Board-Staff Relationships: For-Profits Take Cue From Nonprofit Model

Board-Staff Relationships: For-Profits Take Cue From Nonprofit Model

By Eugene Fram

The hierarchy-organized business is declining in importance. Senior business CEOs, as board members and senior managers, are now blogging or tweeting messages directly to staff. The two founders of Google have frequent company-wide forums that personally or electronically allow every employee to address direct questions to the founders.

While these changes are new in business environments, informal and formal relationships between nonprofit boards and staffs have been in place for decades. It’s an important factor in the success of a nonprofit because the staff must understand the board’s depth of commitment to the nonprofit’s mission, vision and values. Also the staff may only be one or two organizational levels away from the board.

Most importantly, many of the staffs are directly motivated by their commitments to the nonprofit’s mission. One highly able nonprofit staff person I know, dedicated to helping foster children, stayed with her nonprofit job—supporting her daughter in medical school while her husband was unemployed for 18 months.
Following are what board members need to do to keep this motivational benefit at a high level:

• They need to participate in celebrations of organization successes and other social events, in order to show appreciation for what the staff has accomplished.
• While the CEO must be the nexus of communications between the two groups, it should not be unusual for board members to meet informally with senior staff members or other key staff personnel. Of course, the CEO must be apprised of these meetings and their outcomes. There is always the inherent danger that some staff members will try an “end-run” to the board, circumventing the CEO, when they are dissatisfied with a salary or position. For an able CEO, it is a danger that comes with the territory and has to be anticipated with new board members ahead of time.
• Staff input is crucial for major decisions, and staff members need to interact with board groups in conducting major program reviews. The CEO needs to strive to create an atmosphere in which staff members feel free to express opinions in these reviews. At the university level, the process is called “shared governance.”
• When confronted with a particularly difficult issue, an excellent means of communication is a board/staff workshop. Such a workshop brings board and staff members together in a more relaxed setting. The interaction between the two groups enhances the quality of decision-making.
• There are also secondary benefits, as a workshop enhances professional communications between board and staff and engages board members in meaningful hand-on projects.

BTW: Nonprofit organizations need to share their experiences with small and medium sized businesses. Many of these are new to the relationship between board and staff. For example, board members of a chemical firm might want to personally interact with senior chemists developing a new product that has a significant investment behind it. This is a for-profit relationship that a board member would never have considered prior to the experiences of Enron,, and then subsequently suggested by Sarbanes-Oxley.

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