Little Red Bus — Your Vehicle for Building a Stronger Governing Board

Little Red Bus icon

Maintenance and Repair

The passengers on the Little Red Bus gathered for their annual business meeting to approve the budget for the bus for the upcoming year. After talking about all the new and exciting possible destinations in the next year — each with a cost — the driver urged the passengers to limit the number of new trips and concentrate more on spending dollars to address bus maintenance and repair issues. She pointed out that the bus needed new tires and an engine tune-up to ensure optimal operation. When faced with the exciting options of more trips or the less glamorous option of maintenance and repair, the passengers overwhelmingly voted to spend the money on the trips and forgo the funding of bus maintenance.

Several weeks later the passengers were experiencing yet another trip to an existing destination when suddenly the bus came to a halt. The bus had a flat tire and was unable to move forward. With no dollars available for repair and no spare tire on board, the bus and its passengers were stranded.

How does this translate into the experiences of a governing board? If a board fails to realize the need for adequate organizational infrastructure, it is possible that the operation of the entire organization may be in jeopardy. New and expanded programs are always exciting and carry with them the possibility of addressing multiple problems; however, without an adequate administrative infrastructure to support these programs' efforts, the entire organization may face the real possibility of functioning very poorly and not having the necessary reserves to address unforeseen problems.

Questions for consideration:

  • Does the board understand the need for adequate organizational infrastructure?
  • Does the board recognize the real possibility of unforeseen financial emergencies and budget in a manner that provides funds for such emergencies?
  • Does the board recognize that as an organization grows, there comes a point where financial support for infrastructure development must take priority over new program development?
  • Do funders recognize that organizations need general operating support, allowing the board to direct its resources where they best meet the needs of the organization?

Need help with board development?
Contact Jim Storm at jstormcod1@aol.com or 612-616-0256.

Little Red Bus — Your Vehicle for Building a Stronger Governing Board

Little Red Bus icon

Al Capone, Jr

The 36 passengers on the Little Red Bus (LRB) found it increasingly cumbersome and very time consuming to make group decisions and monitor the business of operating the LRB. As a result, they incorporated and created a governing board of eight that would take on those responsibilities. Prospective board members were told that their job would be an easy one as the driver of the LRB was very competent and needed very minimal oversight.

Unfortunately, once selected, the new board members rarely monitored the business operation of the LRB and oftentimes failed to show up for meetings. All felt that the driver, Al Capone, Jr., although stuck with a very poor name, would handle things well. At meetings, they would listen to Al's operating and financial reports while occasionally nodding off. After all, Al was the expert.

It came as a great surprise when the president of the board received a phone call from the bank indicating that the LRB had no money in the bank and was, in fact, overdrawn.

Board members were further shocked to learn that good old Al had been using business funds for his personal use. To make matters even worse, the board members learned that they were personally responsible for the debt incurred.

A key function of a governing board is financial oversight. How is the money being generated and how is it being spent? A failure to attend board meetings and to carefully review the financial standing of the organization are ultimately failures of the Board with individual board members bearing personal responsibility. Pay up!

Questions for consideration:

  • Do all board members understand their legal responsibility of financial oversight?
  • Do all board members understand the importance of their showing up in some manner at board meetings and reviewing the financial information?
  • Do all board members understand that it is the executive director's responsibility to provide them with accurate up-to-date financial information?
  • Are all board members willing to see their names in public should a financial scandal arise in the organization?

Need help with board development?
Contact Jim Storm at jstormcod1@aol.com or 612-616-0256.