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Quick Queries

Governance doesn’t tend to be a sexy or hot topic; unless something goes wrong or there is a scandal. Then suddenly it’s not quite so dry. These events are occurring more often.  We are frequently asked to do a quick “sniff test”.  Often by that time its already pretty smelly.

The original Q  that started it all is:  Do we have a crisis of governance in NFPs?

A: Yes. I do believe we have pervasive poor governance, particularly in NFPs and QUANGOs, we are not in a full-blown crisis yet but we’re well on our way.

“Governance Quick Queries” are not official opinions or advice. 

They are meant to improve the baseline knowledge of governance.  

A: Since the New York Times DealBook focussed on corporate Living Wage policies and their importance both to the SEC and in future ESG calculations, this question has come up more than a few times.

I’ve generally offered comments that include the following:

  • Don’t focus on paying people less. Minimum wage is no longer acceptable for most companies.  Focus instead on how you can invest in technology or in people to improve efficiency and productivity. Irrespective of what the ESG ratings drive, there is a labour crunch underway and it’s just smart business to get in front of it
  • Pay doesn’t motivate people but it does de-motivate them. Be smart.  Focus on the entire employee experience.
  • Unpaid internships are not generally supported in any ESG framework. There are many government programs that help pay for students and recent grads.  Engage with them if at all possible.
  • If you have trouble hiring for your entry level roles, chances are you have a compensation competitiveness issue. At its core, good governance is about doing what makes the business successful.

This is one of those governance topics that requires specific analysis for each organization.  In this area we work with ESG people and firms that have both professional qualifications and lived experience. 

If you would like more information, feel free to email

A: It’s hard to choose only one.  

  • ESG, alignment of corporate purpose and the consideration of all stakeholders in the boards strategy and decision making are all intertwined and represent a significant shift in board thinking. 
  • The boards I’m dealing with plan to remain about 50% virtual in the future.  That’s a seismic shift.
    While there is a lot of talk about DEI, I’m not seeing evidence of the shift yet, but it may come.   
  • Cyber awareness & skills at the Board level.
  • Board succession planning.


If you would like more information, feel free to email

A: Yes, you can be. While most organizations carry Directors and Officers liability insurance, a director can still be held personally liable if they are responsible for a breach of fiduciary duty due to their recklessness or willful misconduct. Directors also owe the organization a duty of loyalty and a duty of care, and if the director breaches these it is also unlikely that D &O liability insurance will protect them.

Accepting a directorship is never something to take lightly. You do have a duty to act if you know or suspect that there is something untoward, or not quite right is taking place.     

If you would like more information, feel free to email

A: Governance is one leg on the table or platform that provides the base to hold the organization and bring it into the sun. The other three are 

The Management Team, 
The Financial Resources, and 
The Operations Support Systems

It’s important to keep the table level and stable. If any leg is too much longer or shorter than the others, it causes the organization to tilt and success to slip off, and crash. There is no one-size-fits-all when it comes to governance.

If you’re not sure how long your governance leg needs to be, ask.     

If you would like more information, feel free to email

A: The only report necessary or even advised when arising from an in-camera session includes only any motions approved during the session. Unless there are special circumstances, votes are not recorded. Just record the motion and that it was passed. Motions that were proposed but not passed are not recorded. 

Generally speaking, many organizations keep more detailed minutes than are required. This often proves regrettable in time.     

If you would like more information, feel free to email

A: No.  

As a board member, your first duty is to the organization. Some of the most egregious errors boards make happen when either the board or an individual director places the best interests of the organization behind those of another group or individual.

For example, if a board implemented a policy for the benefit of one person or group that is not in the best long-term interests of the organization, or if it hired one of its own members into the C Suite, or advocated for anyone who could reasonably be perceived as having a close tie to the board or a single director, it would be problematic.  

It’s more than okay to bring your passion to a director role as long as it isn’t directed towards benefitting or potentially benefitting yourself someone close to you. This is particularly true in the case of NFPs or Quangos.       

If you would like more information, feel free to email

A: A Quasi-Autonomous Non-Governmental Organization.  

QUANGO is really a non-country specific term for what in Canada are called Agencies, Boards & Commissions or Crown Corporations.      

If you would like more information, feel free to email

A: Consider an advisory board.  

Think about what you want the board to accomplish in five and ten-year horizons before you think about who to invite. Well-functioning boards include a mix of skills, attributes, and competencies that will deliver what the organization needs in the future.  

What is your exit strategy? Who is your target market? What is your succession plan? What does your company need that is lacking in your management team?  

It’s almost never advisable to be both CEO and Board chair. Consider who will serve the function of Lead Independent Director.  

Draft a commitment letter to discuss with potential directors before you get started.

This is a significant investment of both time and money that has sizeable potential returns. It’s worth taking the time to do it properly.      

If you would like more information, feel free to email

A: Learn who sets the NFP industry standards, benchmarks, and best practices.

Ask before you join the NFP board whether fundraising is a significant part of the role. Understand that fundraising is a profession.

Scale down or be prepared to add capacity. Operations (e.g., HR or Risk) might be just one of many responsibilities of a single person rather than a dept.

Understand the board culture. Is it a policy board or a working board? Understand where Directors’ boundaries are, and should be.

Many business best practices and experiences will be welcomed and will strengthen the organization. True-cost accounting and risk management are increasingly used in NFPs. Some, however, will not fit with the organization’s culture. 

In addition to all of the duties owed in for-profit organizations, directors in NFPs have a duty of obedience. Understand your duties and your D&O insurance at any NFP before you make the final commitment to the board.      

If you would like more information, feel free to email

A: This is probably the question We are asked the most. Before you read the rest ask yourself why you want this. 

1) Ensure you have some unique value to bring to boards.
2) Learn about boards, their purpose, and function. The experience often differs from what inexperienced board members anticipate.
3) Volunteer on smaller, not for profit boards. Do so understanding that, in many cases, they require as much if not more work than corporate boards. You have duties and obligations when you join them. Never, ever join any board just to gain experience.
4) Prepare a board resume. This is different from your employment resume.
5) Do your homework. Examine the boards and organizations even more rigorously than they evaluate you.
6) Get credentialled. A good place to start with the ICDs “Governance for Not for Profits” 3 days mini-course. Take it in another city or with different people than those with whom you normally interact.     

If you would like more information, feel free to email

A: This is one area that’s undergone significant change. This change has gone hand in hand with the move away from having a CEO also be chair of the board.

The board owns its own succession planning. The CEO can have input and suggest people. The CEO can even say that they would prefer not to work with a particular person. But at the end of the day, the Board owns the recruitment and selection of its directors. There are some exceptions such as QUANGO boards, where best practice sees the board present 3 or more acceptable candidates to their responsible minister/governor. That person, who is effectively the representative of the single shareholder, chooses from amongst this number.  

So, the short answer to the question is that in general, the CEO has input but the decision rights rest with the board.     

If you would like more information, feel free to email

A: There is no quick answer, as the reason for revisiting the decision drives the answer. Often when this arises, it isn’t because the circumstances or environment within which the decision was made have changed, but rather that one or two board members didn’t like the outcome and want to vote again and again until they do.

Ideally, each board member would understand and respect their duty of collegiality. But those without board education sometimes don’t understand their duties. If that is the case, it’s up to the chair to ensure the decision is accepted. If all else fails, wise chairs sometimes add it to the agenda of a particular meeting in the future. For example, the chair may put it on an agenda 3 years hence. This is one of the many benefits of the board establishing a 3–5-year agenda.     

If you would like more information, feel free to email

A: The chair owns the agenda and has the final say on what’s on it. Typically, the chair considers input from both the CEO and board members.

That said a good Corporate Secretary ensures that all the important recurring items are scheduled at the appropriate cadence over a three to five-year cycle. This ensures that the important items such as revisiting Legal and Audit Services and updating Business Continuity plans, are not displaced by the urgent items of the day.    

If you would like more information, feel free to email

A: Tough question. One that no doubt will inspire different answers over time.

  1. Boards are undergoing formal board commitment, compensation, and succession planning reviews.
  2. Boards are hiring more independent third-party experts to report directly to the board. The most common at the moment is in the cyber arena, but ESG is rising quickly.
  3. Boards are reviewing their committee structures and memberships and, in some cases, adding non-board members to committees to flesh them out.    

If you would like more information, feel free to email

A: Governance best practice is different than a tv courtroom.

When it comes to boards and conflicts of interest the legal standard of “innocent until proven guilty” does not apply.

In governance, a real conflict and a perceived conflict are one and the same. Often even a potential perceived conflict is also considered synonymous with a real conflict.

Sometimes that is a difficult concept for those new to governance to accept. It is, nonetheless true.

If a reasonable person could reasonably perceive that the situation in question could be a conflict of interest, then it is, in fact, a conflict of interest.   

If you would like more information, feel free to email

A: Strong boards are focussed on strategy and leadership. 

Reading and understanding last quarter’s financials is important. But wise boards spend meeting time discussing topics they can change and influence.  

This is why Consent Agendas are a best practice. A consent agenda is a group of items that are provided in detail to the board at least a week prior to a meeting for review. The board agrees to read them and request clarification etc. ahead of time and to approve them with a single motion (without discussion) at the meeting unless a board member has requested in advance that a particular item be moved from the consent agenda to the full agenda. It’s generally inappropriate to waste a board’s time debating historical facts it cannot change.

It is also always inappropriate to correct spelling or grammar during a board meeting. These items are better addressed offline.

If you would like more information, feel free to email

A: Much has been written over the past couple of decades on term limits. 

In the UK, comply or explain legislation came into effect in 2021 limiting Board Chairs to a maximum of 9 years. This trend is pervasive around the globe.

That said, is often takes up to 3 years serving on a board to reach full productivity.

As a result, a common best practice is to elect Directors for a 3-year term, with up to 2 renewals.

Sometimes we also see Directors elected to 4- or 5-year terms with the opportunity for one renewal. It really depends on what is best for the organization. 

The objective of these limits is to ensure that there is enough continuity while also keeping the board fresh and engaged. Term limits are one way to facilitate this goal. Another, complementary process is to ensure that no more than 1/3 of the board turns over in any given year. 

If you would like more information, feel free to email

A: That depends. An advisory board can be effective with as few as 3. Some foundation boards function with as many 14. To determine the number, analyze the skills, attributes and competencies needed to serve the organization’s mission

The research is clear: the ideal number is generally between 8 and 12. After that, decision making often becomes difficult and ineffective or is abdicated to a smaller group of 4-6.  

When having such discussions with clients, we often suggest they reflect on their own experience, even as a volunteer in the community. Most can point to an organization where many have volunteered but only a few do all the work. Inevitably those “doing” the work are dissatisfied. Often, the others feel excluded: Not a recipe for success.

Don’t underestimate your board size and composition as a source of dissatisfaction or of reputational risk. 

If you would like more information, feel free to email

A: “In camera” is Latin for in chambers, or in private.  

Boards should ensure that they end every meeting with an In Camera session. It doesn’t have to be long: 5-15 minutes suffices. It’s important to make this a consistent practice.

In-camera can have levels. For example, first employees, then the CEO and then non-independent directors leave the room, until finally only the independent directors are left.  

Minutes are not taken at an in-camera session, though it is common to “rise and report” decisions.

The most important function of any in camera session is to ask if there are any elephants in the room or if there is anything that any director was not comfortable asking with staff present.  

In camera sessions play a vital role in ensuring that directors can effectively discharge their duties. Conversely, their overuse ensures they don’t.

If you would like more information, feel free to email

A: It is particularly important for Not for Profits to have an expansive and inclusive approach that includes diverse perspectives. Board members may be encouraged to donate as they are able and inclined. Such donations should remain private. It is often the case that those of less means at the table forego paid hours to attend and this already requires a disproportionate sacrifice on their part. 

So, the answer to this Quick Query is a definite “No”. 

This practice was acceptable in the 1980s. While some seniors still think it is acceptable, it isn’t. It is universally frowned upon in the current age of cultural and social awareness, diversity and inclusion. Boards must be especially vigilant to avoid the tendency toward two classes of board members (privileged and paying vs disadvantaged and not paying)

If you would like more information, feel free to email

A: Sometimes, in times of crisis or uncertainty, a board member, can and should step into the CEO role temporarily or on an interim basis. In general, it is not considered best practice to hire a board member into the CEO role on a long term or permanent basis. Boards should almost never hire a CEO from among their number. It is considered especially bad governance in QUANGOs and NFPs.

There are several key drivers behind this best practice. If you would like more information, feel free to email

A: Boards require directors that have experience, diversity and specialized knowledge and they must also have other soft skills in order to effectively apply them including independent thinking.  Some feel CEOs are perceived as valued persons to have on a board and that it helps make you a better CEO and leader. 

But at its worst it is cronyism.  Directors should be on the board based on assets they bring rather than some tenuous connection to the CEO, especially in the case where CEOs serve on the board of each other’s organizations.  It is not based on merit but on trading favours.  This is a form of internal executive nepotism.  And the benefits may be far outweighed by the negative aspects. 

CEOs are highly paid and the job is more demanding than it has ever been.  This means that they can be stretched too thin and this does not serve the company that employs them.  Also, they may be just “sitting” and not “serving” on the board. A McKinsey study found that board members on high-performing companies spend about 40 days.  That is a lot of time.  Time spent on another board is time away from the company.

People appointed by their friends are potentially “yes men and yes women”.  One is more likely to agree to what your CEO friend wants because loyalty and the desire for reciprocity for those you picked to be on your board.  It also denies the board the benefit of independence and diversity of thought and the formation the formation of cliques.  In a study of 37 companies with CEOs who served on multiple boards their company had a rate of return of 8.2% compared to a return of 15% for chief executives with no only one outside directorship.

If you would like more information, feel free to email

Have a question that’s not addressed above? Send me a Quick Query and I’ll add it to the series.

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