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Policy vs. Paper Clips

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem

By: Eugene Fram

An updated and revised viewer favorite post

At coffee recently a friend serving on a nonprofit board reported plans to resign from the board shortly. His complaints centered on the board’s unwillingness to take critical actions necessary to help the organization grow.

In specific, the board failed to take any action to remove a director who wasn’t attending meetings, but he refused to resign. His term had another year to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of directors decided such action would hurt the director’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action.

In another instance the board refused to sue a local contractor who did not perform as agreed. The “elephant” was that the board didn’t think that legally challenging a local person was appropriate, an issue raised by an influential director. However, nobody informed the group that in being “nice guys,” they could become legally liable, if somebody became injured as a result of their inaction.

Over the years, I have observed many boards with elephants around that have caused significant problems to a nonprofit organization. (more…)

Does the Nonprofit CEO Need to Go?

Does the Nonprofit CEO Need to Go?

By: Eugene Fram

Viewer Favorite– Revised & Updated

Recognizing and acknowledging that the current CEO is no longer helpful to the nonprofit organization is never easy to come by. Beyond malfeasance and under-performance, obvious reasons for initiating such a discussion, there are often other indicators: his/her modest leadership skills, ineffective discussions between the CEO and the board chair, criticism from external stakeholders, overemphasis on tactics unbalanced by a focus on strategies, etc. (more…)

Can Small Experiments Test Nonprofit Strategic Validity?

Can Small Experiments Test Nonprofit Strategic Validity?

By: Eugene H. Fram

When given a series of potential mission changes, modifications or opportunities, most nonprofit boards take the following steps: (1) Discuss alternatives (2) Develop working plans, board/staff presentations and funding proposals (3) All three usually are packaged into a three or five year strategic plan for implementation. Typically the process can take about six months to “get all stakeholders on board.” When something new is suggested, the conservative board and nonprofit management immediately respond, “Great idea, let’s consider it in the new strategic plan.” Results: It can take three to five years to implement the idea, assuming the plan actually gets off the shelf, not an unusual occurrence for nonprofit organizations!
(more…)

Must Nonprofits Develop Employee Benefits That Substitute For Annual Raises?

Must Nonprofits Develop Employee Benefits That Substitute For Annual Raises?

By: Eugene Fram

A recent analysis in the Washington Post reports that a tsunami-style change is talking 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 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 paper work, 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.” (more…)

Can Nonprofits Boards Build Peer-To-Peer Relationships?

Can Nonprofits Boards Build Peer-To-Peer Relationships?

By: Eugene H. Fram

There have not been any nonprofit authoritarian-visionary leaders like Apple’s Steve Jobs. Successful nonprofits are built by developing peer-to-peer relationships between the board and management, with the latter group representing operational leadership of the staff.

But building peer-to-peer relationships continue to be an Achilles heel for nonprofits for the following reasons.

Internally Boards Have
• Agendas that tend to be packed with operational reports and items.
• A continual parade of new board members entering the board scene to meet rotation requirements.
• Responsibilities that are secondary to directors’ primary vocations interests.
• Officers who are constantly changing. Many volunteer presidents and board chairs only have one-year terms.
• Many directors who live time-compressed lifestyles, and may face significant challenges in fulfilling their board obligations. (more…)

The Outside Advisory Board: Boon or Bother to Nonprofit CEOs?

The Outside Advisory Board: Boon or Bother to Nonprofit CEOs?

By: Eugene Fram

I have established or served on a number of nonprofit outside advisory boards. As a result I strongly recommend their usefulness to nonprofit CEOs. The counsel provided by a group of unaffiliated members of the community or industry will, in my opinion, complement the existing board, helping to deliver services or products to clients with greater effect. The objective of assembling such a body would be to seek advice and expertise regarding a current major project or issue and/or to provide ongoing support and guidance to the CEO. Advisory board members have no legal responsibilities, nor have authority to require the elected board or staff to act on its advice. However, when advice is not followed, the CEO has a professional responsibility to show how the suggestions were seriously considered and to carefully report on what had transpired in making the decision process. Too many useful volunteers become disillusioned with advisory committees when this step is omitted. (more…)

Nonprofit Boards: Using Core Business Principles Yield Good Entrepreneurial Results?

Nonprofit Boards: Using Core Business Principles Yield Good Entrepreneurial Results?

By: Eugene Fram

Every few years a business change appears that is presented as a quick fix to make business organizations highly productive. These have included process re-engineering, total quality management and matrix management, all without long-term success in either the for-profit or nonprofit sectors. However, entrepreneurship, which some directors may see as “the trendy fix of the month,” needs to be given serious consideration. (more…)

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

How Often Do Nonprofit Board Members Need to Question Strategic Norms?

By Eugene Fram

A new nonprofit director has a lot to learn. Considering that his/h term of service will be relatively short (typically four to six years), he/s must quickly learn the “ropes” to participate in a meaningful way. In this process, colleagues and leadership will acquaint him/h with prevailing board systems and culture—often ignoring the depth of expertise she/h can employ. Example: An expert in financial strategies may be asked to assist the CFO with accounting details, far below the person’s skill level. Oftentimes the new board member also is greeted with a mantra that says, “We’ve always done it this way.” As the director moves in his path from novice to retiree, during a short tenure, there is little opportunity to suggest innovations that differ from the accepted fundamentals and to successfully advocate for change. (more…)

Want To Avoid Nonprofit Fraud? Look To Your Board For Action

Want To Avoid Nonprofit Fraud? Look To Your Board For Action

Viewer Favorite: Updated & Revised
Original Publication: https://www.snpo.org/redir/articles.php?id=1752

By Eugene Fram with accounting professor Bruce Oliver

(The executive director acknowledged working with the insurance agent.) Under their scam, the council paid inflated insurance premiums and (the two) split the over-payments.
“I knowingly helped steal more than $1 million … as part of a scheme in which insurance premiums were inflated,” (The ED) told a judge in Supreme Court, the trial level court in New York State. (http://bit.ly/1QeakRt)

Here is what nonprofit board members can do to help reduce fraud in their organizations. (more…)

Can A Board Member Ever Wear Two Hats?

Can A Board Member Ever Wear Two Hats?

By Eugene Fram

Although this is not a good idea for nonprofit organizations, it is not an unusual occurrence, especially among start-ups. A director in a start-up nonprofit will need to assume some staff responsibilities as a volunteer. But he/s will need to organizationally report to the CEO. (more…)