 1992, I designed and wrote a 300-page training manual, with 6 modules, 38 units and 24 group activities for in-house training at governance and management levels: the first task in this work was to create a nonrofit governance framework. This manual was launched at a state-wide conference in 1992 by the Victorian Government, the major funding source for this project – and circulated by (then) Community Services Victoria throughout the disability sector in Victoria.
From 1992 to 2004, I continually worked as an independent consultant with nonprofit organisations providing a wide variety of services in Australia – extending, refining and building on the contents of the 1992 training manual.
In 2004, I published my book/CD ROM Managing Governance in Nonprofit Organisations in Australia – featuring 29 Building Blocks and 44 Units
Together, these 29 Building Blocks provide evidence that:
- people using or accessing the services provided receive a high quality of service in a consistent manner
- staff, volunteers and Board members experience a high level of job satisfaction
- Association/Company members or Cooperative shareholders are confident that the organisation is using its available resources effectively and efficiently to achieve or address the purpose for which the organization exists
- funding bodies are confident that the organisation is able to meet and maintain the terms and conditions of funding and service agreements, and quality/service standards
- communities experience a positive and practical impact and benefit from the activities of the organisation in building a strong and supportive geographic community or community of interest
Together with the 29 Building Blocks, there are 44 Units – each fitting within one or more of the Building Blocks. The Units present the basis for Quality Maturity.
This work follows the traditional ‘3-level hierarchy’ model, in which a quality factor has a number of components, and each component has a number of elements. The Building Blocks are the quality factors: the Units are the components: and the tools, strategies, checklists, templates, etc., are the elements.