Author's Name: Mark Schultz
Date: Wed 27 Jul 2016

What is the optimum Board size?

We are often asked “what is the ideal number of board members for a non-profit organisation“ and our answer is generally “depends“! And the conversation then goes ”depends on what?“ In this article, we are going to discuss the “what “ and provide some commentary around what all leaders of organisations should be considering when thinking about the number of members for their board.

To set the scene, a board should be large enough to get the board’s wok done yet small enough to work effectively as a team to communicate, deliberate and function as a cohesive group.

For the purpose of this article, let’s create three groupings and discuss the pros and cons of each. The three are:

  • Less than 8 members;
  • Greater than 10 members; and
  • Between 8 – 10 members.
Groups

Pros

Cons

Less than 8 members Decision making process much easier with fewer people
Cost of managing the board is lower
Recruitment process not so onerous
Less diversified board due to reduced numbers
Board business may be impacted due to attendance issues
Greater workload for individual member, potential for burn out
Potential for less analysis and discussion on key issues due to lack of different perspectives
Greater potential for “ group think” 
Desired skill set may not be achieved
Potential adverse impact of director turnover
Less flexibility in succession planning
Greater than 10 members Greater opportunity for genuine diversity
Broader range of skill sets
Workload may be shared across greater numbers
Potential for enhanced analysis and deliberation
Able to cope with absence of members
More effective for succession planning
Board member engagement – increased costs and time to discuss all issues
Greater cost to management to manage the board
Potential for cliques to develop
Not enough work to keep members stimulated and interested
Potential for reduced commitment ie plenty of people to do the work
Increased number do not necessarily mean better decisions
Recruitment process
Between 8 -10 Enough numbers to meet diversity and skill base expectations
Adequate numbers to “ spread the workload” and retain interest at the same time
Groups are not formed, numbers small enough to support individualism
Managing the board costs not excessive
Board member engagement can be maximised without impacting on decision making process
Orderly succession can be managed
Attendance generally is not an issue
At 8 members, If 2 or more are absent, board effectiveness and diligence may be negatively impacted
Does require full commitment of all members as numbers do not allow individuals to take extended leave of absence
Less numbers may impact stakeholder perceptions of appropriate representation and governance
Even numbers may be problematic in 4-4 vote

In deciding the optimal numbers for an organisation's board, the decision makers should reflect on these matters. Our advice and recommendation is generally 8 -10 members as being the optimal number, with 8 more appropriate for a larger more commercial operation and 10 more suitable for a smaller organisation or sporting club.

A simple filter is the staffing arrangements. For those organisations that employ a CEO/ Manager, then 8 is the preferred number, whereas if resources are less and staffing reflects this, then 10 would be more suitable to better support the business without the downside of a much bigger board (or Committee as a better description).

Furthermore, if the opportunity presents itself, it is advised to start with less and appoint additional members if deemed necessary; it's much easier to recruit than downsize!

In summary, there is no "off the shelf" system for the ideal number of board members. Whilst the principles of good governance are consistent across organisation types and sizes, structures are proprietary and should reflect the strategy and culture of the organisation; however like all matters in relation to governance, the business leaders must think about and plan to create their preferred structure to achieve the best result for their organisation.


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