23. “Risk” Wisdom — A Key Competence for a Church Board Chair

The board of any non-profit charitable agency constantly engages in risk assessment as it processes various decisions. Church boards have no immunity from such responsibility and the chair, in his or her service to the board, plays a key role in helping the board assess and manage risk.

A church board deals with various kinds of risks — spiritual, legal, financial, congregational, missional. With some kinds of risk the board has to manage the risk through policy and holding a specific person accountable to insuring that the policy is being applied consistently and fairly (e.g. privacy of information, criminal record checks for all volunteers working with children, etc.). Other kinds of risks relate to decision-making and discerning the implications of a particular decision on the health of the congregation or the achievement of the church’s mission. Spiritual risks would be actions taken by the board regarding matters of spiritual conviction that may create tension between the congregation and public policy (e.g. stance regarding marriage).

For example, the church board budget committee brings forward a recommendation that the next fiscal year’s expenditures be increased 15%, even though the pattern of church growth, both in terms of people and giving has not changed in three years. The only rationale provided to support this recommendation is the need to have faith that God will supply. The primary cause for this major increase in expenditure is a ministry focus that one of the more influential board members on the budget committee has a particular interest in. During the discussion no board member seems to be willing to challenge the assumptions or to identify the risk such a budget increase might be to the church, if the congregation should also adopt this recommended budget.

The chair, however, has serious reservations about this recommendation, sensing that it has potential to exhaust the church’s financial reserves and cause significant disruption in the church’s ability to carry forward other segments of its vision. What is the responsibility of the chair in such an instance? In what way can the chair serve the board, exercise appropriate leadership to help the board understand the risk it will be embracing, and help it discern an alternative that carries less risk?

In this example, because this recommendation carries the weight of a significant board member, as the chair may seek to give leadership, there is risk that the board member may become antagonistic, that the board may become divided over the issue, that the chair may be accused of “lacking faith,” etc. The chair does not have an easy path to follow in such cases.

If you are or have been a board chair, you will know what I am describing because you probably have been there.  I wonder how you handled such situations?

Risk management is part of any board’s life. So one of the strategies a chair might employ is to help the board educate itself to identify, assess and deal with risk. Some board members probably give little thought to this matter. However, the whole board has responsibility to manage risk and the chair as its servant has to facilitate its ability to fulfill this responsibility. So, I suggest you be proactive and start with some education. Circulate a short article to the board about a board’s responsibility in such matters and then present a case study from a situation your board had to deal with where risk was potentially significant. Make sure the example is a year or two old so that it does not re-ignite latent emotions.

Second, as chair you might find out what policies the board has developed and suggest, if necessary, that the board begin to review them, bring them up-to-date, and make sure they are being implemented. This means some sort of reporting mechanism will need to be developed.

Third, you might suggest that the board review annually its liability insurance to ensure that board members, employees and volunteers are protected appropriately from specific risks.

Fourth, you might explore with your board how it would guide the congregation in dealing with matters of member discipline. Unfortunate as these situations might be, they do occur and often church boards are caught by surprise in these matters, never having thought in advance what process might be most helpful in overseeing such cases. Being proactive in introducing such discussions enables the chair to help the board avoid foolish mistakes that might harm the congregation and the specific parties involved.

A church board’s responsibility is not to manage risk on a day-to-day basis, but to oversee risk management and make sure that appropriate policies, accountability and reporting are in place and working. It seems that for church boards employee issues, member discipline actions, and financial management present the greatest risk. Privacy rights, harassment protection, and possible criminal behaviour of employees or volunteers (i.e. child molestation) require boards to insist that appropriate policies are in place and are being followed conscientiously. To write and approve policy but fail to implement or require accountability from the primary employees (i.e. ministry staff), is a formula for disaster. And all such policies must be consistent with current legal requirements.

But other kinds of risks, not of the legal variety, also challenge a church board. These relate to matters of spiritual health, mission fulfillment, and member-care. As a church board is making decisions, it must continually ask itself — will this decision truly advance the mission, will it build unity within the congregation, will it add value and bring help to those the church is seeking to serve, will it damage the reputation of the church in the community, will it enable the church to be a good employer? The chair serves to help the board remember to ask such questions and not to avoid the hard questions, no matter how heavily supported the proposal might be by some board members or others in the church.

In helping the board manage risk, the chair requires both spiritual intelligence and emotional intelligence, plus a strong sense of responsibility to his or her role as servant of the board. Sometimes it requires considerable boldness to stop proceedings and ask the tough question. The chair must be thinking about the implications of all church board actions and the risks inherent in each one. This requires forward thinking, a sense of the current congregation’s ethos, and good preparation for each meeting — as well as considerable prayer for God’s wisdom and protection.

The initial period of worship that should begin every church board meeting becomes an important opportunity to help the board members recalibrate their minds and hearts to the church’s mission so that their deliberations and decisions truly occur with the best interests of the church in full view.

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