Can A Nonprofit Organization Have A President/CEO & An Executive Director?
By: Eugene H. Fram
Yes, if the organization has the following structure:
Board With A Volunteer Chairperson
President/CEO With Full Authority for Operations
Executive Director for Division A
Executive Director for Division B
However this structure can be confusing to persons in the nonprofit arena. (more…)
Do Nonprofit Board and For-Profit Boards Face Similar Major Challenges?
By: Eugene Fram
The answer is Yes! Although the nonprofit’s objective is to develop maximum impact for its mission, while the business organization wants to maximize shareholder returns, a listing of current major challenges by Deloitte Touche Tomatsu indicates the two types of boards face similar challenges*
1. Overseeing enterprise risk management
Many nonprofits facing reductions in financial support must make heartbreaking choices between focusing on financially viable programs and dropping needed programs. Fraud is a continuing concern for nonprofit directors, both from a reputational standpoint and potential personal liabilities. Developing new competitive services and products continues to be a top priority for business concerns.
2. Focusing on executive compensation programs and related regulations
Regulators and media outlets are focusing on outsized salaries for some top managers in both nonprofit and for-profit organizations, especially where nonprofit and commercial organizations are in the same field, e.g., health care. Increased governance attention to the expanded IRS form 990 and to the Intermediate Sanctions Act, covering granting illegal excess benefits, are challenges for nonprofit boards. I have noted that many volunteer directors and nonprofit executives are unaware of the latter piece of legislation.
3. Ensuring corporate strategy will achieve long-term value creation
Numerous nonprofit and for-profit reports indicate both type of boards need to focus more on strategic planning. Both types of boards are wrestling with the problems of making investment decisions about emerging technologies.
4. Addressing heightened levels of shareholder (stakeholder) activism
Nonprofit stakeholders, such as foundations, are expecting grantees to show impact results for their financial grants. Both types of boards are expected to respond to environmental and business sustainability concerns, whether they be forest conservation or child obesity.
Conclusion: A board is a board is a board … The Major Challenges Are The Same!!
* Deloitte Touche, Tomatsu (2014) “Selected Challenges for Boards of Directors in the Current Environment”
How Does Your Nonprofit Retain Termed-Out Board Members?
Nonprofit board members whose terms have expired are typically recognized at annual meetings with gifts, plaques or certificates of service. In many cases, this is like saying, “Here’s your hat—there’s the door.” Rarely does the organization have a plan for continuing to connect with these folks, many of whom represent significant assets – i.e. talent and expertise – that can be meaningful to the organization for years. For the very best among them, there is no guarantee that replacements will have the same or superior skills and talents.
Here are some new and established ways to keep them engaged or to reengage those who have drifted away from the organization.
http://www.huffingtonpost.com/eugene-fram/how-does-your-nonprofit-r_b_5393736.html
Governance arguably suffers most … when boards spend too much time looking in the rear view mirror and not enough scanning the road ahead. *
It has been my experience that nonprofits rarely address the possibilities and perils of “…the road ahead.” …. Here are some “prompts” that might guide nonprofit board members and CEOs as they attempt to provide leadership in this important but often neglected area:
http://www.huffingtonpost.com/eugene-fram/is-your-nonprofit-forward_b_5101415.html
Nonprofit Board Recruitment: Can Google’s Process Apply to NFPs?
Following are Google’s hiring attributes that might be helpful to consider, if applied to nonprofit board recruitment as well as employee recruitment. * Nonprofits should especially consider them for board recruitment. Although nonprofits traditionally use an attribute matrix emphasizing skills such as finance, marketing and accounting, here are some others to consider. (more…)
Is Your Nonprofit Strategically Deprived? Updated & Revised
By: Eugene Fram
A vital concern to the future of any nonprofit organization is frequently neglected. Responsibility for the lack of strategic planning must reside with the chief executive, board members and the tactical challenges that inevitably flow to the board.
Before a nonprofit board can begin successful strategic planning, it must: (more…)
http://www.huffingtonpost.com/eugene-fram/the-real-story-of-nonprof_b_4676397.html
When the board and management talk about each other outside the boardroom their remarks are often good indicators of their working partnerships.
The Balancing Act – A Must For Nonprofit Boards
By: Eugene Fram
The success of the board depends on making sound judgments in numerous situations that involve balancing different interests.*
Like for-profit boards, nonprofit boards must juggle a variety of interests and objectives when making strategic decisions. But board meetings are often constrained to 1-2 hours, making it almost impossible to give thoughtful consideration to a disparity of perspectives. How does your board weigh in on the following conflicting issues? Following are areas in which thoughtful balancing needs to take place. (more…)
How Can Nonprofit Boards More Clearly Define Operational Responsibilities? Revised & Updated
By Eugene Fram
My experience shows that well functioning nonprofit boards establish and monitor the organization’s policies. The board operates through the president/CEO. In turn, the CEO executes policy and is responsible for the prudent and creative operations of the organization. In this role, the CEO exercises leadership resulting in the effective and efficient use of board and of other volunteer time.
Although defining what are policy issues and what are operation issues is not always clear, for both for-profit and nonprofit organizations, following is a useful set of guidelines (more…)
Can a 9-Year Tenure Promote Nonprofit Director Effectiveness?
Milestone:This blog-post is number 200, since late 2011, for my blog-site. Like this blog-post, I have attempted to show how board practice and research from other areas might help nonprofits to achieve better mission outcomes and impacts. In other posts, I have attempted commented on traditional issues, such as is the board or CEO primarily responsible for fundraising? That blog-post went viral on the Internet abut 10 days ago and continues to go viral today. Thanks to all who added their insights and experiences to my comments.
By: Eugene Fram
Having served on two nonprofit boards for a period of ten consecutive years, I was interested to read a current study of the optimal tenure for business board directors. The business study found that a director’s effectiveness peaked at nine years, after which it falls off.* If a parallel study were to be run with nonprofits, what conclusions might be drawn given that the usual nonprofit board tenure is two three-year terms? What, if any, might be the impact on nonprofits by extending directors’ term of office? Although there are differences in their missions, nonprofit and for-profit boards should be able learn from each other., (more…)
Nonprofit Management 