Board Leadership Study 2020 Unveils Eight Factors to Improving Non-Profit Board Effectiveness

Centre for Non-Profit Leadership introduces the Effective Non-Profit Board Framework and PulseCheck 360 based on insights from the Board Leadership Study 2020

15 September 2020 — The Centre for Non-Profit Leadership (CNPL), part of the National Volunteer & Philanthropy Centre (NVPC), has released the findings of its landscape Board Leadership Study (BLS). Spanning two years, the study presents findings from a nationally-representative sample of Board Chairs, Executive Directors and Chief Executive Officers from 360 non-profit organisations (NPOs) across various sectors. It is also supplemented by in-depth qualitative interviews with some of these leaders in Singapore.

Value-based leadership is key

Having leaders with the right values and motivations directly impacts the effectiveness of NPO boards. Across various factors measured in the study, “Aligned values and motivations” came up as the strongest factor with 91 per cent of NPO leaders agreeing to this assessment of their Board.

Being aligned in values and motivations encompasses traits such as acting in the charities’ best interests and being passionate for the cause, reaffirming that a key factor for effective NPO boards lies in having leaders with the right ethos and the spirit to serve.

Stronger governance deepens trust

The BLS also found stronger governance and compliance among NPOs over the past four years, with a four-fold increase in the formalisation of board renewal plans between 2016 and 2020. With more NPOs disclosing board-related information on their annual reports compared to data from 2016, a 42 per cent jump is observed among NPOs disclosing the number of board meetings they hold, and a 38 per cent increase among those disclosing the attendance at board meetings. This progressive trend towards stronger governance and accountability would help to inspire public trust in the non-profit sector.

With the nation still reeling from the COVID-19 pandemic and on the brink of a recession, a well-governed charity sector is more important than ever as they uphold public trust in NPOs as they work to uplift various communities at risk.

Mrs Mildred Tan, Chairman, NVPC says “We are glad that this Board Leadership Study has allowed us the opportunity to hear directly from the NPOs on the areas that they feel boards can work on to be more effective. This robust research served as the building block in constructing the Effective Non-Profit Board Framework that we hope will result in boards being able to improve their effectiveness moving forward.”

Improvement needed for self-evaluation

A strong board is one that has its structures and processes in place and is keenly aware of its strengths and weaknesses. Three in five NPO boards have completed self-evaluation assessments on board performance, which signals the growing recognition of the importance of board self-evaluation among NPO leaders. 22 per cent identify it as the most important attribute relating to governance and compliance.

However, the study reveals a gap between perceived importance and performance, whereby the NPO leaders surveyed rate their conduct of self-evaluation to be one of the lowest among all other attributes – 70 per cent compared to the average of 81 per cent – contributing  to board effectiveness. This signals a pressing need for an accessible tool for NPOs to take stock of their own board health.

Engage stakeholders with clear communication

The COVID-19 crisis has made it necessary for NPOs to work creatively with their stakeholders as donors, volunteers and beneficiaries have had to grapple with greater limitations in this climate of uncertainty. Although NPO leaders recognise the importance of a stakeholder engagement plan in shaping the board’s strategic foresight, they rate their performance in this area to be lower relative to other factors. In fact, only 28 per cent of NPO leaders surveyed have formalised an external stakeholder engagement plan, suggesting an area for improvement.

The study also found a gap in the area of communication. Communicating clear goals to management is critical in achieving the organisational objectives; however only 26 per cent of NPO leaders consider it to be an important attribute. NPO leaders often find it challenging to implement and sustain clear communication due to the different perspectives of needs and the context of the issues from various parties, including the boards.

Ms Tan Li San, CEO, National Council of Social Service says “All organisations need to continually strengthen capabilities and capacity, and non-profit organisations are no exception. The Board Leadership Study is timely in helping NPO boards identify and address areas that board leaders themselves need to work on. This will enable them to steer their organisations towards excellence, so that NPOs will remain relevant and effective in navigating the challenges ahead.  The findings from the study will also guide MSF, NCSS and other stakeholders to support capability-building efforts in the charity sector.”

A collective effort to uplift the non-profit sector

The BLS study shows that while NPO boards are performing strongly in their values alignment and governance, there are opportunities to improve in self-evaluation, stakeholder engagement and strategic foresight.

Based on the BLS insights and in discussion with the Charities Unit, Tote Board and the National Council of Social Service, CNPL is introducing the Effective Non-Profit Board Framework to help NPOs evaluate themselves. This will be the first comprehensively researched framework in Singapore backed by a national study of NPO boards across various sectors.

The framework uncovers eight key factors that contribute towards an effective NPO board — ranging from Compliance to Alignment of Values and Motivations. It suggests that an effective board needs to look into its structure and processes, which are fundamental towards shaping a clear strategy and role, and finally results in healthy dynamics and culture for the board. 

“As a grantmaker who has been catalysing capability and capacity-building initiatives in the non-profit sector, Tote Board believes that effective board leadership serves as an important cornerstone to enable charities to navigate, adapt and thrive in these uncertain times. We hope that the insights generated in this Board Leadership Survey would continue to facilitate important strategic conversations both within and beyond the sector” said Mr Fong Yong Kian, Chief Executive, Tote Board.

Building stronger NPO boards with PulseCheck 360

To tackle the new challenges NPOs might face in future, CNPL will be launching the PulseCheck 360 later this year. Taking the BLS findings into account, the refreshed online self-evaluation platform offers NPOs tangible working recommendations to build stronger board and navigate through a more challenging future.

“With the evolving economy and changing social needs, NPOs play a crucial role in ensuring that no one is left behind. Therefore, the importance of strong board leadership and board assessments cannot be understated. Strong board leadership ensures that NPOs remain grounded in their purpose. It also assures the public that resources are well managed and high quality services are delivered to meet needs. A strong board is also needed to drive change by steering an NPO to embrace digitalisation and be more enterprising” said Dr Ang Hak Seng, Deputy Secretary, Ministry of Culture, Community & Youth.

For key findings from the Board Leadership Study 2020 and practical tips for non-profit leaders, visit cityofgood.sg/resources/handbook-for-effective-nonprofit-boards for the Handbook on Effective Non-Profit Boards.

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About Centre for Non-Profit Leadership (CNPL)

The Centre for Non-Profit Leadership aims to transform the non-profit sector by advocating planned leadership and nurturing leadership capability. Through its suite of evidence-based solutions, CNPL enables non-profits to exercise good governance and enhance leadership and board effectiveness.

Visit us at www.cnpl.org.sg.

About National Volunteer & Philanthropy Centre (NVPC)

The National Volunteer & Philanthropy Centre (NVPC) is the steward of the City of Good vision for Singapore, where individuals, organisations, and leaders come together to give their best for others. Through our brands, programmes, and initiatives, we facilitate partnerships with non-profits, organisations, public sector bodies, and individuals to enliven the giving ecosystem within Singapore.

We invite you to join us in building a #CityofGood together. Visit us at www.cityofgood.sg.