319. Discerning Your Boards ‘Blind Spots’ — Engaging a Risk Assessment Process.

Everyone has blind spots — physical, cognitive, moral, relational and spiritual. Usually external voices have to point these out to us before we recognize them and become motivated to deal with them. What we do not know can in fact hurt us. Church boards have collective blind spots. External consultants can help boards discern these and help a board take action before they generate serious difficulties. However, boards can help themselves discern their blind spots too.

The blind spots that commonly characterize church boards involve lax financial oversight, lack of due process, susceptibility to cyber attacks, compliant decision-making, failure to manage conflicts of interest, moral failure, and loss of theological integrity. Church board leaders have some responsibility to help their boards discern these blind spots, assess the risk and take reasonable steps to protect the board and the congregation.

What is a risk? The Business Dictionary (businessdictionary.com/definition/risk.html) defines it as “a probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action.” Congregations are operational entities with staff, board members, clients, facilities, resources and programs. By virtue of their operational existence congregations encounter risks — some small and some great, some avoidable and some unavoidable, some self-generated and some externally sourced. Church boards have the responsibility to help congregations identify potential risks and take necessary action to mitigate them as much as possible. The rationale for this is that risks by definition normally have negative and damaging consequences.

Many people who accept a position to serve as a church board member do not fully realize the potential personal liability that they entail with this role because of various risks that non-profit charities face, particularly congregations. Most church boards will insist that the congregation purchase adequate officers and directors insurance to protect board and staff from unexpected liabilities. This is a first defense in managing risks. Of course, other kinds of insurance (property, fraud, protection of intellectual property) are also necessary for mitigating risk.

One of the best strategies church boards can employ to mitigate risk is the development of wise, effective policies. Ensuring that approved policies are being implemented consistently is a second stage of board responsibility that frequently gets overlooked. This requires performance evaluations and program assessments. Without these happening on a regular basis, a church board does not know whether its policies in fact are being executed properly.

Many other good strategies exist, such as requiring annual financial reviews or audits, sustaining a careful board member selection process, implementing a whistle-blower process, requiring up-to-date cyber protection equipment, software and services,, and implementing a conflict of interest policy for board members. When funds are scarce, church boards can talk themselves into trying to save money by accepting unreasonable risks. Church boards value trust and sometimes they trust too much, allowing significant risks because they fail to hold employees and volunteers appropriately accountable.

“By failing to prepare, you prepare to fail” (Benjamin Franklin). In 2009 the Canadian Institute of Chartered Accounts made available “20 Questions Directors of Non-for-profit Organizations Should Ask about Risk.” It is available at
https://www.megram.com/pdfs/20-Questions-NFP-Directors-Should-Ask-About-Risk-2009.pdf. This is a very useful survey of various kinds of risks that non-profit agencies frequently face. They suggest key questions that board members might ask in order to discern whether they have considered adequately various kinds of risk.

This entry was posted in Board, Board Chair, Board Governance, Board Member, Senior Pastor. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

*