The Nonprofit CEO Exceeds The Authority Boundary – What Happens Then?
By: Eugene Fram
Viewer Favorite Updated & Revised
It happens! When it does, it’s the board’s job to inform the CEO that he or she has taken on too much authority. As a board chair of a human service nonprofit, I encountered such a situation. The CEO signed a long-term lease contract on his own that should first have been approved by the board. The financial obligations involved weren’t significant. When the CEO recognized his error, I then asked for formal board ratification. None of us does out jobs perfectly. But a CEO has to recognize the board’s ultimate authority for long-term contracts and similar issues, even when the financial obligations are insignificant. Obviously, if the CEO continually takes such actions, there is a serious communication problem. (more…)
The nonprofit governance model outlined in “Policy vs. Paper Clips” has served my organization extremely well for more than two and a half decades. The proof of the model’s value is the growth and performance of our organization, our respected stature in the community (and beyond), and our ongoing ability to recruit top talent to our Board. Our Board governance structure has made possible several bold decisions over the last 30 years that have changed the trajectory of our organization.
Thirty years ago I was a brand new leader of a not for profit agency in Rochester NY with an annual budget of $5M and 160 employees who served 800 clients a year throughout 5 counties. Today, I am still the CEO; however it is a very different agency, having expanded its services significantly, broadening the populations we serve throughout 35 counties with a budget of 37M and 800 employees with a much bigger impact of 150,000 clients served annually. I feel very fortunate that early in my agency career that the book’s author (then a respected professor at a major university in my city) accepted my invitation to come talk to my Board about the model and its advantages for our nonprofit.
We adopted the model soon after and ever since it has defined our governance structure. We’ve only made one modification (creating a separate audit committee) because it was required by state regulations. Here’s why I think the model has been so powerful for us:
• The basic premise that the Board and CEO are partners who mutually respect each other’s roles is paramount to our success.
• The Executive Committee serves as the “steering committee” and sets the Board’s annual agenda and priorities, and fulfills the key role of being the CEO’s “sounding board.”
• Our lean committee structure (Assessment/Planning and Resources) allows for substantive discussion on important issues. Board members who aren’t officers have only one commitment and can devote both time and attention to their committee’s mission.
• As CEO, I work very closely with the Executive Committee to ensure the right leadership is selected to serve in officer roles. The Executive Committee also provides “succession” for senior Board leadership. Typically committee heads are groomed for Board Chair, though this position can also be filled from other officer roles.
I’ve lived the model for a very long time and happily attest that it works!
Gidget Hopf, Ed.D, President/CEO at Association for the Blind and Visually Impaired-Goodwill of Greater Rochester
Can A Nonprofit Find Strategic Ways To Grow in Unsettled Times?
By: Eugene Fram Free Digital Image
Viewer Favorite: Undated and Revised for Current Conditions
Nonprofits have always had to struggle to meet their client needs, even when economic conditions and social turmoil were much less constraining than today and they have dim prospects for the next four years. How can mid-level nonprofits uncover growth opportunities in the present environment? (more…)
Nonprofit Board Discourse: a Meeting of the Minds??
By: Eugene Fram
Several years ago, a nonprofit director complained to me that there was too little “conflict” at board meetings. Too few hands were raised to challenge or simply question the efficacy of certain important agenda items. Having participated in hundreds of nonprofit meetings, I can vehemently report that this laissez-faire response still typifies the majority of director attitudes, especially for items that deserve vigorous discussion. Why is that? And why is the term conflict perceived as an asset to an organization that is determined to move forward? Below are some answers based on my own experience in the nonprofit environment. (more…)
Resolution for 2017—Focus on Long-Term Nonprofit Sustainability
By: Eugene Fram Free Digital Photo
Nonprofit boards, like their business counter-parts, can become complacent and lose their vitality. This sets the stage for nonprofit disruptions by the social and technical environments that surround them. Following are some crucial priority questions (listed in bold) that have been raised for business boards. * They easily can be modified to drive the thinking of nonprofit directors and help them keep nonprofits sustainableand productive.(more…)
Gene Takagi, noted San Francisco attorney, who specializes in nonprofit organizations published an article listing 12 reasons for resigning from a nonprofit board. It is worth reading. (http://bit.ly1r2M5Hi)
Nonprofit directors often become impatient with the slow pace of progress toward positive changes that will impact client services. Here are some actions that may change the situation, improve service to clients and prepare the organization for any long-term mission disruptions. These changes may be necessary to sustain the nonprofit in uncertain times. (more…)
Once Again! Do Nonprofit Directors Face Cyber Security Risks?
By: Eugene Fram Free Digital Photo
Viewer Favorite: Updated & Expanded
The cyber security (CS) debacles faced by Target, Sony Pictures and others may seem far afield from the concerns of nonprofit directors, except for the giants in the area, like AARP. However, think about this hypothetical scenario.
A group of high school students hacked into the computer system of a local nonprofit offering mental health services and gain access to records of clients, perhaps even placing some of the records of other teenagers on the internet.
What due care obligations did the board need to forestall the above situation? A move to recruit directors with special expertise in information technology or cyber security would be nonproductive. A nonprofit director has broader responsibilities such as the overview of management, approval of budgets, fostering management and staff growth etc. Similarly, when social media became a prominent issue a few years ago, boards debated the advisability of seeking directors with that specific kind of background. Today, a consultant with management experience in the area is likely needed to provide guidance to directors on these social media issues.