Nonprofit Board and Leader Relationship

Getting the Board and Leader Relationship Right

Getting the board of directors and nonprofit leader relationship right is the most important thing to get right in your organization!

The lack of board support has been identified as the "first or second reason why nonprofit CEOs are resigning in record numbers."* In addition, several studies also show that boards are increasingly unhappy with their nonprofit CEO - reporting that the CEO does not share power or only wants the board to raise funds.

All research agrees that a quality board is the single factor that best indicates the health of a nonprofit organization. By law, nonprofits must have a board. At The Foraker Group, we believe that not only do nonprofits need a quality board; they must have quality staff, led by a competent CEO. This combination gives an organization its best chance to become sustainable.

Since nonprofits need quality board and staff leadership, those leaders must determine how to work together, to share power. While there are many factors to ensure sustainability, the relationship between board and staff may in truth be the most difficult because it involves people. Let's face it - human relationships can be messy and unpredictable. Sometimes we misinterpret another's intent. When it comes to relationships, rules can help. But in the end, Margaret Wheatley, the noted organizational theorist, in her book called Turning to One Another says, "in the end people must learn to trust each other," and that can be a challenge.

Maintaining Health Board and Leader Relationship

In past articles, we have addressed board responsibilities, board/staff boundaries, and board and CEO selection. Today we discuss how boards and CEO's can develop and maintain a healthy relationship. This board-staff dynamic is the most important one to "get right."

While nonprofit staff leaders come with many titles, CEO-President-Executive Director-General Manager-Executive Secretary-etc., they all must have passion for the mission and management skill to survive. To be a truly great nonprofit CEO, one must also be excellent at developing and maintaining relationships. In practice, good nonprofit CEOs should develop and maintain a positive working relationship with each board member. But even if the CEO successfully manages all of those individual relationships, the relationship with the board's leader, the chair, is the most critical.

Everyone who has come to a Foraker training session should be familiar with the board's legal duty to "act as a deliberative body" - in other words, an individual board member has no power to act on behalf of the organization without a vote confirming such policy by a majority of the board. Another way we have described this rule is to "speak with one voice." In practice, most boards delegate some autonomy for speaking that voice to at least two individuals, the CEO and the chair.

The board hires and manages the CEO. Typically that relationship is a legal commitment. If either party were to not perform as expected, that legal commitment could be changed. While boards do not hire a chair, they elect someone they deem as the right person to lead on their behalf. If a chair does not perform in the best interest of the organization, the board can always elect another chair. For the organization to succeed the chair should always be a good leader for the board as well as a good partner for the CEO.

The nonprofit system has clear accountability for these two individuals. They can speak and act on behalf of the organization within the context of the policy and direction established by the board. When the board selects a chair they should look for the skills to balance the CEO's skills, and maybe more important, the commitment to work with the CEO on behalf of the board so that the organization can thrive. The chair and CEO must work in a close relationship to ensure each other's and the organization's success.

Unfortunately, in some cases the CEO and chair have little respect and trust for each other. This can lead to turmoil that filters throughout the organization and impairs overall progress. Other times, the CEO runs everything and the chair is absent, or under-utilized. In the best situations, the chair and CEO have a great working relationship and are able to work seamlessly on behalf of the organization.

Having served as a CEO for a few nonprofits, I confess that while a majority of the chairs have been as good as one could expect, I have had a few that were a challenge. Likewise, I would suspect some of them would report that I was a challenge for them. Today, we want to provide insight into steps to address challenging relationships and specific tools that could be used to develop a good board chair/CEO relationship.

Three Truths to bear in mind:

• It must be a true partnership - interdependence, trust, and respect are required for success.
• It may have emotional overtones since most chairs and CEOs have passion for the mission of the organization. Where passion exists, there is a potential for conflict that feels personal.
• Most times, the CEO will have the pleasure of working with a number of chairs. Frequently, as soon as the chair and CEO learn to have a balanced relationship, their partnership ends and the CEO must start all over, developing a relationship with the new chair.

Factors for success for any chair/CEO relationship must include:

• Commitment to work and renew the relationship. Like a marriage, these partnerships can never be taken for granted. Regular communication on important topics should be the norm.
• Board consistent at delegating duties, ensuring the CEO has a clear understanding of what is allowed.
• Board consistent at providing the CEO with clear "one voice" outcomes. No individual can work well if every member of the board demands unique expectations from the CEO.
• Cooperation from both partners, like all good relationships. Both the chair and the CEO must invest in its success if the relationship is to work.

Tools

From these factors, we would suggest specific tools to assist in a productive and supportive board chair/CEO relationship.

1st Tool - Healthy Boundaries. Every member of a team has a job description that outlines clear responsibilities. The board, chair and CEO job descriptions are integrated and complementary. Boards govern, staff manage -- boards ask what, staff decides how -- boards decide the end (the goal), staff the route -- what the board does impacts the organization, what the staff does impacts constituents. These simple boundary truths have been used in good governance systems for as long as I can remember, and still ring true. One tool for good boundaries is clear job descriptions.

2nd Tool - Look within, ask others for feedback. Marriage counselors observe that often when a couple comes for counseling, one partner has forced the other into the first session. It is often that initiator that expects the counselor to change some bad behavior of the other. However counselors often suggest that the best way to change the behavior of the other is to first look within -- when one changes, it results in a change in the other. The same dynamic is at work within a chair/CEO relationship. We think the best CEOs (and chairs) are those individuals with the most realistic understanding of themselves and of each other.

One technique to help with a troubled relationship is for one or both persons to understand more about themselves. Myers-Briggs is a popular test many consultants use that can help people identify communications styles. Other consultants interview colleagues to determine personal traits, especially how others see an individual. In my early mental health career, I was required to participate in psychotherapy as part of training. It helped me to not only know myself and become a better therapist -- it may have helped me with my current career, working with boards. Regardless of the method, self-knowledge is critical.

Another technique for self-reflection is the use of 360 (degree) evaluations. In this process, managers ask employees and sometimes other key stakeholders for feedback during the annual employee evaluation. When the board, as the manager of the CEO, does the CEO evaluation, the board should encourage the CEO's candid feedback on the board's performance. (Make sure the board does an "annual" review of the CEO, it may be the most important tool to use.)

An organization must have an open atmosphere for any employee to feel entitled to speak out since openness is crucial for effective communications.

However some boards mix 360 evaluations with the desire to ask others about their CEO's performance. When boards need feedback on the CEO from anyone except another board member, we encourage boards to use an independent expert to conduct and interpret interviews, especially if employee interviews are part of the process. When a member of the board interviews the CEO's colleagues or staff, it can damage a healthy trusting relationship between the board and CEO. More important, it could potentially violate board-staff boundaries. For example, if a board member interviews employees about their CEO's performance, it could result in a violation of the personnel policies. Since most personnel policies have a grievance procedure, when a board member goes directly to staff, they may learn of a grievance, even if they are just asking for general feedback. If they are not following the grievance policy, they could face a conflict of what to do with what they learn.

The only true 360 evaluations are when a supervisor asks a direct report for feedback. This is a good technique. When boards want to learn about staff or others' impressions about the CEO, we suggest that they seek professional help, and hire an independent consultant.

Jim Collins, in Good to Great, offers other key considerations for introspection and evaluation: The characteristics of a Level V Leader:

• Leaders in most powerful seats are more ambitious about the success of organization than personal success.
• Leaders praise others on their team when they succeed, but look at themselves when things don't work as expected.
• Leaders exhibit substance over style.
• And as a team, while vigorous debate and confronting facts are the norm, when a decision is made, the team supports the direction, even those who presented the differing opinion. And, if necessary, the team changes course when and if the direction proves to not be right.
• Organizations with the sensitivity of Level V Leadership typically use these and other tools for ongoing feedback and learning.

3rd Tool - Don't assume, discuss the issues that really matter and come to agreement. Research identifies that most board/CEO or chair/CEO relationships break down over disagreement on:

1. Mission
2. Core values
3. Judging success for organization and/or the CEO, or
4. Agreement, who does what

My wife and I went through a pre-marriage counseling process. It identified a few areas where most marriages fail, such as:

• Jobs -- who does what in the house as well as who does what for income
• Children -- how many how will they be raised
• Community -- where, how large
• Religion -- which and how much
• Money - how is it spent

We were asked to have discussions and come to agreement on these potential conflicts before we tied the knot. I remember we had a few hard conversations to reach consensus. Over the years we have changed our minds on some of our original agreements, but we did it together. One thing for certain, we have been married for 31 years, so I guess it worked.

Having frank conversations on the mission, values, expectations and boundaries would be a useful tool for any new or troubled CEO/chair relationship. For sure, a new chair should discuss these issues with the CEO to make sure everyone is on the same track.

4th Tool -- Direct communications (no triangulation). All good relationships have good, direct communication. The only way to achieve that is person-to-person. When others communicate for us, we not only send the message that we don't have enough respect for the other to speak for ourselves, we face the possibility that the message we send may not be clear. (Remember the telephone game we played as kids?) Triangulation, or bringing in a third person to communicate for us, should never be used. Since most people do not like confrontation, the use of various techniques to handle conflict could be necessary.

First try a face-to-face meeting. If it is too hard to meet with someone face to face, then we suggest ongoing-stepped communications where a finite agenda for each conversation is agreed upon. These conversations continue over a number of meetings until every issue is addressed. You may also use the simple technique of writing -- communication through correspondence can be a useful first step when there is conflict until those involved can meet face-to-face. Always be direct as possible.

But face it -- sometimes it is hard to be direct with some people. We may be too upset to communicate effectively. The other person may have a history of misinterpreting what we say. Sometimes we need help. With CEO/chair communications, we would suggest this sequence:

1. Direct, face-to-face or written communications;
2. If conflict continues, discuss the situation in confidence with another board leader and seek guidance on how to best approach the issue -- but don't ask for their personal intervention. Remember, we do not want to ever ask another to communicate for us.
3. Only after those steps have failed, and we can't just "wait out" the term, then ask another board member (or consultant) to meet with the two in conflict and mediate the issues.
4. If other techniques fail and neither partner can wait for the term to end, the conflict should be addressed by the board in executive session.

A bad relationship between the chair and CEO is toxic for the entire organization. Work to end such conflict as soon as possible.

5th Tool - Succession planning. Since boards, chairs and CEOs come and go, transition planning for everyone in an organization is not just a nice thing to do, it is a requirement to ensure ongoing healthy partnerships.

For the Board

Board transitions are best handled by a committee that strategically reviews board recruitment and performance. Foraker advises nonprofits to use a process to manage the board. A committee focused on governance develops job descriptions for the board, committees, and officers. It can also reflect on the characteristics needed by members of the board and then very early identify and cultivate prospects for the board. I remember when we thought being strategic meant we identified the incoming board chair. Today we not only need to identify the next two chairs, we should develop a waiting list for every seat on the board.

For the Chair

Chair transitions are often done with little forethought. While we have been identifying the "chair-elect" for many years, we have not been consistent on how these leaders are chosen. A few techniques we regularly observe include:

• Promoting the vice chair.
• Electing whomever volunteers.
• Nominating chairs when they are not at the meeting to defend themselves. We really hear this all the time!
• Asking candidates to run for the office.
• Keeping the good ones as long as possible.
• Having the "bishops" go into a sequestered room and debate the transition until they send out the white smoke.

While we would greatly discourage many of these techniques, each organization should reflect on how it successfully chooses its chair. We recommend that each board start with developing a consistent process, and then review how it works and adjust as needed, at least every 5-10 years. Because it is a key position, we should recruit a chair 4-6 years out. Recruit the chair early. Good chairs need time to prepare for this significant opportunity. We would also suggest that while it is not the CEO's responsibility to select the chair, we encourage every board to ask for the CEO's perspective when they select the in-coming chair.

Regardless of the process, here are two thoughts about the characteristics needed for good chairs:

The chair must be a good facilitator. The chair is responsible for managing effective meetings -- skill as a facilitator is a requirement, and The chair must have the desire to work with the CEO as a partner.

For the CEO

We hope CEO transitions occur less often. But if not done well, they can have a negative impact on the organization. The most important job of any board is to select and then work with their CEO. While the current CEO should develop internal staff, the current CEO's only responsibility for the future is to have enough talent on the bench to ensure the organization can maintain programs while the board selects a successor. Sometimes one of the current staff members will apply for the CEO position. Other times the board will also look outside to find the next CEO. A few techniques on managing CEO transitions include:

The key question for the CEO during every year's performance evaluation: "How long are you going to stay in this job?" It is a reasonable question for such a critical position. Development of a formal board approved CEO transition plan including strategies on how the organization will deal with a planned transition, as well as an unexpected transition. A formal employment contract for the CEO with an end date for review. Selecting a new CEO is the entire board's job, but the incoming chair(s) should have significant comment on their new partner in the same manner that the CEO should have comment concerning the incoming chair.

Building good relationships between the chair and CEO is the most important thing for the organization to get right.

Conclusion

A few closing thoughts that may help with conflict, something we see too often:

1. Use the tools we identified as a vision of how the relationship could be.
2. In most partnerships, each partner must equally share responsibility for success. However, my experience and advice is that it is ultimately the CEO's responsibility to change first. Remember, the chair is a volunteer -- the CEO is paid to lead the organization.
3. When a CEO/chair conflict persists and the CEO and chair have used the tools for communications without the desired result, ask for outside mediation. (Foraker provides this service.)
4. If all of these attempts fail, then the board should decide if the chair or CEO should be asked to leave, or maybe one will just resign for the good of the organization.

We hope you and your partner never have to make that last decision.

• From Timothy Wolfred, Leadership Lost: A Study on Executive Director Tenure, March 1999

Author

The author of this article is Dennis McMillian.

Dennis McMillian is President and CEO of the Foraker Group.

Dennis has devoted his professional career to helping nonprofit organizations better meet the needs of their communities. For 21 years he served as a development officer, and then as a CEO with United Way in numerous communities around the country. He came to Alaska in 1992 to lead the United Way of Anchorage. Since moving to Alaska, he has helped build the state’s philanthropic infrastructure through his work with United Ways across the state and through his support in developing the Alaska Community Foundation. He is a strong advocate for Alaska’s nonprofit sector.

In 2001, Dennis led the effort to start The Foraker Group with the mission of building sustainability and organizational capacity in Alaska nonprofits. During his career, he’s trained thousands of professionals and volunteers, spoken at numerous conferences and consulted across America, Canada, Asia and Russia. He serves on numerous national nonprofit committees and is a regular speaker at conferences including The Council on Foundations, Tides Foundation, Philanthropy Northwest, and the National Council of Nonprofits. He sits on the board of Nature Conservancy in Alaska, and on the national boards for Camp Fire, Inc., the Alliance for Nonprofit Management, and the National Council of Nonprofits.