Transcript: Behind the Boardroom Curtain: Best Practices, No-Nos, and Workplace Wisdom // John Pearson, John Pearson Associates

Flourishing Culture Leadership Podcast

“Behind the Boardroom Curtain: Best Practices, No-Nos, and Workplace Wisdom“

December 11, 2023

John Pearson

Intro: How can a board catch the vision for good governance? What are the essential elements of a healthy board that lead to extraordinary outcomes? Well, today on the Flourishing Culture Leadership Podcast, we'll focus on nonprofit board governance. Listen in and learn best practices and healthy board culture from an expert in this area.

Welcome: Welcome to the Flourishing Culture Leadership Podcast, your home for open, honest, and insightful conversations to help develop your leadership, your team, and build a flourishing workplace culture.

Al Lopus: Hello, I'm Al Lopus, the co-founder of the Best Christian Workplaces and author of the book Road to Flourishing: Eight Keys to Boost Employee Engagement and Well-Being, which is a finalist in the Christian Book Awards. I'm passionate about helping Christian leaders like you create engaged, flourishing workplaces.

So, how can a board catch the vision for good governance? What are the essential elements of a healthy board?

I'm delighted to welcome John Pearson to the Flourishing Culture Leadership Podcast today. John is a management and board-governance consultant. His expertise comes from years of experience in high-level leadership. He's written and coauthored a number of books in this area, including Lessons from the Nonprofit Boardroom.

Throughout our conversation, you'll hear John talk about the three hats of governance, a board’s stewardship of powers, the top five practices of a healthy board, the CEO/board-chair relationship and the importance of it, three no-nos and three things that derail a good board.

I think you're going to love this interview with John. But before we dive in, this episode is brought to you by the Best Christian Workplaces’s Leadership 360 and our new leadership and group coaching. We help you transform your leadership effectiveness with our stakeholder-based coaching process. Learn more by going to workplaces.org/coaching. Check it out today.

I'd also like to welcome our new listeners. Thanks for joining us.

So, let me tell you a little bit more about John Pearson. Currently, John is the president of John Pearson Associates, and he helps nonprofit organizations in vision implementation. John served as the president and CEO of several nonprofits, including the Christian Management Association, which is now Christian Leadership Alliance; Christian Camp and Conference Association; and he was the founding executive director for the Willow Creek Association. He's also served on numerous boards, including ECFA and the Christian Community Credit Union. John has also written extensively on the topic of management and board governance. Some of the books that he's authored or coauthored have included Mastering Mistake Making, Mastering the Management Buckets, and Lessons from the Nonprofit Boardroom. John has also led workshops, conferences, and coaching sessions for senior leadership teams and boards.

So now here's my conversation with John Pearson.

John, it's great to have you on the podcast. And first of all, I want to start our conversation saying thanks for playing such an integral role in the creation of the Best Christian Workplaces. I'll never forget the phone call that you made in the spring of 2002, letting me know that I'd be receiving a call from Christianity Today and that they were interested in publishing an article on the best Christian places to work and wanted a credible way. They thought, “Well, it'd be great to have an article like that, like Fortune magazine. But so how do we create a credible list?” And you invited them to give me a call because you knew that I could help them. And then, after we did the whole first Survey there in the fall of 2002, you invited us to the Christian Management Association, when you were the president there, to make the awards for the top 40 Christian places to work. And that was just a great experience back in 2003 in Colorado Springs. And we were the cover story of Christianity Today, and we handed those magazines out before they were actually mailed out. And here we are over 20 years later, and I just want to say thanks. You helped us get off to a great start.

John Pearson: Yeah. Twenty years, I mean, I could hardly believe it. Yikes.

But very few people come back and thank me for something I did. So I guess that was one of my best referrals ever. But I felt like the Lord just said, “Al, call. Have them call Al.” And wow, what God has done over time, congratulations.

Al: Yeah, well, thanks. It's been such a joy. And I just think of it was God's timing. I often say, “Well, divine providence called, and I just answered the call.”

John: There you go.

Al: And yeah. And that might have been the only time you've been referred to as “divine providence.” But, oh, dear. Yeah.

Anyway, John, well, our listeners—here, as we move ahead—our listeners are leaders in Christian nonprofits, schools, churches, and Christian-owned businesses, and some listeners may also be board members. In fact, I'm sure many are. And while most of our listeners have experienced and had experiences in interacting with their boards or even being on a board, I want to set a clear foundation at the start of our conversation. And let's talk about boards. So in your mind, what's the primary function of a board?

John: Well, we are just jumping right in, aren’t we? You know, my standard answer is I send people to boardsource.org, which is not a faith-based organization, but it’s an excellent organization. Many faith-based ministries are part of that. And they have a book called the Ten Basic Responsibilities of Nonprofit Boards. And so I usually talk about those tenets. It's ones like determining the mission; selecting, supporting, evaluating the CEO; ensuring effective planning; monitoring and strengthening programs and services—they have some really interesting insights on that one. Six more. So that's the basic thing.

But I often also talk about the three hats that board members wear, which, hopefully, eliminates confusion at the front end, especially with somebody coming on the board. One hat is governance, which you wear during the board meeting. The second hat that a lot of board members wear is the volunteer hat. But I try to encourage people to separate those two and to say to be on the board, you don't have to be a volunteer. And really, when you volunteer, you should only do it based on your giftedness, your spiritual gifts, your competencies. The third hat is the participant hat, when you as a board member need to be at events like rescue missions, have graduations for those who finish their programs. And the important thing is not to wear the volunteer hat in the board meeting, not to wear the governance hat in the volunteer, etc., etc.

So maybe one other thing, Al. My favorite definition of governance is from David Tiede, the president emeritus of Luther Seminary. And he says, “Within Christ-centered organizations, governance is the stewardship of powers to accomplish the mission in service of the church's calling.” So I kind of net it out, saying, here's kind of three things. One, hear from God, for a board member. Two, continually affirm you have the right CEO leading. Now, that can be a little challenging emotionally for CEOs and boards, but that's a fundamental responsibility. Three, own the strategy. Ram Charan has a book called Owning Up, and that's one of his big things. Does the board own the strategy?

So, that can kind of get you into those big ideas, maybe.

Al: Yeah. John, let me just ask you about that “own the strategy.” Often, it's the leadership that come up with the strategy. So what's the board really do regarding strategy? And what's the meaning “own the strategy?”

John: Yeah. Some boards work very collaboratively with the CEO and the senior team, and they create it together. Most of the board-governance gurus say it's not up to the board to create the strategy; it's up to the staff. But the board must own the strategy.

You may remember a good example. Target saw a lot of people from Canada coming in to, like, Bellingham, Washington, and buying stuff and taking it back across the border. And so Target thought, “Well, we should just start in Canada.” So they bought a whole bunch of stores that had gone bankrupt. And fast forward a couple of years later, five billion later, I think it was, they didn't make it. And so what happened to the CEO? CEO still stayed there because the board agreed with it. The board owned the strategy. And they were all surprised they couldn't pull it off.

So, many times, CEOs, senior team members run a little too far ahead of the board, and then they get in trouble. They didn't wait for the wisdom and the discernment, the spiritual discernment, of the board. So that's what it means to own the strategy.

And Ram Charan says, second only, do we have the right CEO? Second in order is do we own the strategy? Do we have the right strategy, and as a board own it? Yeah.

Al: Yeah. And as you say, for Christian organizations, to be sure you're hearing from God. I mean, as we work with Christian-led organizations, I mean, the big difference is the Christ factor.

John: Exactly. And that's what I say, when you look at those ten basic responsibilities of nonprofit boards, you won't see any of the Christ centeredness in those things. And so when I am in a workshop with a board, I list those ten, and then I list about five more spaces below that and say, “So now what are the unique things, or how does a board hear from God about the mission, about the strategy?”

Al: Yeah. Yeah. Great.

John, I know you have consulted with many nonprofit organizations and churches, and you're in a position to really survey the landscape. So what is the state of a nonprofit board or the church board these days? What do you see that encourages you? What do you see that's concerning?

John: Well, encouraging. I'm just amazed all the time at the men and women who continue to serve on the front line. I've been blessed to work with a lot of rescue missions over the years, both as a consultant and through my Association work. I mean, they are on the front lines, and there still seems to be a very robust pipeline of people who want to serve in that area, international ministries, world-relief-type organizations, not to mention university campuses. So they face huge odds, but they serve Jesus oftentimes with great excellence. So that's what I'm encouraged.

This wouldn't surprise you because I work with so many organizations: everybody thinks I ought to be their major donor. And so my mailbox, my inbox, is just filled with donor requests. And I try to look at them and to see what God is doing. And I can't help them all, of course. And I hope this doesn't prompt any more.

But what's concerning to me—and I'll just be very brief on this, and I can't tell you that I know the issues—I think the two hardest jobs in Kingdom work are being university presidents of Christian colleges/universities and being local-church pastors. I mean, those are challenging, challenging jobs. But what is concerning me, especially in the parachurch area, is I don't see enough partnering partnerships, whether you call them mergers or takeovers. I think there’s just excessive duplication of services, and I don't think that honors the Lord. And I think somebody on every board or on every staff ought to constantly be saying, “Who should we be partnering with?”

And then in the local church, I'm concerned that—when you do strategic planning, you look at your goals and objectives. And then once you've identified those, then you get down to methodology. And I'm concerned that the methodology of Sunday morning at 11 is, like, the goal. Well, that's not the goal. And so I'm not going to say the system is broken in the American church, but all the numbers tend to say that after COVID people are not coming back at the level. Pastors are discouraged and burnt out, according to all the literature. And maybe it's time for just a zero-based budget and start all over and said, on our knees, “Lord, we want to honor You. We want to reach people. Is there a different or better way?”

And let me just say that for those pastors, I want to encourage them. It's tough slogging. I mean, do I go to my church today or do I listen to some of the greatest preachers in the world online? I mean, you can't compete. So maybe there’s a differentiation that a local church needs to have going forward. But no extra charge for that pontification from an old guy.

Al: Okay, yeah.

Well, observations are accurate, there's no question. And yeah, maybe there does need to be some rebooting.

But John, also, you've been part of and authored many books. And I love your book Lessons from the Nonprofit Boardroom. And I'm involved in a church, and you also have Lessons from the Church Boardroom. But I want to talk about the nonprofit boardroom a little bit. And you share 40 insights from—I've got the book right here—40 Insights for Better Board Meetings. So based on your experience, give us the top five. What are your top five practices that really make a difference in healthy functioning of a board? And I'm taking notes and really appreciate this free consulting that you give us all.

John: Well, first, I’d say, like, hey, there are 40 lessons in that book. And then Dan Busby and I also wrote a second book called More Lessons from the Nonprofit Boardroom. And then, we did the Lessons from the Church Boardroom. So, you know, to pick five, you know, so I'll humor you, but obviously, everybody needs to read all 40.

But let me say, number one maybe would be to land on the appropriate sweet spot between what is called policy governance and then micromanagement. If I got 10 bucks every time I heard from a CEO or a senior pastor, “My board is micromanaging me. They show up on a work day and tell me what color to paint the wall,” and all these things. Now, there are others, very healthy boards, at the other end of what John Carver, in his 400-page book Boards That Make a Difference, calls policy governance. And so I usually, in working with the board, try to help them understand the continuum. And I just say extreme micromanagement is a one, and high policy governance is a 10, and I try to identify those terms enough so that a board would say, “Where are we? Are we at a five or six? Or are we at an eight or nine?” And the bigger question is, where do we want to be in the next 18 months? Do you want to be going more towards policy governance or more towards being hands on? Maybe there's been a crisis, and you're without a CEO, and the board has to step in.

So there's a sweet spot, and the Bible doesn't say where that is, but thoughtful boards figure that out. And you can do the same sweet spot with your top leader, senior pastor, lead pastor, or CEO, executive director. Are they the kind that say, “It's easier to ask forgiveness than permission”? Are they very focused on, “Let's get this done. Check with the board later”? Or are they the kind that don't do anything without checking with the board? One to 10. And so I have the board evaluate their top leader and then say, “What number is he or she at? And where do you want that person to go, right or left?” So that's one of the things you'll find in the book.

Number two would be date board prospects before proposing marriage. And many, many times—I mean, I literally have gotten a phone call, maybe because people know I'm a board-governance consultant, and they, “Oh, it'd be great to have John on our board,” and they'll say, “Is there any way you'd consider serving on our board?” I'm not a donor, I'm not a volunteer, I may not even know how to spell the name of the organization, but then the person will say, “So would you pray about this? And if you don't mind, I have a 7:00 a.m. nominating committee meeting; could I call you at 6:30 tomorrow morning?” Well, of course I'm going to say no.

So there's a whole process, a prospect pipeline of bringing people on. And don't ever propose marriage on the first date. The first time you start the conversation, I call it an 18- to 36-month process. And I like the term, if you want a healthy board, recruit healthy people. And that's the whole reference checking, etc.

Number three might be leverage God-given gifts and passions. There are lots of assessments out there. I like three that I call the three powerful S’s: spiritual gifts. Everybody, hopefully, listening has a Bible. They know how to determine and use their spiritual gifts. The social styles, the four styles of analytical, driver, amiable, expressive, to understand that in a board setting. My wife Joanne, you know, she's an analytical. An analytical on a board would say, “No decision is better than the wrong decision.” A driver, like me, on a board says, “Any decision is better than no decision. Let's just keep this thing moving.” An amiable will say, “How does this decision affect our relationships?” And an expressive on the board will say, “Will this decision be any fun? And is there a platform and a microphone, and how many minutes do I have?” You know, so.

Well, then, that's two of the three S’s. The third one is Gallup StrengthsFinder assessment, Gallup's CliftonStrengths, and you identify your top five strengths. And the reason this is so important—and I encourage people to become students of their CEO, their senior pastor, and likewise, of their board chair and board members—when you ask me to do something that resonates with my spiritual gifts, my social styles, and my strengths, it's a holy calling. I mean, I literally have a visceral sensation. Like, the Holy Spirit nudged me and said, “John, say yes to this because I've already gifted you to do this, and you'll have great joy at it.”

So maybe number four would be, we talked about Ram Charan’s book, Owning Up. I like boards to have a one-page, rolling, three-year plan. Just a summary of where are we going? Three to five initiatives, showing a column for each of the next three years. And then at the end of every year, you update it, you evaluate the year that's now past, and you add one year. So you're always looking ahead three years. That helps bring clarity and eliminates—one of the chapters in the book is about harebrained ideas, how to avoid harebrained ideas in board meetings. And all you do is you say, because everyone's got a copy of that one-page strategic plan, you know, “Hey, Joe, where does this fit on this thing?” So.

Maybe the last one would be if you need a board member, recruit a board member. If you need a volunteer, recruit a volunteer. That's lessons 13 and 14 in the book. And it kind of relates to those hats.

I was at a board meeting in Minnesota at a camp years ago, and I thought I was doing a great job of the Friday night/Saturday retreat, telling them all about good governance. Saturday morning, the break. We took a break. We came back. And I'll call him Hank. Hank's chair was empty. And I said, “Hey, should we wait for Hank to come back from the coffee break?” And they all laughed, and they said, “No, just keep going.” And I said, “What's so funny?” And they said, “John, just keep going.” So they wouldn't tell me. Ten minutes later we hear this buzz saw going in the next building, and everybody laughed again. And I said, “Okay. What's so funny?” “John, no, don't worry about it. Just kept going.” And I put my arms across my chest. I said, “Listen, if you don't tell me what's so funny, no more PowerPoints. We're done.” And so finally, the board chair says, “Well, John, Hank is the chairman of our Buildings and Grounds Committee. And when he came on the board, his major assignment was to get that building next door built before summer starts,” and he said something like, “than to be in these boring meetings.” And he said, “I mean, to be in these meetings.”

Well, Al, in that moment, I just had this Holy Spirit epiphany. And I said, “That's it.” He thought the only way he could volunteer was to be on the board. Well, what they finally did is they released him to just be a volunteer, and he didn't have to go to the boring board meetings. And many times, the old wisdom is, you know, let's get an accountant on our board, an attorney on our board, a guy that owns a backhoe. And really, if you ask those people, they would much rather volunteer, not serve on the board. But other people are just wired to love the strategy of board meetings. And so if you need a board member, get a board member. But if you need a volunteer, don't make them come on to the board just to volunteer. So, yeah.

Al: Good advice. Yeah. Fantastic.

And so those are the five—

John: Yeah.

Al: —top, out of 40, John.

John: I probably cheated a little bit and worked in a couple more, but when I'm out there and doing workshops and whatever for boards, those kind of summarize for me where the particular irritants are, the dysfunction. I talk about every board member brings their delightful dysfunctions into the boardroom from their previous board meeting.

Al: As I reflect on these top five, you and I learned some policy governance from some of the same sources. And, you know, I came to really appreciate the Carver model in policy governance. And I've run into several leaders, several organizations, who say, “Yeah, we have policy governance, but that keeps the board too far away from what's really going on. And, you know, the CEO is the only source of information. And, you know, we don't really get always the full story from the CEO as to really what's going on.” You know, back on number one there, kind of what's the sweet spot between policy governance and micromanagement, what's your response to that criticism that because of the board only employs the CEO, and sometimes the CEO is the one that just completely controls information going back and forth, and the board's not getting a full perspective, how do you avoid that with policy governance?

John: It's a common problem. And I know people that have gone to the pure, true John Carver policy governance and have lived to regret it. I flew to Pittsburgh, I won't tell you the organization, but it was in Pittsburgh, to work with their board, and the board chair said to me, “John, if you mention the two words policy governance, they're going to throw you out of the room. So please don't do that.” Other times, I remember a ministry in Florida couldn't find anybody except me in California to fly to Florida to help them decide if they wanted to go with policy governance. A couple of people on their board used it in other boards.

So Bob Andringa’s book, with Fred Laughlin, Good Governance for Nonprofits, it's not a weaker model; it's just a more-benevolent model with the words and the metaphors that describe a board that focuses more on policy. But if boards appropriately have clear protocol on how senior team members can come to board meetings or board retreats and give reports, and there's time for interaction—I like a combination senior retreat/board-member retreat once a year where they're all together—but the protocol is in the hallway, the board member doesn't say, “So how is Susan really doing as the CEO? You can be honest.” I mean, none of that stuff. And no campaigning by senior staff for more budget. But it gets, Al, it gets to that question of the highest priority for a board other than knowing God's direction is do we have the right CEO? And if the CEO is blockading feedback from the staff, and the annual 360 evaluation is showing that, then maybe you’ve got the wrong CEO.

But there's a lot written on it. I think we have a chapter in one of our books, Dan and I, on that staff members at board meeting, and what are some of the protocol for that? Yeah. Policy governance is not for everyone. But I have lots of boards that tell me they're policy governance, and I get in there. And one board comes to mind. In a board training, they said, “John, we need 40 minutes for a board, a business session halfway through your day.” And so that was great because I could watch them. And after that board business session, I said, “We've just gone through the continuum of policy governance. And you all said you want to be an eight or a nine next year, and you just spent most of your 40 minutes on a $40,000 decision, and you have a $20 million budget.” And they just like, “Oh.” So it's hard work. It's hard work. But yeah.

Al: I trust you’re enjoying our podcast today. We’ll be right back after an important word for leaders.

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Al: Welcome back, with John Pearson.

Well, let's go to the clear next discussion and that's the CEO/board-chair relationship. And many say that's the most important relationship in any organization. And you've been on both sides of this relationship. You've served as the CEO of several nonprofits over the years and as a board chair, and you've advised numerous boards and CEOs. So what are some key practices that you recommend for a successful relationship between a CEO and a board chair?

John: Well, that question is worth another 40 lessons, Al, for sure. A couple of things. One thing that brings clarity is I like every CEO to have three to five annual SMART goals for the year. SMART, I use specific, measurable, achievable, realistic, time related. And the CEO can recommend them with consultation with the executive committee maybe, but then the board approves them or changes them. And it's in the minutes. And then, I have a little—one of my board chairs, Pat Clements, introduced me to a form he calls the 5/15 monthly report, which is in the book that Dan and I did, called ECFA Tools and Templates for Effective Board Governance. And if anybody wants to email me, Al, obviously happy to pass on something they missed. But that 5/15 report is a monthly report. Here are the three to five SMART goals for the year. Here's this month's update on that goal, and the date that it's due, etc. Drucker says if you've got more than five goals, you have none. And so that's why I like the three to five goals. Then the board chair can use that as the primary conversation that he or she and the CEO have.

But I recently had a conversation with a board chair—excuse me, with a CEO—who, in so many words said, “My board chair thinks he's the boss of me.” And there's where the Carver policy-governance stuff comes in very handy. Carver says the board should speak with one voice or not at all. So the board chair’s own opinion of things doesn't really matter if there's not a motion in the minutes saying, “We want the CEO to do x, y, z.” The board chair has this important role of coordinating and encouraging and whatever, but the board chair is not a staff person and is not the boss of the CEO; the board is the boss.

So there's lots of resources out there. David McKenna’s book the Call of the Chair, published by ECFA, is absolutely fabulous. And maybe at the front end, he has this wisdom in there. He says, “After the board has elected the chair, it's not over yet. That's when you gather around the potential chair-elect and you say, ‘Has God called you to be the chair?’ And there's a holy moment.” And if that person isn't convinced of God's calling, then he says in another chapter, “If you're going to be the chair, literally, this is your highest priority in life.”

Now, I don't know how someone can be the chair of more than one board. I recommend that for most people they can sit, they only serve on one board at a time so they have time to do that.

Another person at a workshop I did recently just talked about, “I think this was my responsibility, but the board chair says no.” Well, then, there's a chapter in the book, in the More Lessons book, on the prime-responsibility chart. Just a one-pager. I picked it up when I was a young camp director in Bellevue, Washington. A guy on my board, a guy named Bill Banki, who's passed away this year, he could tell I was clueless. And he says, “John, at Boeing, we use the prime-responsibility chart, listing who's involved and what the key tasks are.” And it's the simplest thing. And so it's a form that helps clarify who has responsibility for all that. So that's a few things, but there's lots of materials. Maybe the bottom line, read David McKenna's book, Call of the Chair. It's available on Amazon or from ECFA. Yeah.

Al: Yeah. Great. Wow.

Well, one thing you talk about in your book is building relationships on the board. So now, kind of now kind of going down this sequence. You're on a board, you're with other people, you know, relationships are important. And we recommend that CEOs don't fill the board with their friends, but they've got to be intentional about bonding and people bonding as a board. And this includes sharing meals together, informal time. I'm experiencing this. I'm on a board where we've been meeting online for years now, with COVID. And that's really where I'm kind of insisting that we all get together here for an annual board retreat rather than having people calling in on Zoom. So what are some practical tips that you've got for fostering board communication when board meetings are happening and oftentimes on an online platform?

John: Yeah. Well, I would say don't meet online. So, I mean, obviously, a lot of people meet online. It is not the best. It is just not the best. But I realize why that's necessary. But for those who say, “Okay. I really believe God has called me to serve on this board. I'm going to limit my service to only one board at a time,” then the time factor is not as big of an issue. “Is God calling you to serve?” “Yeah.” “Okay. Well, then, how many meetings are we going to do in person versus online?” Again, it's not in the Bible. But if you were to ask me to serve on a board that met exclusively online, I would say no. I don't think you're going to get as helpful decisions.

In our More Lessons book, Dan especially, I think Dan wrote this chapter, “The Two Enemies of Sound Board Decisions,” he says, “Avoid being pressed for time and making major decisions remotely.” And by the way, in all of our books, Dan wrote 20 chapters and I wrote 20 chapters, and if anyone can figure out who wrote which, I will send them a Starbucks card. Nobody has yet. Now, we, obviously, edited each other's stuff. But if you do meet online, invest some time in relationship building around the circle. What's new in your life? Is there a prayer request? You know, prayer, the agenda seven days in advance, of course, especially online, have written recommendations written into the materials so that somebody doesn't have to spend 17 minutes revising a motion. So at least put a motion in there for the recommendations that are coming. In the book ECFA Tools and Templates, there is a—tool number 12 is a quarterly board-meeting agenda with sample recommendations. And those are all available.

And then the whole thing of multitasking. We've all been on Zoom calls where we see a person’s eyes go down, probably to their iPhone, and you can just tell they're multitasking. I reviewed a few books by Dr. John Medina, who’s from Seattle. He has a series of books called that he calls Brain Rules. And he says the brain cannot multitask. So really, you can't multi—you're either focused on the board-meeting online call or you're not. So the discipline of doing that.

Al: So no emails. Don't do emails during board meetings, I guess.

John: Apparently. Apparently.

Al: Darn.

John: And I just want to assure you, Al, I'm not doing any emails while you and I are talking.

Al: Me either.

John: That's where that 5/15 monthly report thing comes in very handy. People, because you're giving them a steady diet, maybe your board meets quarterly, your people are in the know because you've done that.

And then, one of the things I love about the board-policies manual, which Bob Andringa and Fred Laughlin created, if an item goes a little long, online especially, somebody on the board should have as their task to say, “Madam Chairwoman, is it possible that the reason this discussion went so long is we've got the policy wrong in our board-policies manual? And if so, then I recommend that our governance committee look at that. Maybe we need to up the amount of the unbudgeted amount that the CEO can approve in between meetings or something.”

So there's all kinds of things that you can do online. But oh, that's a huge challenge. Huge challenge. So meet in person as often as you can. And if you have to meet online, don't make huge decisions in the same meeting that the item was brought up. Give people time to pray and to consider because you want to look at the body language around the room, and you can't see that online, you know. Yeah.

Al: Yeah. And I know several organizations will have quarterly board meetings on Zoom and then at least an annual offsite where people get together. That's, yeah.

So, John, this has been really helpful, from both a practical and strategic-thinking basis. But how about another practical topic? And that's, we've referred to it many times, board-policy manuals. So why are board-policy manuals important in nonprofit governance? I've worked one time with a church, and we just couldn't get a policy manual approved. It seemed like everybody wanted to just focus on actually micromanaging the pastor.

John: Yeah. Yes. Yes.

Al: So what are some key areas that should be covered in an effective board-policy manual? What do you recommend?

John: Well, Bob Andringa and Fred Laughlin wrote this wonderful book Good Governance for Nonprofits, and they created a template that's included in the—they gave us permission to put it in the ECFA Tools and Templates book, so you can download that. And so it's 10 to 15 pages, and in about half a day, a committee can kind of fill that in and come up with draft one. The concept is it gives you the structure. And kind of a term from John Carver, I like to use the metaphor of a corral, the fences of a corral. And so a board-policy manual, a BPM, gives you the board sets the fences to the corral and says to the staff all of the, and put little—and if I were on a whiteboard in a session, I would put a bunch of X's inside the corral—and the board says, “You can operate inside the corral, and you can do all these things because it's per policy. But if you step outside the fence, the CEO needs to report to the board that you've gone outside of policy.” And so that means that staff don't need to come to the board to ask for permission for something that's already in the policy. But if more permission is needed, you can deal with it.

So at a board meeting, the CEO says, “As you know, one of our agenda items is to look at our board-policies manual. And I just want to report we've stayed within policy in everything that we've done, so help me God, with one exception, one time,” and then if I'm in the room, I put an X outside the corral, “there was one time three weeks ago when I had to go outside of policy, and I couldn’t get ahold of the board chair or our board treasurer. And I hope, I pray, that you think that I made the right decision, that maybe you would have made the same decision.” And they go high-fives and three cheers and, “Great decision. We would have done the same thing. Way to go.” Then, there's a pause, and then the CEO thinks, “Well that went well. Maybe I should tell them about this other exception.” And then, so then down below that fence, he puts another X, or she puts another X, and the board says, “No. Actually, we can't agree with that because of COVID, because you're short one senior team member. In fact, maybe we should move the fence in in that area because we don't think that was wise to do. We understand why you did it. But that's our job is to determine.” So the fence is going in and out based on the high-fives and the, like, no.

But you get into a routine. And the policy, the book that Bob and Fred wrote is literally a color commentary on the numbered items in the board-policies manual. It's the slickest thing. And I would not agree to serve on a board, I'm too old to be somebody's CEO, but without a BPM as the structure, everybody's just guessing, and it's just opinion, and that doesn't honor the Lord because it creates lots and lots of conflicts.

Al: Yeah. Why not have it written down? And then the sustainability of it over time is another factor. If you've been through something, you learn from it. And yeah, so.

John: Yeah, yeah. And Al, you know, it covers organizational essentials like mission vision, values, the board structure, the processes, who can be on it, how many, the terms. You don't have to put all this up in the bylaws. A lot can be there. Board/staff relationships and then what parameters are there for exec’s program, how often and how do you evaluate all of your key programs, products, and services? That's really to me is one of the great values of that, that the CEO says, “We're doing great,” and the board says, “How do we know we're doing great? When's the last time we evaluated the ABC program?” So, yeah, very helpful.

Al: It's like the president says, “We have a great culture. People love working here.”

John: Yeah, yeah.

Al: The board should ask, “Well, how do you know?”

John: Yeah, “How do you know? How do you know?”

Al: “How do you know?”

John: Right. Totally. Yeah. And praise the Lord for Best Christian Workplaces. That helps.

Al: You know, you can measure culture, there's no question.

John: Yes, yes.

Al: No question.

John: Yeah.

Al: Yeah.

Well, John, you've seen so many boards, and you know what makes a healthy board, and also many ways that a board can operate in unhealthy ways, you know. So let's now, high level, let's just leave our listeners with your top three or four no-nos for board practices. What are a few things that will derail a board's effectiveness?

John: Yeah. Let me give you three. One, don't skip the really important four phases of bringing new members onto the board, and if you think of them and to give yourself an assessment of cultivation, recruitment, orientation, engagement. All four of those have important distinctions and functions. In my book, Mastering the Management Buckets, there's a chapter, of course, called the “Board Bucket,” 20 buckets, and so I talk about seven steps of going through those four phases. But if you skip them, you end up with people on the board that should not be on the board. And if you skip engagement, you have recruited some wonderful people that aren't engaged deeply in your ministry.

Number two, don't lack courage in addressing board-member dysfunction—unexcused absences, lapses in confidentiality—lesson 21 in our book, “Back Off the Ledge of Dysfunctional Mayhem.” So there's a lot of dysfunction that exists and continues to exist because the board chair and the governance committee or executive committee are just not courageous enough to address it as Matthew 18 calls us to do.

Maybe number three, don't fall asleep at the wheel. Don't miss those God moments. Don't whip on by because we got to finish the agenda. I was in a board meeting where a CEO gave a report, and the board chair immediately—it was a fabulous report. I mean, it was stunning. International ministry—and the board chair said, “I think we need to sing the doxology.” And so it was this wonderful chorus of “Praise God from Whom all blessings flow.”

And don't miss asking what I call the gold-standard question. After every board meeting, and, you know, let's say your local-church board and board members are driving home at night, and they get home and their spouse says, “So how was the board meeting?” “Wow. This was one very special board meeting tonight.” “Really. What happened?” And I sometimes encourage board members, “So what's your little elevator speech now after this meeting, when your spouse or your colleague at the office asks you about that board meeting yesterday?” Be prepared because that raises the joy of serving on boards and encourages other people. It becomes contagious. “Well, I thought board meetings were this.” “No, we had a God moment at that board meeting.” The no-no is don't miss those meetings, so.

Al: Yeah. You don't want the answer to that question being, “What a waste of time.”

John: Oh, yeah. Yeah, yeah. When I do a board consultation, sometimes I'll call every board member in advance, and I’ll often ask them that gold-standard question. And I mean, it's a usual board, but two of one, they all gave me just stunning answers. I mean, there was just joy, and it was the leadership that made that possible.

But, you know, there's still some things like derailers, lack of humility. Lesson nine is “Serve with Humility and Experience God's Presence.” I was on a board, and we were taking turns at doing this little thing we call 10 minutes for governance at every board meeting of just enriching our lives with governance resources. And the person who was assigned this chapter, “Five Minutes of Conversation, Five Minutes of Q&A,” he said, “Well, my first question is, how come the lesson on humility isn't chapter one in the book rather than chapter nine?” And I thought, “He's absolutely right.”

So, you know, the other thing that derails you is venturing into the weeds. And in the book, we have a chapter called “Apply for a Staff Position and You Can Deal with That Issue!” Help board members not to cross the line into operational details. And so the board chair constantly has to remind people with questions—often, if they are a volunteer in the organization, they'll bring their volunteer in, “Sorry, we're not going to get into the weeds. That's not appropriate for the board.” And that's where the three hats fit in. So, yeah, yeah.

Al: Yeah. Great. Well, this is great.

Our vision at Best Christian Workplaces is that Christian-led workplaces set the standard as the best, most-effective places to work in the world. And we know that boards shouldn't get into daily operations. We've talked about that.

John: Yeah.

Al: But are there some ways that boards can have influence on building a healthy workplace culture? We're asked that question: how can a board encourage senior leaders to pay attention to employee engagement and build flourishing workplaces?

John: Yeah. It's not easy for a board because you don't want to violate the protocol of going around the CEO. But I tell boards, when you engage deeply in an annual self-assessment survey and process and take the results and honor the results and start changing your own culture as a board, the rest of the organization will see that, and you will be modeling to them how important that is.

When you care about feedback—one of the tools in that ECFA Tools and Templates book is called Five-Finger Feedback. And I was helping a board—it was a nominating committee—kind of create their pipeline. At the end, the nominee-committee chair was a hospital administrator, and he says, “John, one thing I like to do before we all leave is let's go around the circle and hold up your hand, and put up one, two, three, four, or five fingers. Five is the best; one is not real good. Evaluate this meeting we just had.” And I thought, “Oh, my goodness, what are they going to say?” And that was really healthy. And they said, “And why did you give it that rating?”

Then, a second round was, “Okay. Now evaluate your own engagement in this meeting.” Well, I started doing that with the board I was chairing, and they all knew that at the end of the meeting they were going to have to evaluate the meeting and evaluate their engagement. Guess what? They stayed off of email, for the most part. So again, that says to the rest of the staff, we care deeply.

And then when they religiously conduct the annual performance review of the CEO or the lead pastor—and I love the 360 that Best Christian Workplaces provides—that communicates again that everybody from the board to the top leader gets evaluated. So that's part of it. It's hard and a lot going on, but again, if you say, “I'm going to serve on one board at a time, and I'm going to be committed to being the best board member possible,” there's time to do this kind of stuff.

Al: Well, John, we've learned so much from our conversation. It's been like drinking from a firehose. We've covered from—I love the reference to the 10 basic responsibilities of a board, the three hats. Gosh, I've heard you talk about three hats, but it's so appropriate in the boards that I serve on, particularly a smaller board. It's mostly a working functional board. But governance volunteer and the participant hat, the stewardship of powers. How are we listening, listening to the voice of God in our role? And yeah, it’s part of our responsibility. And affirming that we've got the right CEO and that we as board members own the strategy. We’ve got to do that. So your lessons. And I love the dialog about policy governance versus micromanagement and kind of where do you want to be on that one to 10 scale. The importance of dating. Oh, the pain that we feel when we didn't date those board prospects, and they came on the board, and it just was a really difficult season. And then later on you talked about the courage, of course, and dealing with some of those situations. But you're leveraging the three S's, leveraging the God-given gifts, both looking at spiritual gifts, social styles, and strength finders, and how a combination of those is kind of like it's a holy calling. So yeah, the board/CEO relationship, the advantages of a board-policy manual, the three derailers. Gosh, I see several articles coming out of this conversation itself, but you've already written the books. And we're going to put these references on our show notes here for the podcast.

So John, is there anything else you'd like to add to what we've talked about already?

John: When you mentioned the strength finders, I'm reminded that I encourage board members to do little tent cards that list their top five Gallup strengths. So when committee assignments are being made, you're like, “Okay. This one requires somebody with WOO: winning others over. Or this one re— this.” And so it's just a reminder who God has made around the table.

But mostly, maybe last thing is the importance of creating a lifelong-learning culture on the board. Would you trust a surgeon who stopped learning? Would you trust a board member who stopped learning? And so you'll find in these Lessons from the Nonprofit Boardroom, Lessons from the Church Boardroom a lot of lifelong-learning things. And don't go so deep into the governance material that you forget that you are leading a Christ-centered nonprofit. So wow, it's just so many things to do, but just start small. Start doing a couple different things each time, and God will be honored.

Al: Yeah. Great. I appreciate your commitment to lifting up leaders of integrity who will steward their influence. And thanks for taking your time out and speaking in the lives of so many listeners.

John: Al, my privilege. Wow.

Al: Thanks.

Thanks so much for listening to my conversation with John. I hope you enjoyed it as much as I did.

And you can find ways to connect with him and links to everything we discussed in the show notes and the transcript at workplaces.org/podcast.

If you have any suggestions for me about our podcast and have any questions on flourishing workplace cultures, please email me, al@workplaces.org.

And leaders, if you want to improve your leadership, expand your organization's impact for good, and see greater faithfulness in our broader culture, help us see more Christian-led organizations on the road to flourishing. To help, please share this podcast with another leader or launch a project in your organization to discover and improve the health of your workplace culture. If you're interested in learning more, go to workplaces.org and request a sample report.

Outro: The Flourishing Culture Leadership Podcast is sponsored by Best Christian Workplaces. If you need support building a flourishing workplace culture, please visit workplaces.org for more information.

We'll see you again next week for more valuable content to help you develop strong leaders and build a flourishing workplace culture.

Al: You're going to love tuning in to our next episode as we focus on key steps to developing outstanding leaders and creating a leadership pipeline for your organization. My guest is Dr. Rob McKenna, the founder of Whole + Intentional Leadership Development, or WiLD Leaders.