Q. "Can my board take action via email or conference call?" -- Anonymous, May, 2008

A. We weren’t entirely clear on the answer to this question, so we asked our attorney, Gene Takagi, author and publisher of The Nonprofit Law Blog.  Here is his response: “A board action may be taken at a duly held meeting or by unanimous written consent.  California law does not expressly authorize a vote by email (this may not be true of other jurisdictions).  Meetings (including by conference call and possibly by chat room) allow members to communicate with all other members concurrently.  Simple email votes do not allow for such discussion.  Another issue with email is the inability (for the most part) to verify that it is the director sending the email rather than someone acting by proxy or an unauthorized user.

Nevertheless, email may be a valuable tool for boards.  You can take a poll by email on proposed actions before putting them to an actual vote or deciding to take them by unanimous written consent.  If, for example, you learn that all directors favor the same decision, the Secretary may draft an action by unanimous written consent and send it (possibly by email) to all the directors.  Each director may then sign the unanimous written consent and fax it (or email a scanned, signed consent) back to the Secretary.  Once the Secretary has a signed consent from each director, the action has been taken.  The Secretary should maintain each signed consent (typically one for each director) with the minutes of the corporation.”  -- Gene Takagi

Q. Is there a "best practice" for a manager/employee ratio for a social service nonprofit organization or does it "just depend?" -- G, March 25, 2008

A. Liz: The answer is always "it depends," and in this case, the answer depends on what you're really asking. Generally, from a management perspective, having 5-7 direct reports is considered optimum. Any more than 7 and it gets tough to be an accessible manager and to provide appropriate oversight. Of course, that assumes that you're operating in an organization that is vertically integrated. If you're in a team-based or matrix environment, you probably don't want more than 2-4 teams reporting to you in addition to your 3-4 individual direct reports. I think those ratios hold no matter what kind of service you provide.

If, however, you're asking whether there's an optimum manager/employee ratio from a budgeting or service delivery perspective, that's a different question. I've always believed that a "form follows function" approach to organizational structure makes the most sense. That means that before undertaking a major structural overhaul, you first understand your business processes and what's driving them. For example, how do clients move through your organization from intake to discharge? Are the processes driven by client needs or by staff needs? Is the client's experience of your organization seamless or are they handed off from department to department with new intake at every transition? Are there parts of the process that serve staff's need to control or be in the know, but that really don't add value? Once you've cleaned up your processes, then you can look at what kind of staffing structure supports those efficient and effective new processes.

One last caveat: we have a tendency in this sector to promote people to management positions as ways to reward them. Nothing wreaks havoc more with an organization's structure than one that's been Gerry rigged to accommodate long-term, loyal employees who are really uber-specialists, not managers.  What's the difference? If your staff person is primarily engaged in carrying out specific tasks, rather than in planning and managing departmental resources, chances are he's on a specialist, not a management, track. NB: Specialists can be exempt and  highly compensated, so there's no need for people to resist the idea of moving from management to specialist within an organization.  I hope that helps.

Leyna: Not surprisingly, I agree with everything Liz has said here. My own observations from years spent as a human resources executive is that 5 is a good general maximum for direct reports, and 7 would be the upper limit, as Liz said. And, of course, exceptions abound.

I want to strongly second Liz's point about rewarding staff members with the "manager" title. (I once worked for a business that literally had the "real" Vice Presidents and the "faux" Vice Presidents -- not a highly functional place.) One more point: Having the title "manager" does not automatically render your job exempt. If you have no direct reports, little discretionary decision-making, and your job is primarily task-based, you are non-exempt, no matter what your title. For more information about exempt positions, visit this website.

Q."I’m the executive director of a small agency that had no revenue last year. Do I still need to file anything with the State of California or the IRS?"-- Anonymous, December 12, 2007  
 
A. Liz: Yes. You must file Form RRF-1 with the Registry of Charitable Trusts in the California Attorney General’s Office. That form must be filed annually within four months and 15 days of the end of your fiscal year.  You must also file a Statement of Information with the Secretary of State (Form S1-100). That’s a biennial filing, so check your records to see if one is due this year. And, thanks to the Pension Protection Act of 2006, all 501(c)(3) organizations with less than $25,000 in gross receipts must make annual electronic notice filings with the IRS. Those filings are short forms that provide identifying information. Any organization that fails to file that report for three consecutive years after 2006 will have its tax exemption automatically revoked. Final note: be prepared to fork over a little money with each of those filings.

Q. "My board has never had term limits, and many of our directors are resistant to the idea.  Are term limits always a good idea?"-- Anonymous

A. Leyna: I’m a big believer in term limits. In fact, I’m a bit of a term limit fanatic. While I can think of a dozen reasons to implement term limits for your board, here are my top three: First, new board members bring fresh ideas, new perspectives and the ability to ask an essential question for any board: Why? Second, after serving for 5 or 6 years, a board member has most likely exhausted their list of potential friends, donors and advocates. New board members bring new connections and networks. Third (but not last), term limits provide an exit through which inactive, difficult or mismatched board members can be gently escorted. Hooray for term limits!

Liz: I couldn’t agree more with Leyna. Term limits are an executive director’s and a board’s best friend. So what do you do about a board that is resistant to the idea? Well, you can start by gathering all the data that says term limits are a best practice, and there’s plenty of that available. (Check out BoardSource for more information.) Chances are, not every member of your board believes that term limits are a bad idea. Some, if not most, probably support the idea and will feel validated when they see it’s a best practice. On the other hand, data won’t break through resistance which has at its core a tangle of emotions that don’t speak data. Assuming that your board chair is not one of the resistant ones, the task of facilitating the board discussion falls to her. That’s the good news.

Personally, I would start the conversation by naming what’s going on: “This board currently has a policy of no term limits. That policy is not considered a best practice, and more importantly, it really isn’t serving our organization. But before we even get into a discussion about changing the bylaws, I’m aware that there is some resistance on this board to the idea of term limits. I’d like to surface just what that resistance is about.”

It is really critical that the board chair “hold a space” for the discussion that is respectful of the feelings underlying the resistance, while at the same time being intentional about not being held captive. (I use a flip chart to record what emerges. It helps visual processors and makes what is said more concrete.) Most of the feelings will be fear-based, such as "we won’t be able to attract new board members," or "we work well together so why change?" or motivated by self interest: "this board is my life." The key to dealing with the fear-based concerns is to remember that they are perspectives, not truth. For example, another perspective might be that we will be able to attract new board members and, in fact, we will probably get quite good at it eventually since it is going to be an ongoing process. Self-interest is a little trickier. Some organizations have advisory boards on which they place their emeritus board members – visibility without clout. Others encourage the board members to stay involved as volunteers. You and your board chair probably know which board member is protecting herself by fighting term limits. You may want to figure out how to have a private conversation to allow the feelings to surface in a safe space. Finally, realize that you don’t have to have all the answers. Ask the board member how she would like to serve the organization once she is off the board and then be prepared to negotiate a little so that she doesn’t continue to hold you captive.
 
And if the board chair is part of the resistance, you’ll probably just have to wait to tackle the issue until he steps down... or moves to Arizona.