Outsource The Board of Directors

It is no secret, the trend to outsource critical functions in business organizations has grown exponentially over the past few years. The mundane tasks of payroll and tax processing, IT, records storage, and more are easily outsourced with cost effective solutions on the cloud and other innovative systems. What is left to outsource? Is it time to outsource your board of directors? Having served on a variety of volunteer boards of directors over the past few decades, I can personally attest that outsourcing the board should have been done years ago.

Outsource what? You can rest easy, I’m not inferring we should hand off the role of the board to an outside firm (just yet), nor am I recommending outsourcing the board’s functions completely out of your agency. I think you see where I’m heading here, don’t you? This is about the micromanagement of boards, and when it’s time to cut the cord.

To illustrate my point, I’ll identify just a few reasons companies generally outsource: Cost, consistency, ability to leverage economies of scale, and hiring. Cost overarches all of these reasons. The bottom line is your bottom line, which is your primary reason for outsourcing. So much so, organizations sometimes forfeit security (unknowingly) for the sake of saving money. But, I digress.

Next, is consistency. Which, goes well with hiring. If we outsource a key business function, then the onus of hiring and training people to perform the task is now someone else’s problem. And, presuming the company is living up to their delivery standards, (you have service level agreements in the contract, right?), you are assured the tasks will be completed in a consistent manner, meeting minimal standards. If you’ve chosen the right outsourcing partner, they will have a large enough client base to build and leverage economies of scale and automation that you simply cannot afford to deploy.

These are interesting arguments for outsourcing, but let’s get back to the idea of outsourcing the board – from the avoidance of micromanagement point of view. Many nonprofit boards of directors are an assembly of individuals with diverse business, government, and social service backgrounds. Each board member was picked because of their commitment, reputation, and professional skills. Unfortunately, it is their professional skills that sometimes get in the way of running our agencies. Especially, when you have board term limits.

Let’s pick on the board member with strong IT backgrounds. In case you’ve not noticed, IT professionals are quite narrow-minded, and are hesitant to support a solution that does not align closely with their background, knowledge, and favored systems. They’ll waste more energy ranting about why another solution is bad, than getting their own projects deployed on time. So, if they are mulling about and making “operational” IT decisions for the agency, what will you do when the next board member (with a professional IT background) has a completely different approach? You can see this same scenario panning out in marketing, finance, and human resources. It’s the dichotomy of the iPhone and Android played out on your time and your dime.

If the board’s influence on your operation is creating a waxing and waning of consistency, frustration among your staff, and costs that seem difficult to control, it is time to draw a clear line in the sand. Our recommended strategic planning template has a section that is dedicated to clarify the roles of various stakeholders. The role of board, being one of the stakeholders, should be articulated. Are they visionaries and policy makers? In other words; is the board responsible for “changing the business”. If you rely on the board to perform routine operations; well, that’s different. But, in most cases, you do not. They approve the salary of the Executive Director and staff, so they should leave “running the business” to these individuals.

We cannot downplay the importance a board member’s professional background and knowledge are to the agency. But, we need to keep their noses out of the daily operation. A board member has a specific role of setting the strategic direction and supporting policies for the agency. Leverage their expertise for this purpose, but outsource their operational capabilities back to the staff.

 

 

About Ron Woodbury

Owner and Founder of Ron Woodbury Consulting.