March 2002

How can our board do long-range planning?

Question
Our community health agency has an enthusiastic Board of directors that meets six times a year. We know we should be doing long-range planning, but with so much happening in our field, it's hard enough to plan year-to-year. Do you have any advice on how we can make long-range planning a manageable and useful part of our Board's work?

Doug Macnamara answers
There are several components to your question that deserve comment, and your sentiments are common to many Boards today.

First, let's address the enthusiasm of your Board. Any community-based organization desires the support and good will of community members for its success. That said, many Board members have had little personal experience in doing Governance work. Governance is quite different from what we typically experience in our day-to-day lives as operators of small businesses, mid-to senior-level managers, professionals, or other valued members of our community running the operations of an enterprise. So, it is very important to ensure that your Board members are actually enthusiastic about governance work!

What is governance work? First and foremost it is generally not operational work. (Leave that to your CEO/Executive Director to handle, unless, for financial reasons, you are forced to be a working Board. If this is the case, be sure to clearly separate your roles. When you meet as a Board, attend only to Governance matters - avoid mixing in operational matters.)

Governance is primarily concerned about two things:
1. Ensuring the long-term sustainability of the organization.
2. Ensuring the organization's relevancy to a group in society that truly values and will pay for your services.

Ensuring sustainability
Generally speaking, sustainability means on ensuring you have the appropriate assets in place and that they are being stewarded well. These assets include:
· Human assets - Do you have the human resources, with appropriate knowledge, experience, networks, etc. that you need? What are the turnover/attraction/retention/succession issues? What training, quality, case review processes and strategies are in place? What knowledge management and innovation strategies are required?
· Structural assets - These include buildings, equipment, technology, systems and processes. Are they being depreciated, maintained, replaced appropriately?
· Relational capital - How are the relationships between your organization and its various stakeholders: clients, funding bodies, staff, aligned professionals, community groups, other agencies, suppliers, the public you serve? Do these stakeholders really understand what you do, appreciate your value, and know how to access your services?
· Social capital - (particularly important for community/health/nonprofit organizations) Are you achieving the outcomes that the community expects?
· Financial capital - Investments, debt/equity, cash flow, depreciation, profits, margins, returns on investment.
· Environmental capital - Environmental practices, waste liabilities, internal safety practices, safety of home-care workers, etc.

Often, Boards assume that inspecting the operational financials, approving a budget, and monitoring major expenditures fulfil their main sustainability responsibility. But there is significantly more to think about, strategize and ask management about, particularly in community health.

Ensuring relevancy
As a Board, you must (along with the CEO), address the key question of 'How does our organization provide value to your community?' As a key part of long-range planning these days, you should also ask: 'How will our organization continuously position itself to provide services of value to our community over the long term?'

This 'value positioning' is becoming an important characteristic of progressive strategic planning. Few strategic plans can state what we can specifically do, or which initiative to undertake, nine, 12, 18, or 24 months from now. Instead, senior leadership of organizations must answer the above questions and then, on a more near-term basis, flex its provision of programs and services to maintain the 'value positioning' it has created in the minds of the community it serves. Also, ensure that your services do not duplicate those of other community agencies.

Now, let's look at your six meetings a year and the challenge of doing long-range planning.

Board agenda setting
The average Board member spends three days or less per month thinking about or dealing with issues related to the organization of which they are a Director. Many Boards get caught spending their meeting time looking at operational reports, addressing correspondence, fire-fighting issues, etc. The real question the Board must answer: 'What is the best use of our time for governance of the organization?"

One of the best ways to focus on governance is to establish an Annual Board Agenda at the start of each fiscal year or appointment term. This includes the Board identifying five or six key governance goals for the year.

Put those key priorities in front of you, then allocate them to various Board meetings on your calendar. One health Board I serve on focuses our meetings like this:

March Approve Annual Business Plan/ Budget
May Ethics Committee Report, Board Performance Review
July Annual Public Meeting, New Board Member Appointments
September Board Policies Review, Strategic Planning agreement on the process for this year (Special meetings for strategic thinking / discussion / analysis / community involvement is scheduled separate from regular Board meetings)
November Professional Services Provision Review
December Strategic Plan finalization. Outcomes and Key Performance Indicators for CEO/Org for the next year established, direction to CEO re. Annual Business Plan development.
February Fundraising Committee report of past year, plan for coming year.

As you can see, these are all important governance issues for the Board to address. They are scheduled as the first items on the meeting agenda. The Report from the CEO, financial reports, communications, etc., follow. If we run out of time, the operational reports/issues do not get discussed. Many Boards build their Board meeting agendas the other way around and often run out of time to address governance issues.

Finally, I am a big fan of holding Strategic Planning and Governance structuring, training and development sessions outside regular Board meetings. This clearly shows their 'extra' priority or 'investment' nature, and the sessions have a very different 'flavour' as a result.

Doug Macnamara is President, Banff Executive Leadership Inc. - recognized as a leader in Canada in the provision of Governance and Executive development, coaching and strategic facilitation. He has been a member of various Boards for over 20 years, and has been facilitating and advising Boards for over 15 years. Most Recently, Doug was General Manager of The Banff Centre for Management.