Nonprofit board stucture

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…)

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

Can Groupthink Hamstring Change on a Nonprofit Board?

Can Groupthink Hamstring Change on a Nonprofit Board?

By: Eugene Fram

Dictionaries typically define groupthink as “…the lack of individual creativity, or a sense of personal responsibility that is sometimes characteristic of group interaction.” In my opinion, the process is as lethal to the nonprofit board as smoking can be for humans. It ties boards to past experience and discourages experimentation. Since many nonprofit charters require boards to “conserve assets” and board members are characteristically volunteers, the nonprofit culture inevitably defers to groupthink–it’s in their DNA! “One goes along to get along.”
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What Role Should Directors Play in Overviewing Nonprofit Management/Staff Talent?

What Role Should Directors Play in Over-viewing Nonprofit Management/Staff Talent?

Nonprofit boards rarely develop an in-depth strategy for assessing its organization’s human capitol. 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 directors whose median term of service is 4 years—hardly a lifetime commitment. Like for-profit directors whose focus is on quarterly earning results, their nonprofit counterparts are more interested in resolving current problems than in building sufficient bench strength for the organization’s long-term sustainability. (more…)