Dani Robbins

Posts Tagged ‘roberts rules of order’

Compliance is not Governance: Financial Statements and Parliamentary Procedure

In Leadership, Non Profit Boards on November 4, 2014 at 11:37 am

As a blogger and a regular poster on Linked In and Twitter, it feels as if I’m putting ideas out there yet I’m never really sure if and where they connect to actual people in real agencies trying to better their communities.

Imagine my delight when I received a note that said: “Hi. I work for an association management company. I’m trying to settle a question here in our office. In a blog post about non-profit management you state that all monthly financials reports should be approved with a board vote. What is your basis for this statement? What are your thoughts on the following article – Approving the Treasurers Report Is Not Advised? Thank you for your time.”

Not only was I excited that someone was actually reading my stuff, but that I was being invited to defend my position. Sweet! I was appreciably less excited that doing so put me in the position of challenging an article written by a Parliamentarian.

I encourage you to read the article and come to your own conclusions. My take of it is that the author believes it is misguided for boards to approve financial statements monthly and a larger liability than to not, since the statements have not been independently verified. As such, until they have been independently verified she is recommending they not be approved by the full board.

Now, my goal is not to argue with a parliamentarian, which I clearly am not and which the author clearly is.  My goal is to demonstrate that good parliamentary process does not necessarily lead to good governance.

Robert’s Rules states the “Chair may ask for a Treasurer’s report to be presented” yet no vote be taken. Compliance with Robert’s Rules is not the goal of most boards. Good stewardship is the goal.

I recommend boards approve unaudited financial statements at every board meeting. It is my belief that everyone is quite clear the statements they are approving are unaudited. Boards also annually – if they have an annual audit and many agencies do – approve the actual independent audit.

The author states “I know of no federal, state, local or parliamentary rule that states the treasurer’s report is to be adopted.” Me neither. Yet rules and laws regarding board approval of statements would not be where the train goes off the track. Theft, misappropriation of funds and co-mingling are where the train goes off the track and where the board reviewing and approving fund expenditures might be the first step in ensuring against such eventualities.

Robert’s Rules is a parliamentary process by which to run a meeting, not an agency. In fact, Roberts Rules of Order newly revised in brief specifically defines parliamentary authority as “the book of rules the group names to govern its meeting procedures.” It is not and has never been intended to be a process by which to govern an organization. Compliance is not governance. For more information on governance, I encourage you to read  Generative Governance and The Role of the Board.

Being an engaged board member requires being a good steward of both the organization and the community’s resources including acting, along with other members, as the fiduciary responsible agent. That responsibility cannot be handed off to a Treasurer and you wouldn’t want it to be.

The author states “The treasurer is an office in which a group places a great deal of trust and therefore it seems that an assembly would believe their reports are accurate.” To that, I respond with a resounding “maybe”.

There are as many people serving as treasurers in nonprofits in this country who have no financial training or education as there are those that do. It would be irresponsible and naive to think the community and the law will not hold the entire board accountable in the case of financial mismanagement. That is why I recommend financial statements be reviewed at every meeting, and also that board members ask questions until they understand and are willing to have their name listed as approving of their contents.

Even in the case when you have a trained CPA as your treasurer, that CPA is not usually the CPA of record and even if they are,  the entire board is still responsible and will still be held accountable.

Being in compliance with Robert’s Rules of Order will not shield board members from collectively running their organization into the ground or from being held individually liable or criminally negligent, and that’s not what it’s designed to do anyway. An audit is critical, but it’s often conducted well after a problem has occurred and an issue can be corrected.

Not approving the financial statement will not protect you. Following Robert’s Rules of Order will not protect you. Paying attention, appropriately stewarding your organization and upholding your responsibilities might.

What’s your position on boards approving unaudited financial statements? As always, I welcome your insight, feedback and experience. Please share your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.

Board Meetings Gone Wrong

In Leadership, Non Profit Boards on August 16, 2013 at 6:34 am

Boards meetings can quickly go from productive to destructive in any number of ways.  Here’s a few:

The morning after is too late

I cannot tell you the number of times in my career that a Board member has called me the morning after a board meeting appalled by something the Board voted to approve the night before, at a meeting they themselves attended.  I can absolutely tell you the number of times those very same Board members have voiced their objections in the room: zero!

The next morning is too late.  If you do not like the motion that is on the table, it is not only your right to object out loud and on the record, it’s your obligation.

Sometimes individual Board members come up with wacky (read: dangerous) ideas.  When those ideas become motions that get seconded is when they go from wacky to possible.  Motions that have no second die, and so do the ideas that spawned them.

Motions that are seconded prompt the chair to call for a discussion and a vote.  If you are uncomfortable with the motion that is on the table, I implore you to speak.  Silence is acquiesce.  It is usually too late (and much harder) to address something after a vote has been concluded.

When you don’t know where you’re going any road will get you there.

No written agenda or an agenda that isn’t followed practically guarantees a long, meandering meeting that will only serve to frustrate those in the room, but won’t accomplish much beyond that.  It’s also likely that such a meeting will not produce formal votes or minutes that capture the work the Board has accomplished – or not as the case is (more) likely to be.

No Strategic Plan works the same way.  In the absence of a plan, you will have a lot of people working on a lot of things that may or may not align because the Board has not articulated and voted upon a formal direction.

If everyone’s in charge, no one’s in charge.

Boards elect Chairs to be in charge (of the Board). It’s awkward and feels weird the first time you chair a meeting, but the weirdness will pass when you begin to lead.  However, not leading guarantees the weirdness moves in and sets up shop.

It’s the forth Tuesday at 4; let’s meet!

Don’t have a Board meeting if you have nothing to talk about.  If there are no committee reports to give and no business for the Board to address, cancel the meeting.

At the end of the day, there’s no accounting for crazy

The easiest way to avoid crazy in the board room is to not let crazy on the board.  A Board Development plan and a formal process to elect board members will weed out inappropriate board prospects, before they become inappropriate board members.

Time of Death: 2 hours after we started talking about this

Discussion that seems to be spiraling can be stopped by two of my favorite phrases:

1. “Let’s call the question” which in Board speak means enough talking, let’s vote.

2. “Let’s send this back to committee.”  This phrase, when used by the chair, is a declarative statement that the board meeting has devolved into a committee meeting.  When used by anyone other than the chair, it is a prompt to the chair that the discussion has gone on too long.  In either case, there should be a vote, reflected in minutes, that the motion was tabled pending the committee’s review and consideration of the issues raised.

What’s the Executive Director’s role?

Good Execs do their homework before the meeting and usually know how people are going to vote before the meeting begins……which doesn’t ensure they will do so.

If a meeting goes off track, Execs can:

  • stall by whispering the potential negative impact to the Chair and hoping they agree;
  • offer to get more information and bring it back to the board at a future meeting; or
  • recommend the motion be sent back to committee prior to being voted upon.

If you have to, you can object out loud and on the record but be aware that doing so may spend significant political capitalIt also may not help, which does not mean you should not do it.

As mentioned in Hiring, Supporting and Evaluating the Executive, “worrying about keeping your job precludes you from doing your job. You have to do what you believe is best, based on your experience, information and training, within the boundaries of your role and the law. We all know that any day could be the day you quit or get fired. That can’t stop you from leading.”

What’s been your experience?  Have you seen Board meetings go off track?  What has gotten them back on track?  As always, I welcome your insight and experience.

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