Info You Can Use: Board Members Can Be Personally Responsible For Gross Inaction

by:

Joe Patti

Responsible governance by non profit boards is becoming an increasingly important and discussed topic. Non-Profit Law blog recently pointed out a court decision that emphasizes the need for boards to take their oversight duties seriously.

The following should especially be of interest: (my emphasis)

…that governing boards of not-for-profits who have actual knowledge of mismanagement by the officers of the corporation and choose to ignore it and/or not take appropriate action, can be held financially liable for breach of their fiduciary duty of care. The decision carries special weight because it turns on its head the long-held assumption that nonprofit directors are insulated from financial exposure, barring personal involvement in corruption, venality or fraud. This should be a wake-up call to nonprofits about the very real perils of inattention or inaction.

This case is related to the board overseeing a not-for-profit retirement home where the board’s inattention was particularly egregious. Board meetings were poorly attended, there was no treasurer, no finance committee as required by bylaws and the board was aware that the chief financial officer wasn’t maintaining records properly.

It is the fact the board was aware of the mismanagement at the retirement home, (I haven’t listed even 1/4 of it), and allowed much of it to continue, exposed them to liability.

Many states have laws similar to that of Pennsylvania where this case occurred, which says a board member is:

“…entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data” prepared by employees or experts. However, “[a] Director shall not be considered to be acting in good faith if he[/she] has knowledge concerning the matter in question that would cause his[/her] reliance to be unwarranted.”

If a board member has based her decisions information and advice she has every reason to believe is accurate and dependable, then she is more greatly insulated from personal liability should mismanagement and impropriety be surreptitiously running rampant.

Most people need not fear joining a non-profit board of directors, even for an organization that appears to be struggling financially, if they are diligently monitoring the situation and taking steps to rectify it. (And making sure such actions are being properly recorded in the meeting minutes.)

As I have noted in the past, if you do find yourself on the board of a failing non-profit, even though it may occupy an inordinate amount of time and energy, it much better to stick it out until the bitter end than to potentially expose yourself to greater liability by quitting.

Be Careful What You Bring To Your Data

by:

Joe Patti

I heard about this crazy theory that there is a correlation between parking and a country’s productivity.

An international business professor did some research and apparently, Americans tend to back into public parking spaces more often, selfishly blocking the flow of traffic around businesses while they continually reposition their vehicles so that they can experience the gratification of immediately pulling out when they are ready to leave.

Chinese pull in forward more often so they reduce their impact on the flow of traffic and will patiently yield to approaching vehicles when it comes time to back out and leave.

This is why China is more productive than the United States. They are more attuned to how their actions contribute to the good of the whole of society.

Oh wait a minute, that isn’t what the research says at all.

Actually, it says Chinese back into spots more frequently than Americans, showing their propensity for delaying gratification and that is why they are more productive. They are more willing than Americans to forgo comfort now for prosperity later.

You can read a quick recap of the research on this NPR story about it.

When I first heard about this research, I thought it was a bunch of baloney and sounded like confirmation basis. Backing in to a spot as a manifestation of delayed gratification supports the narrative of Chinese as patient just like it supports the narrative of Americans being selfish in my fake survey results.

Did you find it easy to believe my fake example by the way?

I don’t necessarily care overly much about parking and productivity. I just thought this was a good illustration of how our biases can shape our perceptions of data. When we survey our community and look at the results, we often make conclusions about what has lead to those answers based on what we think we know. In addition, the choices we made while collecting the data might have pre-biased the results toward our existing assumptions.

It is only when you don’t believe the results that you take the time to scrutinize them closer and see if there are any problems. If you agree with the findings, you aren’t motivated to do so.

The author of the parking study presents some numbers that show a correlation between parking style and productivity so there may be some evidence in support of his hypothesis. But I wouldn’t know that if I hadn’t been inclined to think that the way you park your car was the product of a wide variety of factors and not a manifestation of delayed gratification.

It can be difficult to do, but when you review data about your organization, be it surveys, ticket sales, attendance, etc., it can be good to occasionally step back and wonder, is this what the data really says or what I want it to say?

Shirtless Men As Institutional Marketing

by:

Joe Patti

Oklahoma City Ballet Executive Director Shane Jewell wrote a piece recently on the Clyde Fitch Report discussing the ways in which his organization has used performance and institutional marketing to promote itself.

In discussing the familiar practice of performance marketing, Jewell goes to some length to distinguish the video they did for their production of Cinderella as a trailer rather than a commercial. What might be confusing is that in the next sentence he states the commercial won Gold at the Oklahoma City ADDY Awards.

After re-reading the post, I assume he wants to emphasize that they didn’t view it as a commercial because it diverged from the expected pattern of

“…live-performance footage with voiceover and text. This is possibly a company’s biggest waste of time and money. The only people who would enjoy this type of commercial are those who are already fans of ballet, and more than likely they do not need a commercial to alert them of upcoming performances… The goal of performance marketing is to attract new audiences.”

My initial concern was whether the trailer might set up unrealistic expectation in people who were not familiar with ballet. (Though on the other hand, we pretty much expect trailers won’t be completely accurate representations of movies so it probably isn’t a big problem.)

What I really want to focus on though is the ballet’s handling of less frequently used institutional marketing–essentially the effort of demonstrating that your organization is a part of the community rather than apart from the community.

Noting that their community is very athletically oriented, the ballet created a print ad using their dancers to depict the fierce cross state rivalry between Oklahoma State University and University of Oklahoma. (You can see the ad in Jewell’s post.)

They also created a video emphasizing the athleticism of their dancers which they ran during the portion of the year they weren’t performing.

Oklahoma is a sports state so we played to the athleticism of our dancers and you don’t even realize you are watching a ballet commercial when it begins.

Here is the ad. Whether it was intended or not, I felt like the “Oklahoma City” graphic at the end with “Ballet” only popping in for the last second, communicated a sense of “we are you.”

After seeing these ads, it probably won’t surprise you that Jewell’s last bit of advice is- “know your audience. And have your men take their shirts off.”

You may be looking at this videos and thinking it must be nice to have the production budget to be able to make these videos. Jewell said the ballet trailer increased ticket sales enough that they covered the expense of making it.

While it is true that you often have to spend money to make money, I can personally attest it can be very easy to direct funds toward ineffective efforts. It can be extremely difficult to justify spending money on marketing that is not connected to a revenue generating activity. That is money you could use for that very purpose three months down the road.

There are opportunities for institutional marketing that don’t necessarily involve producing ads. I am reminded of the activities the Trey McIntyre Project engaged in around Boise, ID. In addition to their concerts, they generated flash mobs, danced at the local NBA farm team basketball games and participated in an art installation in a local hotel (starting around 3:30).

Certainly these type of things demand resources of their own. Time spent on them is not being spent on rehearing or creating, but the option is there.

And there is always having your men take their shirts off.

Memento Labore

by:

Joe Patti

Last month I wrote about a 2012 study that found the biggest impediment to creativity identified by Americans is lack of time.

A recent piece on Medium tells the story of an author who contacted 275 creatives to be interviewed for a book he was writing and was told “No” by one third of them. Another third said nothing.

Of those who did say no, a great deal of them cited a lack of time as the reason. The article author, Kevin Ashton, suggests that the reason why so many of these creatives were successful is that they said no to requests which would divert them from their work.

Time is the raw material of creation. Wipe away the magic and myth of creating and all that remains is work: the work of becoming expert through study and practice, the work of finding solutions to problems and problems with those solutions, the work of trial and error, the work of thinking and perfecting, the work of creating.

Creating consumes. It is all day, every day. It knows neither weekends nor vacations. It is not when we feel like it. It is habit, compulsion, obsession, vocation. The common thread that links creators is how they spend their time.

No matter what you read, no matter what they claim, nearly all creators spend nearly all their time on the work of creation. There are few overnight successes and many up-all-night successes.

From time to time I have written about how companies will bring a consultant or improv group in to teach their employees exercises that will help them become more nimble and creative. The mistake being made is thinking the exercises are the answer to the problem rather than recognizing it is the time spent with a shifted mindset that yields creative results.

The emphasis being on time spent.

Even creative artists can fail to recognize that their “break out” work was actually the result of a long period of failure and refinement and become discouraged when inspiration doesn’t immediately gift them with their next great idea.

I revisit this idea here periodically because it is useful to be reminded.

I frequently arrive at the solution I seek when I am mowing the lawn or in the shower. But generally the process hasn’t just encompassed the time it takes me to mow the lawn. I have already done a great deal of thinking and research leading up to that moment or have drawn my knowledge and experience to that point. The flash of insight I receive while mowing helps to coalesce all the ideas into a possible course of action.

[The title of this post is a riff on the Latin memento mori – remember you must die. My cobbled together meaning is remember you must work]