Governance Selection 2

There are two well-known family-run chocolate companies in Atlantic Canada. One is Ganongs in St. Stephen, New Brunswick, established in 1873. It served as the metaphor for my first “governance selection” piece published here in July 2020. The other, Peace by Chocolate, in Antigonish, Nova Scotia, was established by a Syrian refugee family in 2016. Here, it introduces a few more bite-sized tips.

The first confection I have chosen to focus on here is board minutes. Hardly a sweet of interest to most. I have fielded a lot of questions on this topic and much to my surprise new ones, new to me anyway, still appear. I have divided my responses here into four pieces. One is about minutes being signed, another with the phenomena of “draft” minutes, a third on the question of when minutes should be approved, and lastly, how long should board minutes be kept? Most readers will know the answer to this one.

The second item in the box looks at matter a board’s own document files. Is it easy for you to find past meeting minutes, lists of recruitment prospects, or signed confidentiality forms? My guess is that few non-profits have a well-considered organizational scheme. There is probably not a best one, but perhaps my suggestions can spark a conversation.

The third treat, and the most filling, involves the board meeting package, the reports directors are sent in the hope that they will come well prepared.  I will outline the “usual” board homework and then offer a thought-provoking alternative, to be employed some of time.

The Peace by Chocolate story is a heartening one. It is about the Hadhad family who once owned a chocolate factory in Damascus but were forced out of the country by war. They came to Canada and set up shop in a small town east of me. They now employ over 30 people and distribute their products in their two retail outlets and through some major grocery chains. The chocolate is made into a number of goodies. These include bars with names like “Right Some Good” “Fill-Yer Boots” and “Who’s Yer Fadder”, as well as ones with wrappers in Arabic and Mi’kmaw. You can read their story here. There is also an award-winning documentary about them on Apple TV.

Board Minutes Assortment

I have written a lot on the role of the board secretary and on board minutes. See my piece Board Secretary: Superpowers Revealed or my sample Board Minutes Policy. But, as I said, there is more to this territory than I would have imagined.

1. Should the minutes be signed?

However, another opinion, found online, from a Canadian lawyer, says “it is good practice to have minutes signed by the chair and secretary” Then it goes on to suggest that, “While signing the minutes strengthens the evidence, failure to sign minutes does not invalidate them”. ((Hartley Nathan, Q,C, Minutes and Notes of Board Meetings, MinderGross LLP))

It is widely assumed that board minutes must be signed in order for them to be a legal or official record of a board meeting.  The majority view, to the extent that internet sources can be regarded as a reliable source of advice, is that they “ought to be”.  In other words, it is “accepted practice” that board minutes, once approved at a subsequent meeting of the board, ought to then be signed by the board chair, or the secretary, or both. ((One source attributes the practice of minutes being signed to Roberts Rules, Newly Revised¹))

If your board practice has been to add a signature to the minutes once approved, and this is your routine, likely to involve an electronic signature, then stick with it.  Consistency has value here. If this is not your practice, you need not adopt it.

If you want to change your practice, in my opinion, a clear board decision on the matter is probably wise. It should be minuted. My board minutes policy, which I will refer to again below, has in it a statement to the effect: “There will be no requirement that the minutes, once approved, be signed by the Chair or Secretary”. If your practice is one of signed minutes, your minutes policy might well say, “there will be such a requirement”. 

2. The strange case of “draft” minutes

In investigating the subject just above I came across a source that suggested that having the meeting minutes signed ensures that there is a copy that “does not get confused with other versions”. What other versions, I have to ask? Surely, there are no “draft” minutes floating around. Why would there need to be more than one?

To my way of thinking, the secretary takes the minutes of a meeting, puts the document in the board meeting minutes file. The minutes are later attached to the notice and agenda of the following meeting where they are approved with or without changes. Any changes, together with the approval, are recorded in the more recent meeting minutes. There is no reason to go back to correct the previous ones. One version of the minutes. End of story.

The upshot of this approach of course is that if one wants to look at the “approved minutes” of a particular meeting, the minutes of two meetings are really required.

This one version approach works best when a board has a board minutes policy and/or a template it follows. It works too when the secretary is active in occasionally asking for clarification on what ought to be recorded.

The idea of someone taking minutes and then having the chair review and possibly edit them before sending a new version out prior to the next meeting is not time well spent.  Of course, having the board chair look at the minutes may be of value when the secretary is new, has not been instructed on the format and does not receive or ask for direction at a particular board meeting.

Again, having a Board Minutes and perhaps even an In Camera or Executive Session policy that speaks to the minutes are easy measures. Both can be found on this site here.

3. When to approve the board minutes?

Must the minutes of the previous meeting be approved at the next regular board meeting? The answer is that while there is a legal requirement that board minutes be approved, it could be done at another meeting.

Obviously, the following meeting is the best time to do it because memories are the freshest. Also, board members not present at the board meeting that was minuted may have a question or two not answered by the minutes that could be addressed under this agenda item. Normally though, approval of the minutes is a routine item, often part of one’s “consent agenda”.

Might there be a reason for taking a pass on the approval of the minutes of the previous meeting? Perhaps the minutes are not ready.  A better reason though is that the board wants the upcoming meeting to be different. Always bowing to the usual routine, even for a normally easy and quick agenda item, may not be what you want to do.  So, you do not have to.

4. How long should minutes be kept?

The generally accepted view is that board minutes should be retained in perpetuity. ((Most sources indicate that all an organization’s board meeting and member meetings minutes must be kept. According to the site Nonprofit Law Ontario, the 2021 Ontario Not-for-Profit Corporations Act (ONCA) suggests that even committee minutes must be kept. This seems like overreach)) Auditors expect and will often look back through several years of minutes. So, having a dedicated board meeting minutes file makes a lot of sense. Read on.

Board Documents “Legend”

A fancy variety box of chocolates usually comes with a “legend” or map of where different pieces are and what they look like. Do you have one for your board files?

I would guess that few boards have thought much about it and many Executive Directors, often responsible for their non-profit’s filing system, have not been given much direction, or asked for it, regarding the organization of their board’s files.

Paying attention here can save time if someone is looking for a particular board meeting item or when one is sharing information in the process of onboarding new directors. Locating a policy approved a year ago can frequently be a challenge. As just mentioned, auditors will typically request copies of the board minutes, at least for the year being reviewed, to ensure that that decisions regarding contracts, the use of reserve funds or particularly large expenditures have been approved. Board minutes are considered “corroborating documents.”

There are not many sources of advice on the organization of a non-profit’s files generally. One I like is Christie Saas’s November 2022 post Filing System Basics for Non-Profits. There is also lots of available online advice on a board’s “must have documents” and on electronic board portals.

Your board may have its own well-considered document filing scheme. Bravo, if you do.

The design of your board document directory, I think, ought to provide a wholistic glimpse of the board’s work. Here is my legend:

1. Incorporation documents (including bylaws and charity filing forms )
2. Board policies
3. Current board members (contact list)
4. Board meeting minutes (all years)
5. Current year – meeting agendas, board reports, committee reports
6. Annual General Meeting ( AGM minutes, annual report)
7. Board Members – recruitment prospect list, resumes, signed agreements
8. Board Orientation & Self Evaluation – outline, presentation slides, questionnaire, evaluation report
9. Executive Director/CEO
10. Strategic Planning (previous plan, current plan, constituent and community consultation questionnaire)

I will say a bit about some of these.

First, keep in mind that where electronic documents are concerned it is hard to avoid clutter and way too easy to save old docments because they “might” be referred to in the future. A moderate amount of document ruthlessness may be of some value.

I am not sure where one would put vision, mission and values related documents. They are foundational pieces and may deserve their own file.

Board policies deserve a separate file. This is important because they should be reviewed regularly, although not all every year. Each policy should have its latest approval date indicated.((The board I am on has a PDF version of each approved policy and, in a separate file, a single MS Word Version of each) I encourage boards and Executive Directors to distinguish between high level policies that require board approval, and more operational level ones that do not. There may be a separate set of online files for internal, staff accessible policies and procedures. My Governance Policy Checklist can be found here))

Readers may wonder about where a ‘board manual’, a single document containing a variety of key  materials might reside? I am not sure. There is more material in the file list above than would be included in a usable guide for new directors. Perhaps I will receive some suggestions in the comments. ((A board manual involves a lot of work. Some non-profits will contract out the work of creating one to a consultant. On the subject of board manuals see this resource from Board Source. My own guide “Creating a Board Manual” seems outdated given the increasing reliance on electronic documents))

The Board meeting minutes file should only contain board meeting minutes, organized by year. If the board decides to append a document to the minutes of a particular meeting it would be here too. The approved annual budget might be one of these.

I would suggest that the current year board file folder, contain only one year of documents but no minutes. Agendas, committee reports, Executive Director reports and monthly financial statements to the board would be here but they probably need not be retained longer than this.  

I could also imagine a board having a file for the executive director (employment contract, position description, resume, evaluation template). Here it is important to recognize the confidentiality of some ED employment-related documents. ED evaluation reports probably belong here. The ED and the board should agree what is in this file and who has access to it.

The Executive Director may want to have a file of their own for their own board reports, maybe going back a couple of years. There would be an ED report template in here as well. The most recent report would be copied to the board’s Current Year file.

I am not of the opinion that monthly or quarterly financial reports, especially if they are detailed speadsheets, need to be kept in any of the board’s files. Special reports such as financial health and compliance checklists could be put in the Current Year file if not attached to meeting minutes.

It is likely that some documents relevant to governance work may be, and should be, duplicated in other organizational directories. The executive director will want to pay attention to the management of these files and to the backing up of the most important ones.

Remember, the above is my organizational scheme. It may not be yours but have one that is equally considered.

Board Homework Cluster

Board members often receive a set of documents to help them prepare for their meetings.  It might be an email with attachments or an email with a link to a file accessed through organization’s board portal.

Many believe that preparation, board homework if you like, makes for better board meetings and greater director engagement. Unfortunately for some non-profits there is a large gap between this promise and the reality.

I would like here to look at the board meeting package, its typical design and offer some possible variations one could experiment with.

1. The Typical Package

The board package is normally put together by the executive director, or by the executive director and the board chair. The assumed, but rarely followed protocol, is that that it is sent out by the secretary. More often it is the ED. That package is comprised of the:

• Board meeting agenda
• Minutes of the previous board meeting
• Financial report
• Executive director’s report

Occasionally the board package will include a committee report or a policy that requires board approval.

BoardPro, a New Zealand firm that supports governance practice with technology, has a 2022 online publication, The Problem With Board Meeting Packs. The first part, “why the usual board packet usually falls short”, deserves to be read. The author, Sean McDonald, make a good case that:

• Board meeting packs are too big
• Much of their content lacks relevance
• Too much board reporting is backward looking
• There is too much data and too little information
• The purpose of reports is not clear
• Reports are poorly written and presented

One concern it raises is that there is no counter to an incentive to keep the board fully informed. This can result in the provision of too much operational information. I have not come across myself board meeting packs are “too big”. I would say though, that few distinguish between “FYI information” items from those on the board meeting agenda.

A second point is that the boardroom ought to be an important space for influencing the future of the non-profit. Too many meeting documents, either sent or provided, are “backward facing” not “forward facing” in their orientation. A board cannot do anything with what has already happened. Forward facing work at board meetings includes ideas for improvements in strategic goals and indicators, reports on board recruitment, and new and improved policies that help raise standards not just clarify existing ones.

The third insight is that the areas of governance that are captured in board meeting documents are usually those that are tied to the responsibility delegated to the Executive Director. The board’s own work: recruitment, reviewing bylaws, planning the AGM, board self-evaluation often suffer from inattention.

So, how can the board homework package be improved?

• Better meeting planning
• Varying board meeting agendas
• Identification of priority items
• Include a new policy or program proposal

I have written about the first two of these improvements.  The post Old Business – New Business from January 2022 looks some of the typical agenda items like the financial report and the Executive Director’s report and considers other ways of handling them. My board calendar resource, an agenda planning tool, is described in the September 2023 piece Five Governance Hacks.

2. An Alternative

If you want to get your board’s attention and cultivate board room engagement then consider including in your board package, occasionally, a provocative article along with a couple of discussion questions. Here I am suggesting a document that is not internally generated and one that could be a selection from your (maybe imaginary) “what our non-profit is reading these days” list.

I am a fan of non-profit boards fully suspending their business meeting format one or two meetings a year.  I am not suggesting this here. Including an article in your board package and carving out 30-45 minutes for it at a regular meeting is a step many can take.

My idea here involves choosing a piece that helps transport the board out into the community and tasks them to grapple with one or more sector trends and issues. My April 2019 post Repurposed Meetings and September 2018 post, Governance as a Bus might help explain this more. The trend or issue selected does not need to be geared to non-profit governing boards. Indeed, any reading that is relevant to one’s organizational mission or goals, and relevant to staff and clients as well, would work. A staff meeting discussion could well mirror the board room discussion.

An article in the board package needs to be accompanied by a couple of questions. For example:

1. What are two things from this piece that stand out for you?
2. How is its message or perspective relevant to the future of our organization?

Consider sending out a meeting agenda that bolds the discussion item and provides the questions. Having questions is important as it enables the chair to go around the group and hear from everyone. Maybe not everyone has read the piece. That’s OK.

I am not sure that the choice of the article is all that important.  The executive director might have an article in mind that could fill the bill but a call out to staff or even to the board at an earlier meeting, could identify a candidate piece.

I have had some experience with seeing this idea in practice. It is not about solving a particular problem or making a decision. It may not even result in an “ah ha” moment for the board. This is about seeing the horizon and providing an expansive context for the work of one’s organization. Board meetings seldom do this, but they can.

Some Final Pieces

I started this post over a year ago. Seldom do I work on just one at a time. I have more than a half dozen is in different stages of drafting. Usually with a number of weeks in between writing and all the other things in my life, I often return to a piece with fresh eyes. Consistently though, many are about letting go of routine governing practices and making space for new, more meaningful, ones. The pieces here are a result of the interplay of questions I receive and my own experience on a board that is actively experimenting with, and discovering where, it can best add value.

Much has changed in the world that has unfolded over the last 12-18 months. One cannot help but worry a lot.  Visiting the website of the company whose name and story leads off the post I took notice of their slogan, “One Peace Can’t Hurt”

Note: Thanks to S.P at the agency representing Peace for Chocolate for permission to use the image that introduces this post. 

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