ROBERT F. WAGNER GRADUATE SCHOOL
OF PUBLIC SERVICE
NEW YORK UNIVERSITY
Leveraging Non-Profit Boards for Organizational Success
Fall 2015
Linda Schechter Manley Office Hours: Tuesday 10:00 – 11:00 am (by phone)
email: or by appointment before class
Course Description
A strong board of directors is integral to the overall health of a nonprofit organization and directly impacts the ability of the organization to achieve its mission. Yet, one of the greatest challenges facing nonprofit leaders is how to build a board of directors that is motivated and engaged to provide strategic leadership while ensuring fiscal sustainability and transparency. This course will use case studies, role play and class discussion to transform academic theories regarding good governance to the practical tools to be used outside the classroom. We will take an in-depth look at applicable law and best practices to consider:
(i) The proper role of the board of directors;
(ii) How to build a strong board and cultivate board leadership;
(iii) Ethics and conflicts of interest;
(iv) Human resource management and executive compensation;
(iv) Leadership during a time of organizational change; and
(v) System reforms that would promote effective board oversight.
Class Format
Class learning will be primarily through supportive reading, lectures and group work. It is essential and required that students be prepared for each class. Class learning will be supplemented with online content and out of class assignments. It is imperative that you come to class prepared to actively participate in the discussion and willing to listen to our colleagues.
Course Requirements
● Class Participation (20%) – Participation includes presences, promptness, preparation, and engagement. Students are expected to attend all classes (with no more than one excused absence during the semester). Please email me before class if you will be absent. Use of devices for purposes other than taking notes is not appropriate.
● Weekly Assignments (60%) – There will be six (6) weekly assignments throughout the semester that will be discussed in class and then due by email at noon on the following Thursday. I will do my best to return the assignments during the following class or immediately thereafter. The assignments will be posted on NYU Classes so that you have the opportunity to begin work on the assignment in advance of the class if you so choose or so you can complete the assignment if you are absent.
● Term Paper (40%) – The term paper will be due on the final day of class and will ask you to make five (5) recommendations for changes that should be adopted to improve the function of nonprofit boards. The changes can be either policy related, cultural or legal or a combination thereof. The paper should be no more than 10 pages long excluding references and appendices. Grades on the final paper will have two components:
(i) A presentation to the class about your projects (20%); and
(ii) The quality of the paper and your recommendations (80%).
Course Schedule
Date / Topic / Out of Class Assignment / Out of Class Assignment Due DateSeptember 12, 2015 / Roles and Responsibilities of Board Members / Board Minutes / September 17, 2015
September 26, 2015 / Fiscal Transparency / Related Board Transaction Hypothetical / October 1, 2015
October 10, 2015 / Recruiting and Retaining Talent / Board Expectations / October 15, 2015
October 24, 2015 / Cultivating Leadership / Board Orientation Process / October 29, 2015
November 7, 2015 / Strategic Board Leadership / Research Potential Board Service / November 12, 2015
November 21, 2015 / Governance through Organizational Change / Strategy for Coping with Financial Distress / November 27, 2015
December 5, 2015 / System Reforms for Stronger Board Governance / Term Project / December 5, 2015
Detailed Course Schedule and Assignments*
1.Roles and Responsibilities of Board Members
Members of the board of directors of nonprofit organizations are fiduciaries who are charged with ensuring that the organization is properly run. During this class we will consider the:
(i) Function of the Board of Directors;
(ii) Qualities of high functioning boards; and
(iii) Legal responsibilities.
Reading:
● Right From the Start: Responsibilities of Directors of Not-for-Profit Corporations
● Independent Sector –Principles for Good Governance and Ethical Practice
● Better Business Bureau – Wise Giving Accreditation Standards
● 64th Associates, L.L.C., Appellant, v. Manhattan Eye, Ear & Throat Hospital
Assignment:
Prepare minutes of a board meeting from material to be provided.
2.Fiscal Transparency
A nonprofit organization’s reputation is its most valuable asset. To preserve and enhance a nonprofit’s reputation it must be able to demonstrate fiscal transparency and integrity among its board members. During this class we will consider:
(i) Conflicts of interest and self-dealing;
(ii) Code of Ethics;
(iii) Form 990 disclosure; and
(iv) Budgeting process.
Reading:
● Advising Nonprofits, Lawyers Alliance for New York, Chapter Three
● The Private Inurement Prohibition, Excess Compensation, Intermediate Sanctions, and the IRS’s Rebuttable Presumption, Guidestar
●How to Read the IRS Form 990, Nonprofit Coordinating Committee
● Internal Controls and Financial Accountability for Not-for-Profit Boards, New York State Attorney General
● Conflicts of Interest Policies under the Nonprofit Revitalization Act of 2013, New York State Attorney General
● New York Times Cooper Union Articles
Assignment:
Analysis potential related party transactions from material to be provided. In your role as Audit Committee Chair propose a course of action.
3.Recruiting and Retaining Talent
Nonprofit organizations largely rely on volunteer board members. Identifying, recruiting, engaging and retaining board members are an ongoing challenge. During this class we will consider:
(i) Process of board recruitment and nomination;
(ii) Desired skill sets;
(iii) Board engagement through committees etc. and
(iv) Succession planning.
Assignment:
In your role as Executive Director of a nonprofit organization draft a set of expectations for board members.
4.Cultivating Leadership
When functioning properly, boards consist of a group of individuals willing to commit time and resources towards achieving an organization’s mission. Encouraging proper operation of a board requires leadership of either (or a combination) executive staff or board officers. This class will focus on:
(i) Running effective board meetings;
(ii) Cultivating board leaders;
(iii) Committee Structure; and
(iv) Role of board and staff.
Reading:
● The Dynamic Board: Lessons from High-Performing Nonprofits, McKinsey & Company
● Daring to Lead, The Board Paradox, Compass Point
● Boards Should Only Have Three Committees!, Blue Avocado
Assignment:
You are Executive Director of a nonprofit organization. Your organization will be adding 5 new board members this year (bringing the total to 21 board members) and the board chair wants to ensure that the new board members understand their obligations as board members. The board chair asks you to outline a board orientation process for the organization to adopt.
5.Strategic Board Leadership
Ideally board members should be individuals with skills sets and perspectives that can be drawn upon to advance an organization’s mission and improve its operations. This class will focus on the role the board plays in certain key areas:
(i) Recruitment, management and evaluation of executive leadership;
(ii) Founders syndrome; and
(iii) Fundraising obligations.
Reading:
● Executive Director Evaluation Survey, Blue Avocado
● Evaluating Your Executive Director, The Enterprise Foundation
● Finding the Right ED: Creating and Managing an Effective Search Committee, Bridgespan
● CHARITY NAVIGATOR 2014 Charity CEO Compensation Study
Assignment:
Choose a nonprofit organization whose mission or work that you admire. Based upon publically available information (Form 990, annual report, Wise Giving Rating, board membership etc.) evaluate whether you would want to serve on the organization’s board. Prepare a 1 -2 page statement explaining your discussion.
6.Governance through Organizational Change
There are circumstances that challenge the ability and determination of a board to guide an organization. We will consider how board’s function when facing extraordinary challenges such as financial distress, changes in government policy and negative publicity.
Reading:
●TheM Word: A Board Member’s Guide to Mergers
●Charitable Insolvency and Corporate Governance in Bankruptcy Reorganization
Assignment:
Based upon a case study you will be provided prepare a memo to a board of directors to outline their options in like of financial challenges facing the organization.
7.System Reforms for Stronger Board Governance
Each class member will have the opportunity to present their recommendations for reforms that should be adopted to improve nonprofit governance. The recommendations will be discussed by the class and feedback will be provided.