The makeup of a board of trustees – why is it important and what should you bear in mind?
The board of trustees – and by extension the people who sit on it – are responsible for the foundation. They run it and determine all its activities via the foundation deed, which sets out not just the organisational structure but also matters such as grants and funding. This means that good management of a foundation stands or falls by its board of trustees. It is therefore of the utmost importance that the board of trustees be assembled with care and consideration, paying heed to the following questions:
Do the members exhibit strong integrity?
A board of trustees has a lot of decision-making authority and performs its own internal checks. High ethical standards are therefore paramount. The governance issue of self-monitoring is particularly acute in small foundations with simple structures, where the board of trustees is responsible for both strategic and operational management.
Is too much power concentrated in the hands of the board of trustees?
Concentrations of power should be avoided, and clear responsibilities should be defined based on levels of authority. A system of checks and balances should be put in place. This is where an internal control system (ICS) comes in.
Does the board have the requisite specialist knowledge?
A board of trustees has a wide-ranging mandate, and certain areas of knowledge are indispensable. They can include legal expertise, the know-how to fulfil the foundation’s purpose, knowledge of finance or fundraising, and strategic capabilities. That is why a diverse board of trustees with experience of different areas is a boon.
Do the trustees also bring good social skills?
Specialist knowledge is not the only important prerequisite. Good interaction is also aided by diversity, and the Schweizer Stiftungsreport (Swiss Foundations Report) 2023 indicates there is some catching up to do on this front. Only around 30% of today’s trustees are female. The “Diversity Optima disc” created by Martin Hilb and Nils Jent can also be a useful tool when putting together a board of trustees.
Is payment possible and appropriate?
Many trustees give their time on a voluntary basis. However, it can make good sense to pay for expertise and to fill gaps in knowledge. This can also have a positive impact on engagement.