Watch Out for Boards Asleep at the Wheel

Golden opportunities are missed when a board’s eyes are wide shut.

 

by Dan Busby and John Pearson

 

The drone of routine board meetings
often creates un-memorable results.

 

It was a Busby family vacation trip to Texas. It was a very hot summer day. The road was long and straight. Our two children were asleep in the back seat. My wife was asleep in the front. The car was on cruise control. And I was tired.

There are the times when your eyelids get heavy and you fight off drowsiness. This was not one of those times. This was full-blown, eyes entirely shut, asleep.

I didn’t feel a thing when the car edged off of the interstate and into the wide ditch. I woke up to the swishing of tall grass hitting the front bumper and windows as we plowed a 70-mph path through the ditch.

Now, wide awake, I gently steered the car up the side of the ditch and back onto the interstate. I breathed a prayer of thanksgiving, and we continued our trek.

Likewise, boards can become drowsy and listless by slipping into a routine of grinding through yet another meeting. Here are four examples:

  1. Improper use of restricted gifts.[1] It is not unusual for a ministry to receive gifts restricted for a certain purpose (for example, child sponsorship, clean water projects, and so on) and then borrow the funds for operational purposes. Worse yet is when a ministry expends restricted gifts for a purpose inconsistent with the giver’s restriction, with no plans to replace the money into the restricted account. Asleep at the wheel.
  2. Disappearing reserves. Many a ministry has gradually moved from a financially sound position to a troubled financial situation. This transition happened while board members routinely approved the budget and the annual financial reports.[2] Just one example: The budget was balanced, but significant resources were expended on capitalized items. Asleep at the wheel.
  3. Approving related-party transactions that are inappropriate. Some transactions seem to be in the best interest of the ministry. Yet the close relationship of those involved and the significant dollar size of the trans­actions leaves observers convinced that the related-party dealings were inappropriate.[3] Asleep at the wheel.
  4. Approve unreasonable operating budgets. Every ministry should have a reasonable operating (and perhaps a capital expense) budget that is annually approved by the appropriate oversight body (e.g., board or committee). The ministry budget provides a rail or a curb for influencing financial activity. It is important that the budget process supports the ministry’s strategic plan. Unreasonable projections of revenue and expenses mean the ministry has adopted a stretch goal, which is almost impossible to attain. Asleep at the wheel.
  5. Leadership failure. Sometimes a board will overlook or even miss the continuing chaos created by their CEO. When there is frequent turnover of board members, the fact that the CEO has gone off the rails is often masked. Asleep at the wheel.

Boards most often fall asleep at that wheel when they:

  • Misread the landscape. Acute discernment is necessary to sense what may be coming just around the corner. Without these keen insights into the future, a ministry may be too mired in the past to adjust to a rapidly changing climate.
  • Can’t see the forest for the trees. Having sound policies and following them is good. But some boards are so focused on policies that they fail to ask the insightful questions about the direction of the ministry. They have checked all the boxes (the trees) and missed the big picture (the forest).
  • Become mired in the weeds. The classic board that is asleep at the wheel is the one that spends too much of its time on operational matters. This not only diminishes the role of the CEO but also makes it nearly impossible for the board to focus on the big picture.

Is your board asleep at the wheel? Remember that golden opportunities for Kingdom impact are missed when a board’s eyes are wide shut.

 

BOARDROOM LESSON
_______________________________

Through commitment, dedication, and a focus on the big picture,
boards can fight off mental drowsiness.

  Board Action Steps:

  1. Measure: Review the board’s recent history. Were we alert to the most important issues?

  2. Create: Invest energy, prayer, and creativity to plan board meetings that will be engaging and fulfilling for ministry leaders and board members.

  3. Prioritize: Ensure that board agendas address key issues requiring the board’s generative thinking and the board’s heavy lifting.

 

Prayer

Lord, help our board to be fully present in each board meeting, to maximize our time, and to not be asleep at the wheel. Amen.

 

 


[1] See 10 Essentials of Giver-Restricted Gifts to Ministries, ECFA: www.ECFA.org/Books.aspx.

[2] See 9 Essentials of Ministry Cash Reserves, ECFA: www.ECFA.org/Books.aspx.

[3] See 7 Essentials of Related-Party Transactions for Ministries, ECFA: www.ECFA.org/Books.aspx.

 

From More Lessons From the Nonprofit Boardroom: Effectiveness, Excellence, Elephants!, 2019, www.ECFA.org/KnowledgeCenter.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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