Ensuring effective and competent Boards in not-for-profit organisations

Case Study from the Further Education Sector

When the board of a Midlands based Further Education College was given an outstanding rating by Ofsted board members felt they needed to update and develop their strategy to take them beyond outstanding.

With a committed but mixed board of varying expertise the challenge was to ensure they had the collective competence and effectiveness to provide strong governance for the college as it moved ahead into uncharted territory.

With a large annual budget, an intensive capital spend project in hand to buy, sell and redevelop campus sites, coupled with changing student funding models exposed the organisation to financial risk. Concurrent with this change, the board was due for replacement of some senior members due to rotation. There was a need to identify the strengths and weaknesses of the board to inform the recruitment of new members and ensure the on-going governance and good stewardship of the organisation.

The solution was for the board to undertake a Board Evaluation Process (BEP) and a skills audit, to identify the range of competencies and skills across the board. These were modelled against generics for board members in not-for-profit organisations and reported on within the context of the organisations vision to go beyond their outstanding grade.

The BEP has been designed to be simple to use and is available online for fast analysis. The process requires each board member to report on each other member using a Likert Scale to indicate degrees of agreement for the subject individual against a competence statement. The output report provides data on each member against the average for the board, their self score and the Chairs score of them. The result is provided at an individual and Board level visually highlighting overall effectiveness as well as areas for development.

In this instance, having identified financial competence as a risk area, the Appointments Committee was able to recruit additional members with finance and accounting experience from local employers, thus also improving the stakeholder connection. In addition the BEP identified risk areas within the board, namely complacency in relation to  financial robustness and strategic direction setting. The Board was able to review its approach to strategy and the new financially aware appointees brought to the team improved effectiveness in managing financial risk.