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Lecture 2: Selecting, Evaluating and Supplying Resources
Course: Twelve Marks of a Healthy Board
B. Selecting, Evaluating and Supplying Resources
Healthy boards are intentional in selection process of board members and have a broad manual in place. They avoid spiritual dysfunction, monitor and evaluate results, and ensure adequate resources to accomplish the mission.
Bert Downs: We are back into our discussion of the Twelve Marks of a Healthy Board. In our first session we talked about the need for a board to have a clear understanding of its roles and responsibilities. And also that it stays mission focused. In this session we are going to take up five more of these marks. I’m back with John Johnson and David Jones and we hope to give you some guidance as we put together what amounts to an effective, strong board that has a pathway to follow as they grow in their own abilities and excellence. We are going to look at the third mark which is that the board evaluates and monitors results. If you were a consultant to a board now taking this on, where would you begin to help them with this one?
2. Evaluation and Monitoring
John: Jim Collins once said that a culture of greatness is a culture of discipline. I always remember this because a good board is a disciplined board. A culture discipline requires some metrics so you know where you are. People ask me, ‘How is your church?’ I can say that it is great but what am I basing that on? Most ministries have never really tried to figure that out, so recently we sat down to try to come up with some metrics. Metrics that would establish whether we are meeting our aims, to look at what we are aiming for and what are the parts of that. Also who is going to do it, how is going to be done, how are going to report that and what will be the implications for our decision making?
Bert: How do you distinguish metrics from goals?
John: They kind of shade into one another. Metrics are where you’re saying, ‘How often do we get second time visitors?’ ‘Will people come back a second time?’ That’s a good metric. We might say that we are just interested in how many guests we get but if they don’t come back that tells you something. So I suppose that at the same time that you are looking at these metrics you are also saying what would be your goals. We might say that we would love to see 75% of first time visitors become second time visitors. So it moves naturally into that. But the first thing to establish is the non-negotiable metrics. Every church has to figure those out. We recently came up with about 12 or so. We said here are the metrics; we want to measure our church by these standards. Thus we can create a culture of discipline.
Bert: So give us a taste of just a couple of those metrics
John: Well one indicator is what percentage of people are giving. That’s an important metric. If only 30% of people are giving financially, that means that 70% are not really committed to the organization. Another indicator is attendance, also how many people are getting engaged in small groups? I talked to a pastor yesterday who pastors a church of 9,000 and he gave me an astounding figure, 90% of the people who go to his church are in small groups. The point is that when you can get people at that level; it means that they are going to stay with the church and be committed. So what he and his church establish as a key metric, is not just how many people are coming to church and what the growth rate is but how many people are staying. A big part of that is how many people are in small groups.
Bert: When you can report on those kinds of things that helps the board focus on the big picture level.
John: It also keeps them happy!
Bert: And that is important! David what does this look like in your situation?
David: I am surprised how often ministries and churches don’t have measurements of success. They might have a dynamic mission statement and if you were to ask them how they are doing towards their mission statement they would say that they are doing great. How do they know this? They can’t give you specific measurements against specific goals. It is important for the board member to know what is being measured. I don’t think the board member has to do all the measuring or get bogged down in all the little details. But at the board level the board should be aware that there are measurements of success. They should ask, ‘How will we know if we are accomplishing our mission?’ There should be certain, very specific things that can be quantified as progress toward achieving your mission. I don’t know if we think this is not Biblical; after all there is a book in the Bible called Numbers! But is seems like we have this fear of wanting to quantify ministry. Yet having those metrics, having those measurable goals is the best way to know if you are hitting the target or not. So you know if you are moving in the right direction towards achieving your mission.
John: Sometimes I get criticism as people say that we are starting to sound like a corporation. They tell me that God wasn’t into numbers to which I reply well he actually wrote a book called Numbers. Actually God pays attention to a lot of measurements. In fact one day, so it says in Scripture, we leaders will stand to give an account (Hebrews 13:17). This tells us that God must have some metric. The Bible says: ‘Let not many of you become teachers knowing that as such we will incur a stricter judgment.’ So once you start looking at Scripture you see metrics everywhere. You don’t want to establish artificial ones but ones that are Scripture based. So while we are interested in how many people are coming to Christ; what we really want to know is how many are becoming disciples. This is because Jesus sent us out not to make decisions but to make disciples. We’ve got to make sure that our metrics are reflecting what God is mandating.
Bert: In my world which is a ‘work with church’ world I often am accused of caring only about numbers. By the way the book of Acts is filled with numbers so the Early Church kept track of numbers. I just always say that if you can’t measure it you probably aren’t doing it.
John: I think sometimes it really becomes an excuse to not be held accountable. Actually as we have started to get much more serious it’s scary, it’s risky, because in our reporting we might say: ‘You know things are really flat here.’ This forces you to make some potentially hard decisions. But then again that is what we are supposed to be doing.
David: I think what you just said Bert, is so important because what you measure says a lot about your priorities. Again the board needs to be involved in setting the agenda for what we are going to measure because that says everything about the priorities of this board.
Bert: Well our third point was: evaluate and monitor results. Our next point is that a healthy board helps to ensure adequate resources to accomplish the mission. Now there is a little riskiness in getting involved in resources but let’s explore that. What does a healthy board do in terms of helping get resources for an entity?
David: Well I think the budget needs to reflect what the mission is. I amazed at often there is a disjoint between a final budget and the mission of an organization. I passionately believe boards should not be bogged down with money. Money shouldn’t be the focus of a board agenda. But money is very important. You have to resources to accomplish your mission and those resources can be cash, they can gift in kind, also people are a resource. So the board has a huge role in assuring that this church or this organization has the resources it needs so it can accomplish the mission. Everything comes back to mission again. When you look at the budget of a Christ centered organization you should be able to quickly determine the priorities of this organization. The budget should say everything about those priorities. But the board also has a responsibility to make sure there is a proper fund raising plan, a fund development plan in place, that there are policies in place that ensure ethical behavior /professionalism. Also we must do everything properly, we need to walk in the light on money matters, and we need to be open and honest. We should be accountable to our various constituents when it comes to money. You want to make sure that you have embraced Biblical, godly principles in how you handle money and resources. But a huge responsibility of the board is to make sure that the right kind of fund development is in place so that the organization will have the resources it needs to accomplish its mission.
Bert: So we are back to that absolute connection between the mission and the resources that go with it, for it to happen. Board members: they are responsible for a lot of things that David already outlined for us, very capably. Are board members givers? What’s their responsibility there?
John: They should be the prime givers. Giving is saying: ‘I really believe in what we are doing.” If a board member is not sacrificial and generous you have to question whether he is really behind this ministry or behind you as a staff. This raises the question of whether we should be aware of what others give. There are different schools of thought. Probably because of my own concern, that if I know what you give, I may treat you differently from someone else. Because of this I have not historically done that. Though I unashamedly say to my board I expect you to be the example of what we are doing here in terms of giving. None of us as leaders can call our church to be sacrificial and generous if we aren’t living that. A lot of the tension between staff and board tends to be when staff are saying that here is the ministry and that they have faith and can do this and we just have to believe in a big God whose arm is not too short. But the board member who is working out of his own context has to be very careful of making sure that we are responsible not reckless. Sometimes it creates tension and you want to get everybody together and say we all have to believe in a big God, that God can do anything, but we also have to be really responsible with our reporting and where we are at. But it’s an ongoing tension I find in my ministry all of the time.
David: Well I tell nominating committees and the evangelists we work with: avoid putting someone on your board who has an allergy to fundraising or really odd or peculiar views or notions of money. Why would you want someone like that on your board? It’s just going to create havoc on your board. Through the years I’ve thought a lot about this. Board members must support the solicitation efforts, the fund development efforts of the organization. There are lots of ways to do this. They can introduce the organization to other potential investors; they can provide contact information for people who they think are passionate about what the organization is doing. Board members should be willing to say thank you when called upon to call someone to say thank you for investing in what we are doing. They can host events. Village church recently did a massive capital campaign during the recession and the Lord provided. But a lot of the pledges of money were raised in house group meetings and those meetings were hosted by board members. Board members can also go after ‘gift in kind’ revenue. The solution to every need in a Christ centered organization or church isn’t always cash. Board members can also get gift in kind; they can be involved in negotiating bids to get a cheaper price. There are lots of ways boards can be involved in generating resources for a non-profit or for a church. However boards also need to be involved in forming policies. I had the leader of a non-profit organization call me recently and ask if I would do a certain thing. He said he was pretty sure it was legal. I said that just because it’s legal doesn’t mean it’s something a Christ centered organization should be doing. So a board has a responsibility as well to correct the boundaries, to help shape some of those fund development policies and procedures. They need to make sure the organization is behaving in a very Biblical and a godly manner. Something might be fine with the tax department or the law but on closer examination you would say: ‘I’m not sure that this follows a good Biblical principle.’
3. Avoid Spiritual Dysfunction
Bert: So we have metrics which are those important measurements of accountability and that carries over into the fiscal area that we have been talking about. The boards are responsible to find resources to invest in this thing that they believe in. The next mark of a healthy board, I think, ties in with that only it’s a little broader it’s the mark that healthy boards avoid spiritual dysfunction at all costs. This is one that might need an example or two in the negative direction. What do we mean by that?
John: Well boards can be like a family with a lot of dysfunction going on. Maybe there are ongoing power struggles, mistrust between one another or even dislike. Some of the dysfunction I have observed is because we, as Christians, don’t know how to disagree very well and this is where it really surfaces at a board level. We don’t know how to disagree without, at times, bringing God into the issue. So a board member may say: ‘I am convinced before God, God has laid on my heart, I believe this what we must do‘. This begins to paralyze the discussion because if you are seeing the issue very differently you are put into the position of arguing with God. So a lot of times people will feel strongly in terms of disagreement when what we need is a board chairman who says: ‘You know we are not all here to agree on everything.’ I remember one of our board chairmen would invite us to ‘Put our thoughts on the table, let’s disagree’. Because actually when we come and engage in discussion that is when we make some of our best decisions. But know that in disagreement it is not personal and secondly I have had to say sometimes, and it sounds awkward, ‘But can we leave God out of it’. Meaning, of course we want God in all of what we do but let’s not position ourselves to suggest God is on my side of the argument in this matter.
Bert: Well it sounds like maturity is a big deal in this thing.
David: That is where the chairman plays a really important role in making sure that non-issues or issues that are strictly a matter of taste don’t hold up board decisions. Too often non-issues are allowed to come into board meetings which have nothing to do with the agenda or with the mission of the church or the non-profit organization. The chairman has a critical role in not allowing those types of discussions to surface because they will create dysfunction. It saddens me to see how often huge strife and dysfunction can enter into a church or Christ centered organization over something that is strictly a matter of taste, something that is really a non-issue. Anyone who has served on a board where that happens frequently knows how unpleasant that is.
John: Sometimes what you are seeing surface is deeper underneath, possibly an issue of control and who has got the power.
Bert: What might be a couple of things that are really crucial: to not just stop the dysfunction but actually invest in your spiritual leader so that they can control these sorts of circumstances? What do you do?
John: That’s where your personal relationship comes in. You need to plan your calendar so that you are regularly seeing all these leaders, and building relationships. Sometimes someone will say, ‘Thanks for having lunch but I’m sure you had something you wanted to talk about’. Lot of times I will say that I just want to get to know them. Because the more we get to know one another the more we can engage in trusting. I will approach something differently when I feel I know somebody’s heart. But I think the reason for the dysfunction is when we get away from something boards need to become much more a part of and that is prayer. Sometimes we have had to say that we know we are going to spend the next 40 minutes talking about a deficit issue, what if we spent 40 minutes on our knees? Saying; ‘God, this is far bigger than us, this is nothing to you, but we have no wisdom except to say God we need a break through we need you to do something’. I know that comes at the risk of trying to sound super spiritual but boards need to realize they are a spiritual entity. Too many times we are trying to tackle things without asking is there a word from God? We need to ask what God has been saying to us in recent weeks, from the pulpit. If two weeks ago God said, ‘If you have the faith to move a mountain’, that should enter into the discussions. God obviously is speaking, then we need to move to get on our knees and honestly say: ‘God with all of our wisdom we are totally lost.” I think at times that is when God really does something. I always remember at Village (church) when we were wrestling through a particular issue and one board member said: ‘You know I think the issue is that our egos are out of control and I think we need to humble ourselves.’ We all got on our knees and we prayed and asked God for forgiveness. It was radically different after that.
4. Have a Board Policy Manual
Bert: We are going to move to our sixth mark and this is one where it is important to have that board policy manual in place. That seems kind of dry but that’s a crucial tool, right?
David: It is crucial. I think it is part of understanding your role and responsibility as a board member. This first struck me a few years ago. I’ve been with the Palau Association 33 years and a few years ago our board was debating a certain policy and suddenly it occurred to me: ‘I think 25 years ago we already answered that question and passed the policy! It must be in the minutes somewhere.’ The great thing about having a board policy manual that clearly articulates the vision, the mission, the values, the beliefs is that we can ask if everything is lining up against those. Then we should have, in one organized place the governance policies that we have passed and adopted so we can, as a board, move towards accomplishing our mission. A board policy manual should clarify beliefs, vision, mission, objectives. But also it should clarify chain of command and who has authority in certain matters. It that’s not clarified then dysfunction can enter in when multiple constituents think that they have the authority in a certain area. There should be in the board manual a job description for the board and for the senior leader. It should talk about committees. I am a big believer in board committees. I think that a board can accomplish a lot of its work very effectively through talented, gifted people, on that board, operating either in ongoing or ad hoc committees. A board policy manual should specifically define staff responsibilities and state which is staff work and which is board work. You need to have in there your financial policy because a board has a huge fiscal responsibility for the entity that they are serving. Those financial policies should be in the manual as well as fund development policies. The great thing about having some sort of board manual is that as the board does its work; as it passes new policies it all goes into the manual and it all right there in one book. I think what happens too often without that, is that someone will have to search back through previous minutes to find out what was decided say five years ago. The manual basically helps the organization be more professional, be more efficient and be more effective. The great thing about a board policy manual is that when you bring in new board members they can be handed the manual in order to see the ground rules and the game plan and how this organization works.
5. Being Intentional In the Selection of Board Members
Bert: It’s a huge part of a word that we have been in and out of with these five marks; and that word is intentionality. The last mark says that we are very intentional in the selection of board members; that is not something that we just do carelessly. John what is your approach to selecting board members?
John: I think there is a certain health in that selections are not made by the board itself unless there is certain amount of ingrownness, which can lead to mistrust. I think it is something where you invite congregational participation. So the congregation has a voice but it’s also important that it is carefully led and that it is really clear what we are looking for. I try to say to our nominating group; ‘It’s critical first of all that there are character qualifications that match I Timothy 3’. A lot of times that is where the nomination process stops but I think you need to say: God obviously gave us clear gifts. Romans 12 speaks of a leadership gift. It only makes sense that this person also needs to be gifted in leadership. I’ve been on boards where people have wonderful character but they’re not leaders and they just take up space, frankly, most of the time. But on the other hand you don’t want someone with a great gift of leadership that doesn’t have good character. We need to look at the values and the gifting, then that gifting in leadership also. We want to look for someone that has the gift of wisdom or discernment. I think those are so critical as pieces, along with leadership. Then I think the other matter that is very important is that the person is committed to the vision, the mission, the staff and the senior pastor. Because if someone is not committed to the pastor, even though they have all the other qualifications, it will be a disaster later on. Now when I say that; I am not looking for ‘yes men’ I want people who will say that they want the pastor to succeed.
Bert: Now, David, with your evangelists and non-profit groups you don’t have a congregation to elect board members so how would you go about it?
David: I agree it needs to be intentional. It needs to be an extremely intentional process. In a church you have an opportunity to see someone in action in the congregation. They may serve on another committee, they may lead a life group, they might be a Sunday school teacher. There is an opportunity for people to get to know this person and for them to decide whether or not they would be a good fit for the board. With most non-profit groups they don’t have that opportunity. So you need to find ways to get to know the candidate, and to see the candidate in action. I believe you need to get to know the candidate’s spouse because I believe an effective board member can neutralized by a resentful spouse. They may think that their spouse is already over-extended and too busy and now has joined a board. I have seen it happen. So there needs to be a very intentional process, you need to be very deliberate, take your time. It is certainly easier to get rid of a dysfunctional, unproductive board member before they are brought on the board because once they are on the board you are probably going to have to wait until their term is finished and that could be three years. There should be a nominating process that the board and the nominating committee has agreed upon and follow carefully. In the non-profit world there are ways to get to know board candidates. You can get to know them through your events, through your ministry activities and volunteering. For the Palau Association most of our board members came out of our crusades and our festivals. We get to observe them for a year or two years, leading the body of Christ in a particular city. So there is a great opportunity to get really close to them and their spouse and family, to be able to know their hearts and to build team work and trust. So there are ways to get to know people before you bring them onto a board.
Bert: So the message is really know your people, take the time to get to know them.
David: I had an evangelist a while back who came to me and asked me to describe the ideal board member. I had to think about it, then as John said there is a Scriptural qualification in any Christ centered organization especially a church. But look for people that love the Lord their God with all their heart, soul, mind and strength. Obviously they should be passionate about the mission and agree with the values of the organization. We need people who have big faith and are people of prayer. The last point: the right way to avoid dysfunction is to surround all the decisions with the right procedure but then surround it with prayer. It’s amazing how often prayer gets ignored. You want people who see the ‘big picture’ and who are encouragers. No one wants to be around negative people on a board. We need people who think critically but don’t have a critical spirit that’s important. The one that I talk about with the evangelists is how the new board member is going to fit with the other board members. I know there is a lot of talk about diversity and getting people with all kinds of different backgrounds, different opinions and different life experiences. That’s fine as long the board members can work together and understand each other. If you introduce someone into this team and they don’t fit together, it can create amazing dysfunction. Back to the spiritual issue you want board members who are discerning enough to know what a non-issue is. The best way to avoid unimportant issues is to recruit godly people to serve on your board who know the difference between an issue and a non-issue. Obviously you want people who bring a variety of life experiences to your board but fitting together is so important. As we mentioned earlier you don’t want people on your board who are not comfortable with fund raising.
Bert: So it’s: know your people, be intentional, this is an important team you are putting together and it needs to be put together very well. We’ve had five points in a short amount of time. We started with: a healthy board monitors their results and they ensure that there are adequate resources to keep the mission in motion and to make it work. They avoid spiritual dysfunction at all cost. We can never assume in that area; we have to be intentional there as well. Then we went to adopting the policy manual which is a critical tool in these five points we have just covered. Lastly we need to intentionally go about the business of finding those important board members who are going to move the mission forward.