The Nonprofit CEO–How Much Board-CEO Trust Is Involved?
By; Eugene Fram Free Digital Image
The title, CEO for the operating head of a nonprofit, clearly signals to the public who has the final authority in all operating matters and can speak for the organization.* .
The CEO designation calls for an unwritten trusting contact with the board based on mutual respect, drawing from the symbolism that he or she is the manager of the operating link between board and staff. It is a partnership culture. However, a solid partnership does not allow the board to vacate its fiduciary and overview obligations. The board has moral and legal obligations to “trust but verify” and to conduct a rigorous annual evaluation of outcomes and impacts CEO has generated for the organization.
While the trust the board has in its chief operating officer can’t be described in exact quantitative terms, viewing it through the lens of a set of CEO and/or Board behaviors can provide an idea that a significant level of trust is involved in the relationship.
Following are some of the behaviors that signify a trusting partnership is in place:
Nonprofits:”What Role Should Board Members Play in Overviewing Management /Staff Talent?”
By: Eugene Fram Free Digital Image
Nonprofit boards rarely develop an in-depth strategy for assessing its organization’s human capital. Some will keep informal tabs on the CEO’s direct reports to prepare for the possibility of his/her sudden departure or is incapacitated. Others –smaller organizations with fewer than 20 employees—need only a basic plan for such an occurrence.
Need for Strategy: In my view, maintaining a viable talent strategy to assess staff and management personnel is a board responsibility, albeit one that is often ignored. The latter stems from the constant turnover of nonprofit members whose median term of service is 4-6 years—hardly a lifetime commitment. Like for-profit board members whose focus is on quarterly earning results, their nonprofit counterparts are likely more interested in resolving current problems than in building sufficient bench strength for the organization’s long-term sustainability.
An analysis of the current pandemic environment should be a clarion call for nonprofit board members. It can be summarized in a couple of sentences:
Great crises tend to bring profound social changes, …. . We seem to be at another point when society will make adjustments for good or ill. *
As nonprofit board members or managers, are you ready to identify and confront these adjustments as they already have developed or will challenge your nonprofit within the next 10 years? Hopefully, a large portion of nonprofit boards will accept the challenge and begin strategic planning for the post Covid 19 period now!
Board Challenges – Post Covid-19
As I view the situation, the pandemic has already brought about changes in four areas that can impact the long-term sustainability of a nonprofit. There are others that can be added to my four, for example Fund Development—but this topic has been well covered elsewhere.
Advocacy for Post Covid 19 needs to be more than an occasional Tweet or two. Some nonprofits will continue to advocate for issues that relate to its mission, vision and values. But they may have to take substantial stands on broader topics.
With 5G communications expanding the connections in the world, the post Covid-19 period will present opportunities for nonprofits to advocate, where appropriate, on social topics that may not be strictly germane to their mission—e.g., health care, social justice and “Me Too” issues.
At the least, each nonprofit should have reviewed policies that enable management and boards to respond quickly to pandemic generated movements that are not currently on the horizon.
Board members have an obligation to make certain critical information is secure. It requires more specific policies than the requirement to have an insurance policy in the event a hacker steals a membership list.
Developing these policies requires some basic IT knowledge. If some board members need a “review” of these basics, the board should offer an educational opportunity to upgrade their knowledge.
Generation Z (Gen Z)
Gen Z, born between 1995 and 2015 (2020 in some reports) has already started to impact the workforce. The Gen Z population is currently 86 million and is expected to grow to 88 million in the next 20 years due to migration. **
In comparison with the millennial cohort, Gen Z:
Wants more autonomy and independence. A Gen Z staff will readily accept positions that allow them to work from home, especially if it yields a healthy work-life balance. This will cause nonprofit boards to review policies related to office space requirements while evaluating “at home” productivity. Some staff may choose to be located elsewhere in the United States or internationally.
Are less team-oriented than millennials. Being more competitive than the previous generation, financial compensation is more important. They have been raised in some difficult economic times, and their Covid-19 experiences will no doubt heighten their motivations to seek higher financial compensation. To engage the best and the brightest of the Gen Z cohort at nonprofit salary scales, organizations will have one other major attraction. Nonprofits are mission (or purpose) driven, “Showing the positive impact their work will have on society can be (an attraction) for Gen Z when it comes to choosing a job.” ***
Cultural or Technical Vulnerabilities
These are the challenges that may be in an infant stage but can have significant impact on the organizations polices. The March of Dimes movement changed its focus to healthy moms and strong babies after the development of a polio vaccine. As psychiatric drugs improved, the boards and managements of a number of face-to-face counseling nonprofits declined or they broadened their missions. After simmering for years, the “Me Too” movement has caused colleges and universities to be modify their policies, sometimes in a rapid manner.
Many of these vulnerabilities can emerge quickly and affect a nonprofit’s sustainability. CEOs should lead with a visionary manner and boards need members who can think broadly to respond with financial or intellectual support. This process has been described by a Harvard Law publication as future-proofing.**** “This involves thinking though the impact of today’s changes on future outcomes andfuture needs.” The authors admit asking management to take on this planning effort within unprecedented uncertainty may hinder its ability to react short term. But they feel it is worth the risk to provide the challenge to management’s long-term thinking.
Must Nonprofits Develop Employee Benefits That Substitute For Annual Raises?
By: Eugene Fram Free Digital Image
An analysis in the Washington Post reports that a tsunami-style change has been taking place in the manner in which United States employees are being paid—benefits are being offered in place of annual salary increases. (http://wapo.st/1MwoIBZ) Driving the change are the needs of a substantial portion of millennials who appreciate immediate gratifications in terms of bonuses and perks, such as extra time off and tuition reimbursement. Employers like the arrangement because they can immediately reward their best performers without increasing compensation costs. Example: One sales employee spent weeks reviewing dull paperwork, was very diligent in the process and was given three extra days of paid leave. She said, “I think everybody would like to make more, but what I liked about it was the flexibility.”
Nonprofit board members often become frustrated with the moderate pace for change that is characteristic of nonprofit boards. Most resign or remain on the board as passive directors, not wanting to create internal conflict in organizations that are dedicated to developing positive programs. Here are some qualifications for unusual board members that want to become change agents and lead boards and/or organizations to making substantial positive changes. * (more…)
Most nonprofit boards are being faced with huge pressures—reduced financial support, challenges in integrating new technologies, recovering from Covid impacts and difficulties in hiring qualified personnel who will consider “nonprofit” wages. To survive long term, board members need to be alert to potential opportunities. These may be far from the comfort zones of current board members, CEOs and staff.
Once Again: How to Keep Nonprofit Board Members Informed.
By: Eugene Fram. Free Digital Image
With high performing nonprofit organizations, board members will rarely be invited by the CEO to participate in operational decisions. As a result, management will always have more information than board members. Yet the board still needs to know that is happening in operations to be able to perform their overview process. The name of the game is for the CEO to communicate the important information and to keep board members informed of significant developments. Still, there’s no need to clutter regular board meetings by reporting endless details about operations.
Once Again! Nonprofit CEO: Board Peer – Not A Powerhouse
By: Eugene Fram Free Digital Image
Some nonprofit CEOs make a fetish out of describing their boards and/or board chairs as their “bosses.” Others, for example, can see the description, as a parent-child relationship by funders. The parent, the board, may be strong, but can the child, the CEO, implement a grant or donation? Some CEOs openly like to perpetuate this type of relationship because when bad decisions come to roost, they can use the old refrain: the board made me do it.
My preference is that the board-CEO relationship be a partnership among peers focusing on achieving desired outcomes and impacts for the nonprofit. (I, with others, would make and have made CEOs, who deserve the position, voting members of their boards!)
Wanted: Nonprofit CEOs with Entrepreneurial People Skills
By: Eugene Fram Free Digital Image
The need for superior leadership skills is as critical to CEOs in nonprofits as it is in the entrepreneurial world. Following are four such skills and the unique challenges they bring when employed in the nonprofit environment. *