Reflections from Ned

The Charismatic Executive and the check-and-balance role of the board of directors (September 2017)

In my last post, I shared one of my favorite sayings about governance: “The Board is the antidote for unchecked, charismatic executive authority”.  To me, that means that part of the role of the board is to help craft, and even temper, the visionary ideas of the executive director (or CEO, or other title) in the best interests of the organization. And to say no when those ideas don’t serve those interests.

The importance of exploring this idea was reinforced recently when a colleague shared an advertisement for a new book about the role of boards in the nonprofit sector (I won’t dignify it with a plug here).  According to this book, we need to blow up the current nonprofit board model and replace it with an executive-centric approach where the board is recruited by the executive (red flag #1) to give advice and “accountability” to support the vision of the executive, not the board (red flag #2). Further, we should adopt the corporate model of paying board members to participate in meetings – up to $1,000 a day for in-person meetings (sign me up, but hold red flag #3 for me).  What would that do to most nonprofit budgets, setting aside the PR nightmares paying board members might invite? Most concerning is the idea promoted in this book that it’s the executive who is responsible for the vision and major decisions, and the board should act as trusted advisors who are in place to satisfy IRS compliance requirements (I’ve run out of flags). Just hire a “strong, visionary” staff leader and cut them loose! What could possibly go wrong?

No one person can see all the down sides and benefits of any new idea, and it’s important to consider the fit with mission, culture, relationships and risk tolerance, among other questions. An enthusiastic, forward thinking executive can grow an organization through program development, building funding relationships, or creative marketing efforts…but such new directions can put the organization at risk.  We all have “blind spots” and need to be sensitized to the way others may see the risks we take.

During my time as an Executive Director, I brought program ideas and new strategic partnerships to the board. Many times, the board embraced the proposal, asked hard questions and made me do my homework, resulting in a stronger direction than if I had been the sole decision maker. Other times, my ideas were not accepted — through strong deliberation, embedded in the values of the organization and considering our place in the community, the board rejected my proposal.

The best illustration of this was a proposal I brought forward to explore a new program. Through our Alternative Sentencing Program, the organization I served helped people make restitution through community service and avoid jail time or large fines. Because of our good reputation and relationships, our partners in the Probation Department wanted us to develop a urine-testing program to help with monitoring their clients. I saw a potential new source of revenue, and the opportunity to meet the needs of a critical partner in our work (the Probation Department). After considering the proposal and the potential revenue, the board of directors voted to not go forward with the program, because it would put us in a different role than we were in — more punitive, with the possibility of sending people back to jail if they failed their test.  The board “checked” my (charismatic? you decide) executive authority and said no, this was not a fit with our relationships in the community, culture, or desired role with the people we helped.  Setting aside jokes about “new streams of revenue” and such, the board made a good decision.

Had I been left to make the decision myself, I might have reached the same conclusion eventually…or might have pursued this new direction that, with hindsight, would not have been good for the organization. The board did what it was supposed to do — govern, set the vision, and look out for the best interests of the organization we served together.

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Is the board governing? (June 2017)

We often talk about Board Governance…I say governing should be the central focus of every board, but what does it mean to “govern” an organization? How is that different from “running” or “managing” an organization?

First, let’s dispel one common misconception — the difference between a “working board” and a “policy/governing board”. I believe this is a false, even harmful, dichotomy. EVERY BOARD MUST BE A GOVERNING BOARD! Without a volunteer body which is truly in charge, exercising the last call on every important decision (or delegating with accountability), you don’t have a truly functional nonprofit. No matter what staff or program volunteers do, the board can never relinquish ultimate responsibility for the actions of the organization – this is the essence of the duties of care, loyalty and obedience.

If the board sees itself in one of the following ways, to the exclusion or ignorance of governance, the board may not be living up to its full responsibility:

  1. A “working board” – this usually means people do a lot of tasks outside the board meetings, like putting on fundraising events or helping with programs. But, is the board a group of people consciously exercising governance together, or is it a team of volunteers who occasionally come together?
  2. A “support group” for the Executive Director – this can happen with a long-serving Executive who is perceived as respected and effective. The board sees its role as mostly providing whatever that person needs to succeed, instead of ensuring accountability on the part of that person to the larger purposes of the organization and to applicable laws and regulations.
  3. A “rubber stamp” board – sometimes this occurs in larger, more complex organizations where the board may not be engaged enough to know whether the staff is pointed in the best direction for the organization, so policies and motions that come from staff are passed without much dissent or even questions from the board.
  4. A “board in name only” – the Executive exerts so much control over big decisions and board recruitment, effectively disempowering the board from any ability to ensure accountability in the best interests of the organization and the people it serves.

My favorite platitude about governance is this: “The Board is the antidote for unchecked, charismatic executive authority”. What does that mean? How can you help the board you serve on avoid the common mistakes above? More on that from me next time — watch this space! But in the meantime, start with the Montana Nonprofit Association’s Principles and Practices section on Governance to ensure you are doing the basics to ensure effective governance here: http://www.mtnonprofit.org/Governaceandleadership/