Does Your Boss Have a Boss?

I've been guilty myself. There is great criticism and consternation now about leaders in Washington "kicking the can down the road." It seems many of the tough decisions are deferred to someone else. And most often, they leave damages for others to fix along the way.
So, I must confess. I know it's often hard to make tough decisions. Even the obvious ones can sometimes be difficult. I've put off challenging decisions at great expense to me — and most often increased stress and decreased results.

When we talk about these decisions with a nonprofit, we are usually dealing with a public trust. In a highly functioning or highly challenged nonprofit, a common denominator is a strong or weak board. In the future, we'll discuss the board's role as an ethical watchdog. But let's focus on the board's role in supervising the CEO for performance and ethics. It is essential to have a proper structure in place — whether the role is given to the board as a whole, a compensation committee or the executive committee.

If there is a human resources function in the organization, utilize it. Also look at the benefits of bringing in outside counsel to help the board with its role as the CEO's supervisor. This could range from compensation counsel to helping the board set and measure goals with the CEO. Board members need guidelines, performance objectives and even the right forms. They need to be coached on when and how to perform a review (and this should take place more often than once a year). Of course, the board should develop a strategic plan and appropriate policies, and then empower the CEO to implement and accomplish them. It is important to hold the CEO accountable and reward him/her for the results!

I'll never forget visiting with a former Fortune 500 CEO who had just served two years as board chair for one of the largest nonprofits in a community. When he asked what authority he could have exercised over the CEO, I froze. "Well, you could have had him fired," I responded.

The board had been very frustrated over the CEO's performance, and obviously systems were not in place to safeguard the public trust. Each of the last three board chairs had left fatigued by the CEO, and all each could muster the strength to do was require him to have an executive coach — and then he chose one of his best friends to serve in that role.

As a nonprofit CEO, I had a board chair who was incredible. He supported and defended me when needed, but I can assure you that behind the scenes, he challenged me to improve and was a great strategist and mentor. Not every board chair can or should play all these roles. In any board chair-CEO role — even stellar like I enjoyed — there should be a positive dynamic tension because at the end of the day, the board chair is the final steward of the public trust.

One of the most common sins of a board chair is conflict aversion, especially when dealing with personnel issues relating to the CEO. When the chair sees a CEO not performing — or even with ethical lapses — he or she knows confronting the issues will take a lot of time and be downright unpleasant. This is when the chair either takes the lead to make change or counts the days until his or her term expires. If the board chair chooses the latter —kicking the can down the road — it leaves the growing mess for the successor(s).

With the approval of a new board chair, we were retained by an organization's major donor to craft a development plan. Soon, we realized that the donor really wanted an objective view of the organization and especially the CEO. As we interviewed former board chairs, it became apparent that they all tried to hold the CEO accountable, and when the CEO fought back and developed allies on the board they just fled, instead of fighting. Each left the board after serving as chair. The CEO complained that she had not received a raise in seven years. She also did not have a performance review in seven years and was already being paid above scale and was seldom at work. The sad reality: While we diagnosed the trouble, it was too late. The organization filed for bankruptcy a year later.

Being a board member, and especially a board chair, is a serious commitment, and there is a fiduciary role that can't be abdicated. The selection of board members and especially leadership is such a critical decision for your nonprofit. Board members must work as a team with the CEO and senior staff and support them. But they also must remain objective because they hold a high public trust.

Find a strong and confident board leader, and ensure that he or she understands the role. Choose a leader who will pick up the can and lead your organization to great success.

Jeff Jowdy is the president and founder of Lighthouse Counsel and a member of the FundRaising Success Editorial Advisory Board. Reach him at jeff@lighthousecounsel.com