Advice for EA boards

By Julia_Wise🔸, Ozzie Gooen @ 2023-11-09T18:59 (+57)

Context

As part of this project on reforms in EA, we've reviewed some changes that boards of organizations could make. Julia was the primary writer of this piece, with significant input from Ozzie.

This advice on nonprofit boards draws from multiple sources. We spoke with board members from small and larger organizations inside and outside EA. We got input from staff at EA organizations who regularly interact with their boards, such as staff tasked with board relations. Julia and Ozzie also have a history of being on boards at EA organizations.

Overall, there was no consensus on obvious reforms EA organizations should prioritize. But by taking advice from these varied sources, we aim to highlight considerations particularly relevant for EA boards. 

We have also shared more organization-specific thoughts with staff and board members at some organizations.

Difficult choices we see

• How much to innovate? When should EA boards follow standard best practices, and when should they be willing to try something significantly different? 
• Which sources do you trust on what “best practices” even are? 
• Skills vs. alignment. How should organizations weigh board members with strong professional skills, such as finance and law, with those who have more alignment with the organization’s specific mission?
• How much effort should be put into board recruitment? Most organizations spend less time on recruiting a board member than for hiring a staff position (which probably makes sense given the much larger number of hours a staff member will put in.) But the current default time put into this by EA organizations may be too low.

Some things we think (which many organizations probably already agree with)

• Being a board member / trustee is an important role, and board members should be prepared to give it serious time.
  • “At least 2 hours a month” is one estimate that seems sensible for organizations after a certain stage (perhaps 5 FTE). In times of major transition or crisis for the organization, it may be a lot more.
• It’s best to have set terms for board membership so that each member is prompted to consider whether board service is still a good fit for them, and other board members are prompted to consider whether the person is still a good fit for the board. This doesn’t mean their term definitely ends after a fixed time (they can be re-elected / reappointed), but people shouldn’t stay on the board indefinitely by default. It also makes it easier to ask someone to leave if they’re no longer a solid fit or are checked out. Many organizations change or grow dramatically over time, so board members who are great at some stages might stop being best later on.
• It’s important to have good information sharing between staff and the board.
  • With senior staff, this could be by fairly frequent meetings or by other updates.
  • With junior staff who can provide a different view into the organization than senior staff, this could be interviews, office hours held by board members, or by attending staff events.
• It’s important to have a system for recusing board members who are conflicted. This is both for votes, and for discussions that should be held without staff present. For example, see Holden Karnofsky’s suggestion about closed sessions.
• It’s helpful to have staff capacity specifically designated for board coordination.
  • It’s helpful to have one primary person own this area
  • The goal is to get the board information that will make them more effective at providing oversight
• Boards should have directors & officer insurance.

Expertise on a board

Many people we talked to felt it was useful to have specific skills or professional experience on a board (e.g. finance expertise, legal expertise). The amount of expertise it’s feasible to get on a board probably depends on the size and network of the organization.

Disadvantages of board members with multiple roles

• If a person has several roles in the EA ecosystem, it might make people reluctant to criticize them. It can feel like you’ll damage your chances of getting hired or funded at any of those places in the future.
• It increases systematic risk: if one person has a scandal, it can affect all the organizations they’re involved in. Or if an organization has a scandal, board members associated with it may need to recuse themselves from some board duties.
• It makes things more complicated for the board member. They need to keep track of which information they can share where. It may reduce their flexibility in changing roles, if this would create a conflict or circular reporting loop with one of their existing roles.
• When the interests of different orgs come apart, they owe loyalty to multiple places.
• We recommend weakly against having non-executive employees as voting members of the board. It places them in a circular position of reporting to the executive director who then reports to the board. 
  • Having the executive director on the board can make sense, maybe in a non-voting role.
  • However, it can be very useful to have some staff present at board meetings for providing context to the board (often about operations or finances).

Funders on a board

• It’s pretty common outside EA for a funder to have a seat on a grantee board (e.g. the Ford Foundation often has a staff member on the boards of grantee organizations.) This is also the case with some EA organizations.
• It may dampen honest board discussion to have funders present, because the board members or staff don’t want to look bad in front of a funder.
  • In this situation, the non-funder board members might want to have a private communication channel, or might want independent meetings at some frequency.
• In some cases it may also be helpful to an organization to have a funder on the board, if the board is discussing legally privileged information that they would otherwise not be able to share with funders. In cases where the funder would be unwilling to fund an organization whose workings it couldn’t understand, this can provide transparency that would otherwise be impossible, and can be in the best interest of the grantee.
• What’s more unusual in EA:
  • The majority of funding for some EA organizations comes from a single funder (Open Philanthropy).
  • This means that the funder in some sense has a similar amount of power to the board even without having any members on the board; for example they could force leadership change by threatening to pull funding.
  • In some cases a large portion of their board is current or former staff at that funder (in the case of Effective Ventures US and UK).
• We think this funding monoculture is a more significant risk than whether a staff member from a funder is on the board of a grantee organization. Working to diversify funding sources could be very beneficial, though is beyond the scope of best board practices.
• We think neither grantees nor Open Philanthropy want to be in this position; everyone would prefer for there to be more funders in EA (though people and organizations have different bars for how low-risk or aligned they want those donors to be, especially after being burnt by FTX).

Other observations

A main bottleneck seems to be finding board members who are a good fit and who are willing to serve on the board. One common theme from our discussions is that organizations would like to find candidates outside the usual suspects, but people with fewer ties to the EA community are less likely to want to put in the time to be on the board of EA-community-focused organizations. 

We would favor a stronger norm that EA community members, especially those with more professional experience, consider board service as a way they can have an impact. One step would be for more community members to fill out a profile at EA Good Governance Project, or to get in touch with an organization they support to voice willingness to serve on the board at some point.

Organizations that support or fiscally sponsor many sub-projects, such as Charity Entrepreneurship, EV US, EV UK, and Rethink Priorities, have more complicated board needs. It’s harder to find standard advice about how to structure these boards. We think it’s good to really clarify responsibilities in these situations. For example: who has the authority and responsibility to fire the CEO/ED of a sub-project if they are underperforming? 

In the US it’s legal, but not common, to pay board members. (It is not allowed in the UK.) Rethink Priorities recently started trying this, with the hope that it makes it more feasible for busy people to spend a significant amount of time on board work. If your organization is considering this, you may want to talk to Rethink Priorities or other organizations that have tried this first. [Ozzie is in favor of more US organizations considering having paid board members.]

Advice collected from others

Responses from some staff with experience working with their organizations’ boards. "I" is the various staff members (different people for different items).

What infrastructure is helpful around a board? (e.g. types of staff capacity, practices around onboarding/offboarding board members)

• I’d guess it’s best that for many issues, employees who have their heads in things and more time to spend (relative to board members) do most of the groundwork and come to the board with proposals for things which they can work off / give feedback on before reaching their decision
  • Useful types of capacity to have from staff:
    • People leadership / stakeholder management
    • Finance / accounting
    • Communications
    • Strategy
    • Compliance / governance requirements
    • Legal 
    • Project management / generalism
• It is useful to have a board member or officer who knows how to run a board meeting (can set the agenda, write the minutes, ensure resolutions are done effectively, knows roughly what should be done through formal meeting v. unanimous written consent, etc.)
  • Or this can be done via a staff member who sits in
• Onboarding / offboarding: 
  • Having a written checklist of steps is helpful — this would likely vary significantly by org but probably includes things like “formal appointment steps”, “IT/systems/communication channels onboarding”, “context sharing and ramping up”, etc.
  • Using Slack or email groups make it easier to control access when people leave the board
    • Though be careful using them for any docs about board member recruitment which include talking about the incoming member, or documents addressing a topic from which any board members are recused

How much staff time is needed to coordinate the board?

• One organization with 40+ staff estimated this might take 20 hours a month from their staff
• Another organization of a similar size estimated this might be ~6 hours a month (not counting preparing the budget).
  • 20 hours per board meeting in putting together written materials and answering questions before the meeting
  • 10 hours to handle onboarding some new board members and offboarding some outgoing ones
  • 3 hours/year handling COI paperwork and other governance paperwork
  • 1 hour periodically for other updates
  • Formatting the budget to be understandable by the board — significant time but most of this would need to be done anyway

What would you advise boards facing a stressful period for the organization?

• Figure out decision rights for things ahead of time
  • This includes determining what level of thing should be given to the board for input / objection window / active approval vs just decided by leadership staff 
  • Establish a common understanding of what the board must do (governance requirements), should do (best practices), can do (optional value-adds), and shouldn’t do (things that leadership staff should do instead; governance restrictions)
• Figure out if you’re happy with your leadership staff / other important staff. If not, and if you expect to be in a stressful period for a long time, consider hiring.
• Having a board chair would probably be helpful, to avoid diffusion of responsibility. 
• Have someone in charge of project managing / prioritizing appropriately / chasing up on things / sharing materials in advance of meetings.
  • Could be a staff member or a chair of the board
• When you’re in firefighting mode, make sure to step back and figure out if various things coming up are actually urgent or important 
• For communications, consider identifying one (or a small number) primary author to write and sign off on behalf of the rest. Designing statements by committee where everyone has to be happy to have their name on it takes much longer and often results in a worse product
• Time
  • If scheduling is hard because there are lots of people / time zones, have a regular meeting slot which you can delete when there are no agenda items 
  • Be clear about expectations of response times / time commitment 
  • Establish communication norms (e.g. different channels for different things) 
  • Objection windows are often a good way of engaging with time-scarce boards, since they allow you to flag things which board members may want to weigh in on, but without requiring active buy-in on every issue

Resources from another organization

Two guides from another organization that asked not to be named:

• Duties of nonprofit board members (US)
• Organization due diligence checklist (US) to check what kind of shape the organization's processes are in before you decide whehter to join a board