I was recently asked by a friend of mine about the difference between an organization having a board of directors versus a board of trustees. He is trying to determine which model best helps him grow and refocus his small but successful organization. He wants to grow the organization by entering new markets, with new offerings, and broaden his territory. It got me thinking that nonprofits, especially newer ones, also run into this dilemma- which operational model is best?

Without going into a lot of detail, here are some of my friend’s questions and my responses. I’d be interested in your thoughts.

  1. Overall, what should the primary purpose of this board be? What should I be looking for these board members to do? Obviously I’d like them to help offer strategic direction, but I am wondering what else I should be asking for.

You can define the purpose of the group based on what you want from it (and are willing to give up or share) at this beginning stage of your firm’s life cycle. Later, you can change it to something else. Don’t feel you are locking yourself into one model to the exclusion of the other. I would think you’d want to get the following services  and help from a board…regardless of type or size:

    1. A level of accountability to them
    2. Strategic thinking
    3. Some knowledge of your market, or the “space” you wish to play in (subject matter experts to complement your knowledge)
    4. Entrepreneurial thinking and can-do thinking
    5. Financial acumen
    6. People with valuable connections  right where you need them
    7. One or 2 people who successfully founded and established their own start-ups
    8. People who are not afraid to ask good questions and give you “straight talk” (wrapped in kindness would be helpful).

Because you are incorporated, you already have a board of directors, at least in name, as required under Illinois law. Since this is more of an administrative board, creating a real board implies a heightened sense of accountability on your part to it.

You would continue to have some formality (and costs) to the proceedings, and you would have to continue following certain Illinois State requirements…meeting minutes, annual election of officers, etc, all the normal red tape most states require. Presumably you are already doing most of this.

An advisory board could be much more informal and less structured in its operations and would just be there to help brainstorm, mentor, serve as a sounding board for you, serve as an accountability partner, etc. However, advisors usually have no skin in the game or legal responsibility so you may not get the kind of time commitment or effort commitment from them you want…like, attendance at your meetings, maintaining a serious level of discourse, commitment, and participation. Their commitment to helping you succeed would probably be less than that of a director since they are merely advise-givers. Also, you may not get the very best people if it only is an advisory board.

Board composition and advisory composition can be fluid things. For now, you want to surround yourself with people who can most help you get to that first level-which needs to be tightly defined-and who share a passion or at least a true interest, in seeing you succeed.  Then, with term limits, you can re-invite some to stay on and replace others with those who have the skills you will need you get from that level to the next one.

Again, those skill sets you need to surround yourself with today would include: networking/people with helpful contacts, strategic thinking, knowledge of your business arena, and people you will agree to some level of accountability, and a willingness to share sensitive material.

Without some kind of accountability piece, the meetings could turn into feel-good, waste of time meetings w/o any real progress. I like your idea of entrepreneurs serving…rather than large company people (unless they have a desirable skill set to share).

Finally, although it is extremely healthy to have a broad spread of skills represented on the team, you want to be sure they share the same values you have.


Well, ,that’s point number 1 of seven. I’ll send out the rest in Part 2 next week but for now, I’d like to hear from you…Feel free to share your thoughts on this.