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Board Relationship
8/10/2017 12:00 AM

Board consultant Carol Weisman gives tips on how to succeed as a nonprofit CEO in this feature from Board & Administrator.

Nobody wants to fail. It can lead to job loss and a decline in professional stature, and can be very difficult emotionally for the nonprofit executive.

Board consultant Carol Weisman (www.boardbuilders.com) has worked with more nonprofits than she can count. She’s seen executive directors come and go over the years and gained valuable insights into why the nonprofit CEO fails.

Here are Weisman’s lessons learned about executive director failure and how to prevent it from happening to you:

  1. The top executive isn’t learned in fundraising strategy and receives no training. Weisman cites a recent study by Amy Eisenstein that concluded that if the nonprofit’s CEO or development professional receive training, the organization raises $37,000 more annually on average.
  2. “What you find with executive directors is that they are industry experts,” Weisman said. They might have been a banker who cares about children, a parent who has lost a child, or a scientist, she said.

    “But they have no fundraising experience,” Wesiman said. They then walk into their new job at a nonprofit and find out there is no development director in the organization and receive the shock of their lives, she said.

    “You have to get training in fundraising,” she said.

    The training the administrator should seek is similar to the training a board member should have—but with additional background information on issues such as budgeting for a capital campaign, feasibility studies and fundraising software, Weisman said.

  3. A poor relationship with the board chair. For Weisman, what’s key to an effective relationship with the board is a great relationship with your board chair.
  4. “One of the things I preach is the need for a ‘prenuptial’ agreement between the executive director and the chair,” she said.

    The agreement should be a verbal one and specify how often the two will meet, the types of information the chair wants to receive, how each party defines an emergency and issues surrounding what is “personal time” for each person.

    Other issues important to your chair can arise from this type of conversation as well. Weisman spoke with an executive director who didn’t want to have meetings that involved alcohol due to personal struggles with it. “That is a very personal type of conversation,” she said.

    An example of personal boundaries and time: When Weisman served as chair of a board, she told the executive director that if he wanted to call Weisman by 5:30 a.m., that was fine. But by 9:00 p.m., Weisman preferred not to be disturbed. The executive director said he was recently separated from his wife and had his kids on weekends and Wednesday nights. He asked Weisman not to call during these times.

    The “prenuptial” should be verbal, Weisman said, because it gives you and the chair a chance to really talk through the issues. “There needs to be some give-and-take, some compromising, and this needs to be done verbally,” she said.

    “Have this meeting in person and not over the telephone, so you can negotiate,” Weisman said. “Also be sure to ask for your chair’s pet peeves, along with nailing down communication preferences such as email, text or phone contact.”

  5. Unrealistic expectations on the part of the board. Boards have a tendency to say things such as “We are going to see revenue increase by 25% next year” and leave their executive director speechless, Weisman said.
  6. When working for a board like this, Weisman said, it pays to be direct. “When boards say something along these lines, I turn it back on them and ask how much it would cost to raise their bottom line by 25% in one year,” she said. Then Weisman asks why the board member thinks that something that would be too pricey in their business will work for the nonprofit.

    It can pay to bring in an outsider to make points like this to the board, Weisman said. You need someone the board will respect but that can be direct with them as well. “We usually have a conversation like this and it works because I really want to know why they think something can work at the nonprofit but not their business,” she said.

  7. The issue of the board and fundraising. This is where the expectations of the executive director are often set unrealistically. Board members haven’t been trained to fundraise, but the CEO still expects them to do it, Weisman said.
  8. “If you work in a hospital, you can’t even empty the trash without training,” she said. “In the nonprofit world, we take highly successful people and ask them to fundraise without training. We set up board members to fail and that’s not nice.”

    A similar issue with fundraising expectations that are out of whack occurs with small and midsized organizations, Weisman said. “Executives often expect to receive the same level of gifts that people give to larger organizations,” she said.

    Weisman once had a client who was spitting mad because her board chair gave a very sizeable gift to a prominent organization but a much smaller one to the organization where he was chair.

    “It can take years to build up the kind of trust to secure a very large gift,” Weisman said.

    Executive directors sometimes assume that a C-suite person in a business on their board can get company funds for their organization. “There are just too many issues in play to assume this,” she said. “You may have a controversial cause or serve a small population, and a corporation may not choose to get involved in your cause. They already have a philanthropic portfolio and you may not be in it.”

  9. Executive director “burnout.” The executive director should make it a personal priority to step away from the front lines and feed his or her soul, Weisman said.
  10. That’s because executive directors often face very difficult choices in their position. An example from Weisman: Let’s say you have two calls come in, one from a donor and one from a family member of someone you serve. Which call do you take first?

    Doing your job properly means you take the donor’s call, Weisman said, if you have a good staff that can handle the family concern. “This burns people out—getting pulled in two directions,” she said.

    The burnout issue can be fixed by setting goals and boundaries, Weisman said. Have lunch once a week with your donor and call donors first thing in the morning and last thing before you head home, she said. Then every single morning have coffee with clients in your sheltered workshop. “By doing this, you give yourself some metrics,” Weisman said. “You make your donor calls, and then go back to your mission self.”

Succession Planning
8/4/2017 12:00 AM

CEO Jane Wear offers advice for working through multiple succession planning scenarios, in this Board & Administrator feature.

CEO Jane Wear (Warsaw, Ind.; jane.wear@cardinalservices.org) sees great value in succession planning for an organization’s executive position. That’s because this type of planning has a versatility to it that can help the nonprofit in several challenging circumstances involving the departure of the executive.

“Succession planning can take many forms,” Wear said.

A good succession plan can develop an internal candidate to be prepared on an interim basis to lead an organization if something unexpected happens to the CEO, Wear said. It can also prepare a person or two within the organization to be an effective leader as the CEO retires or otherwise leaves the organization, she said.

That’s not all: “It is also an effective way to invest in employees that you see significant potential in,” Wear said.

There are four important areas where an investment in succession planning can assist the organization, Wear said:

  1. Unexpected personal situation with the CEO.
  2. Retirement of the CEO.
  3. CEO departure announced at least a year in advance.
  4. Surprise CEO departure.

Unexpected personal situation with CEO

As CEO, Wear found herself in an unexpected situation facing life with a husband with terminal brain cancer. This blow would also affect the organization directly.

“I knew I would be in and out of the organization for 18 months as I cared for my husband during his last days,” she said. “Work was the least of my worries for several reasons.”

This unexpected development left the organization without its leader, but an internal person was already being groomed as a potential successor, due to planning that included:

  • Work that had taken place. A formal succession plan is in the implementation stage for this person, Wear said.
  • An effective job description. The responsibility to serve as the interim CEO was stated in his job description.
  • Staff leadership in the know. The administrative management team attended all board meetings, Wear said.
  • Team decision-making. The administrative management team was involved in all important decisions.
  • Policy matters planned out in advance. There was a policy review schedule established for the board and committee meetings, Wear said.

“The fact that everyone, including the board, knew what the protocol was when I was unable to be at work and that the key managers of the organization were involved in important decisions allowed the organization to function as usual in my absence,” Wear said.

By having a preset policy review schedule in place, the board and staff were assured that everyone knew the regular business the board needed to handle was for each month, she said.

Retirement of the CEO

A CEO’s retirement can create multiple routes for the board to take in its succession planning. Wear said one is for an internal candidate to emerge.

“The board needs to decide whether to even interview other candidates,” she said.

The other route for the board, according to Wear, is when there are no internal candidates, or there is an internal candidate but the board decides to interview the internal candidate and then open up the position to others. Let’s look at each issue.

With a solid internal candidate in place, the board has several issues to consider:

  1. If the internal candidate is not promoted to CEO, is he or she likely to leave the organization?
  2. How do the customers, staff, funders, legislators and others in the community feel about this person?
  3. Is the board performing their role appropriately if they select the internal candidate without interviewing others?
  4. If the internal candidate is promoted, what holes are left in the organization that will need to be filled?

On the other hand, if there is an internal CEO candidate but the board wishes to interview outsiders, the board should consider issues such as these:

  • How to explain the interview and hiring process to staff and the internal candidate.
  • The need to establish an interim CEO if the organization is now facing a period without a CEO.
  • The internal candidate’s role. “The board also needs to determine if the internal candidate will be involved in any interviews with the other candidates,” Wear said.

CEO departure announced at least a year in advance

A CEO departure that is announced well in advance of the exit date gives the board time to plan for what is best for the organization, Wear said. Issues to consider in this scenario include identifying:

  • The goals of the organization going forward.
  • What skills a successor will need to achieve those goals.
  • What is needed in terms of the capacity of the board, managers and internal processes to sustain funding and programs into the future.
  • Where the organization appears vulnerable going forward.
  • Formation of a succession planning committee.
  • Whether the CEO should continue working with the organization in some fashion.
  • The search strategy and whether to use a consultant and/or recruiter.
  • A communications plan.
  • The additional support, resources and accountability a new CEO may need.

Surprise CEO departure

The final issue for a board to consider, the unexpected departure of a CEO, presents sterner challenges to the organization, Wear said.

“The job description of the CEO should specify the amount of notice expected if the CEO plans to leave the organization,” she said. Well-thought-out strategies for the following will also help to put the organization in a more favorable position if such an event arises, Wear said.

  • A succession plan is already in place for the CEO.
  • It is clear who the interim CEO will be.
  • A strong management team is in place.
  • Communication to clients, staff and community should be crystal clear.
Executive Sessions
7/27/2017 12:00 AM

Board & Administrator Editor Jeff Stratton explains why the board should meet without its CEO only under specific, limited circumstances.

Either the board and administrator are a team or they are not.

That is why it is bad practice for a board to exclude its executive director from a meeting, except for four very limited, specific reasons. They are:

  1. When discussing the CEO’s annual performance evaluation and compensation adjustments (although an argument can be made that the CEO should be present during evaluation discussions to prevent anonymous input and board comment from entering into the evaluation’s content)
  2. When discussing a corporate compliance issue where allegations have been made against the CEO.
  3. At the end of the audit review so the board can ask questions of the auditor without employees present
  4. If there is an allegation of sexual harassment against the CEO

There’s a real cost to board and executive teamwork when a board shuts its executive out of a meeting. “My board just met without me and it’s made me a little jumpy,” said one South Dakota executive director. “We’re supposed to be a team.”

The administrator didn’t sit back and simply take the board’s action. “I met with the board chair and told him I felt excluded from the team. I said I should have been there just to correct misinformation if for no other reason,” he said.

The administrator should have the opportunity to participate in all board discussions in order to be an effective member of the team. The insights the administrator brings to board discussions will help ensure that board ideas are workable. After all, the executive director is the board’s most valuable resource, and to exclude her from a meeting means the board might make decisions that won’t even work—yet the CEO can still be blamed for poor board decisions that result.

One strategy administrators who work under a contract have available is to insert language that provides for their attendance at all board and committee meetings into this legal document that prevents such meetings.

Not only does this protect the CEO, but it also gives the board leverage when a new board member joins and wants the administrator excluded from a meeting.

Resource
3/10/2017 12:00 AM

This resource from Board & Administrator helps board members assess their engagement level with the organization.


Resources
2/24/2017 12:00 AM

In Brian Foss and the Horatio Alger Association’s book, Governing Effective Nonprofits in the 21st Century, board members can find a wealth of practical information about serving on a board.

Below, you’ll find a terrific job description for a nonprofit board member.

A Sample Board Member’s Job Description for Any Nonprofit

  • Understand and support the mission, programs and services of the organization.
  • Accept the responsibilities of being a fiduciary of a corporation that exists for the public good using tax-exempt, tax-deductible funds.
  • Make a multiyear commitment to participate actively in governance meetings and programs.
  • Be among the first, most generous and consistent annual donors.
  • Invite new people to become involved in the organization’s work and to contribute financially.
  • Assist other governance leaders in building relationships that will help the organization fulfill its mission.
  • Be a steward of the public trust and a trustee of the organization’s mission and resources.
  • Keep the board’s work focused on governance issues, policy creation and setting strategic directions for the organization’s future in a transparent and ethical manner.
  • Keep the board focused on effectiveness in fulfilling the mission and programs, and creating an organization that is best-in-class.
  • As a fiduciary, ensure that the organization is diversely funded, approve the annual budget and monitor fiscal affairs, conduct an audit annually, have fiscal controls in place, review IRS Form 990, and plan for the financial future of the corporation.
  • Ensure the board has policies in place regarding board and staff conflicts of interest, self-dealing and transparency.
  • Understand how the organization raises its funds and approve all of the fundraising practices and external contracts for fundraising.
  • Leave management matters to the organization’s CEO and help the board and staff continuously differentiate the roles of governance and management.
  • Be an advocate and ally for the CEO, assuming such support is merited. Participate in the hiring, nurturing and evaluation of the CEO.
  • Keep the board focused on the organization’s mission.

 

Source: Brian Foss, Governing Effective Nonprofits in the 21st Century. Reprinted with permission.

Resource
1/27/2017 12:00 AM

Use the following exercise from The Board Doctor to assess your board’s understanding of its role.

Use the following exercise to determine how clearly your board understands its role. Identify those areas where the board lacks either knowledge or information, and make plans to find them the training they need. Remember: An untrained board is a disaster (for the CEO) waiting to happen.

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  • Meet the Editor

    Jeff Stratton
    Editor

    Jeff Stratton has edited Board & Administrator since 1992. As the Board Doctor, he has advised thousands of executive directors and board members on issues like prevention of
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