Chapter 3: The Board’s Role in Planning
It is commonly accepted “best practice” that a major role for boards ought to be thinking about the “big picture” of how the organization is doing and where it ought to be heading in the future. It is usually recommended that this big picture thinking be captured in a “Strategic Plan” which can be used as a guide by all in the organization in making specific policy decisions. A high percentage of agreement with the following statements would indicate that the board might be having problems with its role in the planning function:
- The board has not spent enough time establishing a clear mission and vision for the organization.
- The board never seems to have time to explore external challenges and opportunities that the organization might face.
- The board does not do a very good job of learning about the concerns of external stakeholders who can influence the organization.
- The board does not do a very good job of learning about the concerns of the communities that the organization serves.
- The board rarely holds “creative thinking” sessions aimed at trying to find new ways the organization could develop.
- The board does little to learn about innovations tried by others that might help the organization.
- The board is not provided with a clear enough picture of the organization’s internal strengths and limitations in dealing with its external environment.
- The board has not developed a clear, well-researched, strategic plan that sets out broad goals and establishes priorities for the organization.
- Plans exist on paper but they don’t get implemented at the operational level, i.e. other concerns drive what actually gets done.
The main reasons that boards have difficulties with fulfilling their planning function effectively are:
- The organization faces an external environment that is too turbulent or complex to understand hence the board feels it is not possible to make plans for the future. (Note, however, that it may be possible to develop useful scenarios based on several different hypothesized futures.)
- Lack of clarity about who should play what role in the planning process. Boards are often accused of “rubber-stamping” when they think their job is simply to approve the plans brought to them by management (Chait et al., 2005).
- Lack of understanding of the planning process. This can occur because the board does not contain enough members who have experience in strategic planning, or who have not been provided with the opportunity to learn about it.
- Lack of time. This is usually due to meeting agendas that are too full of “routine” matters or short-term “firefighting” issues that do not allow the board to step back and look at the big picture.
- Structural problems. The board has not created a committee whose function it is to engage in the in-depth information gathering and analysis that is necessary for effective strategic planning.
To treat planning problems, consider the following points:
- Decide on the role in the planning process that is best for the board given the organization’s unique characteristics (its age, size, presence of experienced senior managers, number of members with strategic planning experience, etc.). Choose between one of these three basic roles:
- Doing it all themselves, i.e. the board obtains all needed information and decides on recommended directions;
- Using a board committee with responsibilities for planning to work along with members of the management team in obtaining the needed information and creating the recommended directions;
- Having the needed information and recommendations developed by the management team (with or without the help of consultants) and presented in draft form for the board to discuss and decide upon.
- Ensure that there is sufficient time, money, and expertise for those responsible for preparing the initial draft of the strategic plan to carry out that work.
- Provide education in strategic planning to all board members who lack sufficient experience (see below for a brief outline of what is involved in strategic planning).
Always involve the organization’s CEO and other members of the management team in providing needed information on the state of the organization’s external environment and internal capacity. But, also attempt to find reliable information from independent sources on these same matters. For example, many sub-sectors within the nonprofit world have evolved associations and professional bodies that monitor and report on opportunities and potential threats in the environment. There are also usually a number of experienced consultants in each industry of whom boards should be aware.
The next section provides an overview of strategic leadership questions within the basic elements of a strategic plan, from Murray (2014).
Overview of Key Questions Addressed in a Strategic Plan
What is the purpose of the organization? Why does it exist? Who does it serve?
What values should the organization uphold in the process of doing its work? For example:
- What is the underlying philosophy behind its approach to the way it seeks to achieve its mission?
- What beliefs and attitudes should be shared regarding the way the organization wants to work with the public, its clients, volunteers, staff and other stakeholders?
Many strategic plans contain a statement describing a vision for the organization’s future. A vision statement answers such questions as:
- What should the organization look like in 5 years?
- What will it be known for?
- What will it be doing that is different from what it does now?
- What will be its reputation among other organizations in the same field?
(Note: Many find it is better if this section is tackled after steps 4 and 5 below.)
4. The environmental context of the organization’s operations
This is a very important section that outlines the challenges and opportunities that shape the reality within which the board must work. It addresses such questions as:
- What changes are likely to occur in the next 2-3 years in the following aspects of the external world and what implications will they have on the organization’s operations:
- The economy
- The political environment
- Societal values and beliefs
- Who are the critical stakeholders who influence the ability of the organization to succeed? Examples of stakeholders include those the organization seeks to serve, funders (and potential funders) of all types, regulators, potential allies and collaborators, key “competitors” for funds, or clients/audience.
For each of the key stakeholders answer these questions:
- What do they want from the organization, and how are these wants likely to change in the next 2-3 years? How much influence do they have over the organization’s ability to carry out its mission?
- To what extent do their expectations of the organization conflict with one another?
- What are the organizations that are similar in size, mission, types of programs, etc. and what are they doing that the organization might learn from?
5. The internal capacity of the organization
What are the present internal strengths and weaknesses of the organization in terms of resources, people, administrative systems and leadership capabilities? In other words, what is the organization’s capacity for influencing, or successfully adapting to, the external environment that it will likely be facing in the next few years?
6. Strategic goals and priorities
There is usually no way that any organization is able to find the time, money and people to do everything that it would like to do in an ideal world. So what should be the key strategic goals for the organization over the next two years in these major components of your operations?
- Should there be any changes in the kind of people the organization serves?
- What changes are needed in the quantity and quality of the programs or services provided to those people?
- How many and what kind of additional programs (beyond those currently in place) are needed to support the mission?
- What is the potential for increasing financial support from all sources to support programs priorities?
- What should be the organization’s resource development goals and which of them are most feasible to implement?
(c) Capacity building
- What changes are needed in leadership development, staffing, volunteering, information technology and other management systems to support program and resource development priorities? Which of these changes are needed most?
Among the goals identified, which have the highest priority in terms of importance and urgency?
Strategic plans are often ineffective because the goals and priorities they identify do not get translated into implementable operational plans for which individuals take responsibility. Are there connections between the strategic priorities and more detailed business plans and budgets? Are these connections obvious and strong?
As well, ineffectiveness can result when results are not tracked or when there are no widely accepted systems in place for doing this. This can result in an outdated or obsolete plan. To avoid this, the organization’s plan must contain agreed upon procedures for the assessment of progress and the plan must be reviewed and updated annually in the light of this assessment.
For additional guidelines on strategic planning and the board’s role and capacity to engage in it, see the resources in Table 2.
Board’s Role in Strategic Planning
How to do Strategic Planning
National Council of Nonprofits
Evaluating Strategic Planning Outcomes