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Board Role
12/2/2016 12:00 AM

The executive director must understand his place in the organization, according to this feature in B&A.

Executive Director Robert Benes (bob.benes@lakesandpines.org) said there could be any one of a thousand reasons the executive director fails in his position and loses his job.

“If I was to distill it down to its essence, I would have to say they fail because they at some point start to believe the title on their door and forget who is boss,” Benes said. “The boss will always be the board.”

One reason for this: The executive director tends to be an action-oriented individual. Mix that personality type with a board that is slow or hesitant to make decisions or just plain contrary and “the executive director wants to step up and take charge and lead,” Benes said.

That is when trouble starts.

“This is when any of those 1,000 reasons big or small may come in and rise to the level of terminal,” Benes said. This is why the executive director always needs to keep the board “out front,” so that the CEO can survive most anything, he said.

If the executive director has gotten ahead of his or her board to the point that the board is now visible only in your rearview mirror, trouble looms. “There are countless things then that can and will trip us up,” Benes said.

Board and Staff Contact
11/18/2016 12:00 AM

In this Board & Administrator feature from Editor Jeff Stratton, learn why a long-tenured executive was abruptly fired and how you can prevent the same from happening to you.



“You’re fired.”

When the executive director does not keep a tight handle on board-staff interaction, the board can panic and strike hard and fast like a snake.

A long-time administrator from New Jersey saw his career end abruptly once the board and staff started worrying about the nonprofit’s finances together.

“I was fired without warning last March after 10 years of loyal service because of financial stress freaking out our employees,” the New Jersey executive said. “Employees went behind my back to the board.”

The executive director ended up taking the blame for the recession’s impact on the organization. This is the type of board behavior commonly seen in immature start-up organizations. But rarely do you see board/staff contact like this with an experienced administrator with 10 years on the job.

That is why it remains vital that an executive director teach his or her employees a chain of command with lines of authority. Employees should understand that only the administrator reports to the full board and that the board hired you to manage the nonprofit’s operations. That means the administrator manages finances. It also means the administrator has total responsibility for hiring, firing, supervising, evaluating and disciplining employees.

These concepts are important enough to your success at the organization that they should be part of the new employee orientation program. Employees must understand who directs them, who is accountable to whom and who has responsibility for what from the start of their employment.

This is your best bet for attacking the employee-end-run-to-the-board issue. The alternative is employees who believe they can approach the board about any issue, and that undermines your authority. The executive director will become a figurehead with no real authority to manage personnel.

The board-staff contact problem also needs to be attacked from the board angle. The best way to manage this is for the board to approve a policy that clarifies the board’s relationship to staff.

Here is policy language I have recommended over the years to make the board-staff relationship clear to both staff and board members:

    “The Executive Director is solely responsible and accountable for the conduct and performance of the staff. Accordingly:

    • “We will not interfere with the Executive Director’s handling of operational or personnel matters.
    • “We will not give instructions to persons who report directly or indirectly to the Executive Director.
    • “We will not evaluate, either formally or informally, any staff member other than the Executive Director.
    • “We will not meet with, either formally or informally, any staff member for discussions about the Executive Director’s performance or his management of the organization.”

Sincerely,

Jeff Stratton, Editor

515.963-7972; jeff_stratton@msn.com

Micromanagement
11/4/2016 12:00 AM

Areas of “trust” must be worked through for the board and CEO relationship to thrive, said Dr. Eugene Fram in this Board & Administrator feature.

Dr. Eugene Fram, professor emeritus in the Saunders College of Business at the Rochester Institute of Technology, said if the board and its CEO are bickering over boundaries, there are likely issues with trust in areas such as these:

  • Each party may occasionally step on the other’s toes. Fram cites an example where he was chairman of a board. The CEO made a five-year lease contract for additional office space because the money for it was in the budget. There wasn’t a great deal of money involved, but it was a long-term contract. “I said this should have gone through the board, while the CEO argued that he had signed contracts for larger amounts of money,” Fram said. “My point was that this lease was for a long-term fixed asset, and the board agreed. So we formally set this as a boundary for the CEO.”
  • Overaggressive directors can go too far. An example of this might be a director who bypasses the CEO and contacts the HR director and tells her to put a specific system in place to avoid liability. “In that case, the CEO has the responsibility to go to the board chair, and the chair can take care of that issue or take it to the full board so it can say ‘OK, you are the manager and we have to abide by your judgments,’” Fram said.
  • “There is some play back and forth between the CEO and the board over each other’s boundaries,” he said. It should take about a year or a year and a half to develop trust in these areas when a new executive director is hired, Fram said. The CEO should be sophisticated enough to know board thinking on issues.

    This culture is the responsibility of the board to maintain. So when the board installs new trustees because of board turnover, the trust that has been established remains in place. For instance, if new members wish to direct social workers or feel they have a responsibility to evaluate staff, the board will say no, Fram said.

    In this type of culture, the board also should accept the fact that the CEO will always have more information on operations than the board can have, Fram said. “The board should realize that any attempt to micromanage in this area is disrupting to the organization, because the CEO needs to be viewed as a professional manager,” he said.

    This is not as much of a problem in the business arena as it is in the nonprofit sector, Fram said. “An attorney may join a nonprofit board and think ‘this CEO was originally a social worker, so we may have to teach him about the real world.’ In reality, the CEO may have acquired far more managerial experience than the attorney,” Fram said.

  • There must be a fair but robust CEO evaluation process. Fram said this should be primarily related to compliance areas and the audit, but the executive should also be evaluated on hard-to-measure topics—such as staff performance, advocacy and impacts. “The audit committee has to ask questions and probe deeply,” he said. Whistleblower comments must be taken seriously and reviewed immediately, he said.
  • The CEO can’t just dismiss these by saying, “Oh, that’s just a dispute in the XYZ department,” Fram said. “The board should verify what the CEO is reporting,” Fram said, because it’s part of the board’s overview responsibility.

    The CEO can’t be insecure about executive committee meetings where he is not present, either, Fram said. “She has to understand that these take place from time to time or are regularly scheduled,” he said.

    Ten years ago, the only time the board met without the management was to meet with the external auditor. “This is the 21st century,” Fram said. There have been huge board scandals in the business and nonprofit sectors. Executive sessions should occur on an ongoing basis as part of the board meeting, he said.

    The CEO should be a member of all board committees, with the exception of compensation, when her salary is being considered and when any conflicts of interest involving her might arise, Fram said.

    The CEO and chair should work well together to create this type of culture between the executive and the board, Fram said. “They need to be on the same page,” he said.

  • The board should provide growth opportunities for the CEO. Fram worked recently with one board member who pointed out that while their CEO was a great person and works well with the board, he needed to be more aggressive or entrepreneurial, he said.
  • “I asked if the board had ever thought of engaging a coach to work with him for a year or two,” Fram said. That’s the type of idea the board can use to support its CEO, he said.

    Other options include providing educational opportunities or supporting the CEO’s outside work in his mission’s arena, so that he has opportunities to grow, Fram said.

Fram’s governance blog can be found at http://bit.ly/yfRZpz.

11/11/2016 12:00 AM

Use this Committee Operations Analysis from Board & Administrator to take a critical look at how well board committees perform.

Resource
10/14/2016 12:00 AM

This resource from Board & Administrator Editor Jeff Stratton is designed to prevent communication problems between the board and executive director.

When communication failures occur between the executive director and the board, the executive typically loses the board’s confidence and eventually his job. Use the following checklist to ensure you are doing everything you can to ensure effective communication between yourself and the board.

  • Communicate with respect. Board members do not have the knowledge about the organization that you have.
  • Provide feedback on the impact of the board’s decisions. Boards make policy, but board members are interested in knowing how their decisions improve the lives of others or improve the organization’s results.
  • Talk board members through issues. Let them go through a process where they ask questions and share concerns. Then, they will be more comfortable approving your recommendation.
  • Improve your written reports. Be sure the information is interesting to board members; don’t assume board members understand your message just because you do (invite them to call); highlight specific problems, issues and accomplishments; and give board members your personal schedule (some of them just need to know this).
  • Know board members as individuals. Communicate with them in between board meetings; take their advice; show them appreciation; recognize their accomplishments; and always, always treat them in a professional manner.
  • If you wish to make big changes at the organization, ensure your board has been introduced to the idea long before it will become reality. If you are planning on budget growth, for example, show the board estimated budget growth for the second and third years using a mock budget.
  • If a “sacred” program has become a drain on the budget, be sensitive to the politics at play. Systematically feed your board evidence of a need for change.
  • Never invite your board to meddle. Do not ask your board for approval of administrative decisions, for example. This is the same as inviting the board to hire your staff and allowing them to tell you what type of vehicle to buy. It is confusing communication to board members.
  • Build your board up in public. Do not take credit for successes; instead, credit the board. Let the board recognize you for the organization’s success. Give them proper credit and communicate your appreciation for their sound decisions that led to accomplishments.
  • Give each new board member a copy of your board-approved job description. It’s important to communicate what you do to new board members right from the start of the relationship.
  • Ask board members for the type of financial information they want you to provide. Let the board decide what it wants.
  • Understand why each of your individual board member serves. Is it because of social needs? A strong sense of community service? A desire to advance their career? Target your communications efforts toward these specific needs.
  • Upgrade your communication efforts as needed by:
    • Asking a board member about his personal interests.
    • Recognizing the accomplishments of the board member’s spouse or children.
    • Recognizing volunteer work at the organization.
    • Inviting board members to social occasions.
Resource
10/7/2016 12:00 AM

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


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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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