Legislative arguments can move fast, and debates can be heated. But when it comes to deciding how to think about advocacy, boards need to be patient and considered. Here are three ways they can play that role.
With the debt-reduction debate continuing and a slew of legislative changes on the horizon, it's no surprise that many association board members are kept awake at night considering the impacts of particular legislation on their organizations' members. In the midst of such turbulence, however, there are a number of steps board members can take to prepare for political developments that may affect their organizations and the industries they represent.
1. Understand the impact of legislation on the industry. Government policies—like tax rates, subsidies, or federal spending—can affect the ways that individual businesses operate and entire industries function. As new legislation is considered, some of the most important questions a board member can ask are
- What impact will this legislation have on businesses within the industry my association represents?
- Will it increase regulation? If so, where will funding come from to pay for increased oversight?
- Can members change their pricing structure to recover the costs, or will it impact their profit?
- Might this legislation affect the overall number of businesses in the industry? If this proves to be the case, how will the industry adapt to that change?
2. Gauge the impact of legislation on the association. Industry leaders rely on their representative trade associations to advocate on their behalf and to help them adapt in times of change. While a particular piece of legislation can have an impact on a broader industry, it could also affect the association itself.
To navigate these challenges, board members should receive regular updates from the association's management team outlining the steps the organization is taking to prepare for any change in regulations. These steps may include advocating on the industry's behalf, forecasting the financial impact a new law might have on the industry, and considering the expansion of programming to address the regulatory changes (providing job training, for example).
If changing regulation will impact the association's revenue stream or strain its existing resources, the board should have a clear understanding of how management proposes to address these challenges and can advise them on the best course of action. These actions bring with them risks, of course, so board members should also work to ensure that management is focused on their impact and taking steps to mitigate any potential vulnerabilities.
3. Know what it really means to be a board member. If one serves on the board of an association, chances are he or she plays an active role in the industry that the association represents. So, board members are keenly aware of the impact a particular piece of legislation might have on their business. With that knowledge, board members are uniquely situated to help craft the message that their association needs to communicate effectively to its membership. By staying informed through regular communication with management and knowing the association's key talking points, board members can consistently provide reassurance to the organization's members that their interests are well represented. Above all else, board members should keep in mind that their role is oversight—and it is management's job to implement the board's vision for the association.
Laurie Arena Rocha is an assurance partner for BDO USA, LLP's Nonprofit & Education Practice and a regular contributor to BDO's Nonprofit Standard blog and The Nonprofit Standard Newsletter. Email: [email protected]