Recently, I have met with dozens of nonprofit CEOs. The range of the organizations they lead is vast – budgets of less than $1 million to those with annual reviews in the hundreds of millions. They have been from every
corner of the country, pursing a broad range of missions. What was striking was the great commonality of most of the discussions.
It’s not what you think.
Nope, not the challenges of recruiting and retaining a high performing workforce. Not, either, the always intense pressure to generate revenue. Nor is it our polarizing political climate. It is not even the highest profile question of our time: in office vs. hybrid vs. remote.
It is the Board of Directors. Almost every time that’s what the conversation gravitated. It starts with general platitudes: “My board is in a good spot,” “I enjoy working with my board,” or the great, general “All is well.”
It does not take much thou to uncover more. A harmless question. An innocuous inquiry. Sharing an anecdote. And a deeper reality emerges of the often ill-defined, challenging relationship between a nonprofit CEO and the Board of Directors.
The easy stuff is well understood – the key decisions that are the purview of the Board of Directors, the CEO serves at the pleasure of the Board, and the budget is approved by the Board. Those are clear.
But what about all the rest? Do I have the right people to have on the Board? Why aren’t Board members doing more fundraising? Where is that magical line between governance and operation? Do we really need another board member or another committee or another meeting or another review of the bylaws?
This phenomenon is difficult, even divisive. Relationships between executives and boards have led, in my recent conversations, to comments from CEOs along the lines of ‘I’m on my last contract,’ ‘I have never been more disengaged,’ ‘I’m just tired of being treated so badly,’ and ‘I just don’t know where I can go with my frustrations.’
Here’s the plot twist.
As frustrated or disengaged as the CEO is, even to the point of seeking an exit ramp, so, often, is the Board of Directors. These individuals are dedicated to the mission, generous with their time and treasures, and want to do good – to contribute to making our society better.
Yet they are frequently riddled with questions and even doubts: What is my role? Am I really adding value? Where do I get the training or education I need? Can you help me help you? Is my term up soon? Do we need another board member or another committee or another meeting or another review of the bylaws?
It is the unspoken dynamic in the boardroom of nonprofit organizations across the country. Sometimes it’s more hidden, sometimes it’s the elephant in the room.
Over the past 30 years I have sat on both sides of the CEO-Board of Directors relationship. I staffed board committees and attended every board meeting for 15 years as a Chief Operating Officer and reported directly to a 22-member national board of directors for another decade.
My board service continues to span large and small organizations working on local problems, delivering national solutions, and providing essential public policy representation in Washington, DC. Often these opportunities have provided me with the privilege to serve in the role of Chair of the Board of Directors.
The biggest takeaway from these last three decades: The relationship between the Board of Directors and CEO can be one of the greatest assets of a nonprofit. Unfortunately, it can also be one of its greatest liabilities.
In this balance sheet, one potentially more important than financial statements, how do CEOs and Boards of Directors move forward? It starts with getting help with these difficult conversations including:
- Setting expectations for both the Board of Directors and CEO in explicit, clear ways. Establishing the rules of the road and living within them.
- Developing accountability systems – often in place for the CEO and rarely in place for the Board of Directors.
- Assuring full, transparent communication formally and informally between the CEO and Board of Directors, not just the Chair.
- Tackling issues as they arise rather that the more common strategy of avoidance.
That’s a good start. More needs to emanate from there.
Finally, two clues. One for CEOs and one for Board members related to whether there is a need for a conversation.
CEO Clue: If you report to a board of directors now is the time to tackle the issue of CEO-Board relationship – whether you think it is good or not, now is the time to do the extra work to solidify the relationship with clear understandings and expectations for both you and them.
Board Member clue: If you take this to the CEO of the organization which you serve and they say “Don’t worry all is fine,” don’t worry. ACT! Begin to work to
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