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 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. Some include: (more…)

Nonprofit Board Members—Are They Aware of Their Independent Director Duties?

Nonprofit Board Members—Are They Aware of Their Independent Director Duties?

By Eugene Fram

The vast majority of nonprofit board members serve as independent directors. They are not members of management, have other occupations as their major focus, but have some significant responsibilities to a community, profession, government or trade association. Mary Jo White, Chair, U.S. Securities & Exchange Commission, recently outlined the responsibilities of fund board members who also are independent directors to overview the investment dollars made by 53 million U.S. households. Many of her comments, in 2016, easily apply to nonprofit board members and their responsibilities as Independent directors. Note: The italicized materials following are White’s direct quotations. * (more…)

Enlarging the Nonprofit Recruitment Matrix: The art of selecting new board members—Part II

Enlarging the Nonprofit Recruitment Matrix: The art of selecting new board members—Part II

By: Eugene Fram

There’s never enough to say about the selection of nonprofit board members. Following my last post on board behaviors and cultures I ran across a guide fo desirable skills/abilities for “for-profit” directors. From this list, I suggest the following additions to the recruitment matrices of 21st century nonprofit board candidates to improve board productivity. * Those included will have: (more…)

Want Better Nonprofit Board Cultures? Look for Four Behaviors–Part I

Want Better Nonprofit Board Cultures? Look for Four Board Behaviors–Part I

By Eugene Fram

Board cultures can be difficult to modify or change in for-profit and nonprofits. A new McKinsey study demonstrated the strength of the board culture in three different levels of board operations—ineffective, complacent and striving. * Differentiated achievement seems to be largely dependent on four behaviors. (See bold type.) Centered on my experiences, they can be applied to nonprofit boards. At the least, the behaviors can motivate considerations for board modifications. (more…)

CEOs Need To Develop Partnering Relationships With Board Members

 

 

CEOs Need To Develop Partnering Relationships With Board Members

By Eugene Fram               Free Digital Image

When a CEO publicly introduces a board member as “my boss,” (as I have overheard more than once) there is a problem. It’s true that both parties—CEO and board member—have specific roles in the success of a nonprofit organization. But the hierarchy of authority should be deemphasized when it comes to interpersonal connections. The most effective mindset for CEO and directors is to view each other as partners in working to achieve the organization’s mission and their impacts.

The CEO’s efforts to cultivate such relationships are key. The following are some initiatives that he/she can utilize: * (more…)

Nonprofit Chief Executives Should Have Title: President/CEO, Updated and Expanded

Nonprofit Chief Executives Should Have Title: President/CEO, Updated and Expanded
This post, over several years, has developed a record of continued viewing interest. Rarely a day passes in which the data doesn’t include one or two views, or occasionally a day in which the viewer’s data rise to five. For example, when previously updated in 2014 there were 274 post views, during 2015 there were 57 views and in the first three months of 2016 there were 27 views, indicting that the number may pass that of 2015. Perhaps the controversial nature of topic causes the longevity of interest

When nonprofit organizations reach a budget level of over $1 million and have about 10 staff members it is time to offer the chief operating officer the title of PRESIDENT/CEO. In addition, the title of the senior board volunteer should become CHAIRPERSON OF THE BOARD, and the title of EXECUTIVE DIRECTOR needs to be eliminated. Experience has shown that with a reasonably talented PRESIDENT/CEO at the helm, he/she can provide the following benefits: (more…)

Trustee Responds to Charge of Being Willfully Blind or Incompetent!

Trustee Responds to Charge of Being Willfully Blind or Incompetent!

By Eugene Fram

The organization in which Andrew Purkis served as a trustee had been dissolved. Purkis and his colleagues were cited as “…willfully blind or incompetent.” * Such strongly negative pronouncements inspired him to write an essay in which he listed four reasons why his British group had been unsuccessful in exercising their oversight responsibilities.

A review of his rationale provides some fodder for American nonprofit directors/trustees to consider the reasons that led to his organization’s downfall– and more importantly, to assess their own board strengths and vulnerabilities. The following, in my opinion, are areas that have relevance to the Purkis exposition.
 (more…)

Beyond the Bylaws: A Clarification of Nonprofit Board Responsibilities–Revised and Updated

Beyond the Bylaws: A Clarification of Nonprofit Board Responsibilities–Revised and Updated

By: Eugene Fram

A nonprofit director’s duties may be much more difficult than those of a for-profit board member. Both types of directors have the same basic duties: fiduciary responsibilities; establishing, with staff input, mission vision and values; setting policies/strategies; over-viewing outcomes/impacts and conducting annual meetings.

I suggest nonprofit directors may not be fully addressing some duties specified in the bylaws and some which are culturally driven. This latter group might be called “latent duties.” (more…)

Radio Program Tomorrow–March 11th.

You may find this radio program in which I am interviewed of interest.

http://tonymartignetti.com/2016/03/nonprofit-radio-march-11-2016-policy-vs-paper-clips/?utm_campaign=shareaholic&utm_medium=twitter&utm_source=socialnetwork

Do Nonprofit Boards Neglect Oversight of Internal Leadership Development?

Do Nonprofit Boards Neglect Oversight of Internal Leadership Development?

By: Eugene Fram

Although the nonprofit CEO is charged with nurturing the development of his/h staff, the board is responsible for over-viewing the process. Research evidence shows both board and management are neglecting their duties in regard to this responsibility. Only 30% of nonprofit CEO positions are filled internally, a rate that is about half the rate of for-profit organizations. * The same research shows that, “Hiring the more (internal personnel) can improve performance at the two-year mark by 30%.” These data are even more troubling when roughly related to those of large corporations that concluded that 40% of those hired from outside the organizations are replaced within 18 months. **

Why Are Nonprofit Boards Not Paying Enough Attention?

• Board Turnover: The most common board structure is two consecutive 3-year terms. Board chairs most commonly serve two consecutive 1-year terms. This in itself can easily create a “short term” board culture. Board members and chairs know they have relatively short tenures and may want to take actions that show more immediate results. Leadership development can be the antithesis of such actions. It takes time and nurturing.

• The Board-CEO Relationship: Nonprofit boards, as conservators of the organizations assets, are often hesitant to remove an incumbent CEO, sometimes, even when the person has been involved with nefarious activities. Consequently, many nonprofit CEOs are what I call “mind-the-store” types. They have small growth percentages each year, have their financial processes in order, but fail to have competent subordinates who are capable of promotion. As a result, those board members who want to establish a culture for leadership growth have to wait for the incumbent CEO to leave or retire. Most board members, as volunteers, fear the interpersonal conflict and added time commitment that follows a board initiated CEO termination. As a result, all plans for change, such as leadership development, can’t thrive without the active support of the CEO.

• The CEO’s Comfort Zone: Few, if any nonprofit CEOs I have encountered take pride in reporting that some of their direct or indirect subordinates have left for substantial success elsewhere. Many currently who have risen in the organization from a line position have had to acquire newer management skills. Consequently, less qualified incumbent CEOs may view more able but less experienced subordinates as a career threat, and they have little interest in promoting leadership development.

Moving Leadership Development Into a Nonprofit Culture

A board member who serves for six years can have some opportunities to introduce leadership development into a nonprofit organization’s culture:

• When Interviewing A CEO Candidate: Ask about leadership development in prior jobs. Ask the candidate about his/h most outstanding direct report and the most problematic one. Look for answers relating to pride in developing subordinates and for engaging able younger managers
throughout the organization. Also ask references about these issues.

• A New Strategic Plan: Have the board agree with the CEO that leadership development is critical at all levels and establish some modest mutual objectives to begin the process of introducing a new strategic plan.

• When The Lack of a Process Affects the Nonprofit’s Impacts: Establish leadership development as a major CEO objective to be accomplished within a reasonable time frame. Seek a new CEO, if the person fails to perform.

Younger people often seek careers in nonprofit organizations because they want to contribute to the lives of others or to the social welfare of the greater community. After some years of direct service experience, some may discover they have leadership potential. Without a leadership development culture, nonprofits will lose these able persons to the for-profit sector, for better financial rewards, or find they will become staff persons who do their job adequately but look other outside activities, like political office, to satisfy their leadership ambitions.

* http://hbr.org/2015/12/nonprofits-cant-keep-ignoring-talent-development
** Ibid.