nonprofit executive director

Two Nonprofits Merge: Synergy or Collision Course?

Two Nonprofits Merge: Synergy or Collision Course?

By: Eugene Fram

Having led a merger committee that resulted in a successful merger with another nonprofit, I thought my field observations might be of interest to others contemplating a merger. These comments center on a merger of two equal partners, which plan to form a new organization, not the acquisition of one nonprofit by another.

Assuming both organizations have merger committees that meet frequently, over an extended time period, the following initial issues need to be reviewed: (more…)

Designating a ‘Lead Director’ Can Help Nonprofit Boards Improve Their Operations- Updated & Reissued

For several years, I have suggested that some NFP boards experiment with the addition of a Lead Director to their rosters, just as for-profit boards successfully have since 2002. This blog is divided into two sections. First is an abstract of an article published I published on the topic in the Chronicle of Philanthropy (June 2, 2011, p.34). This will help the viewer understand how I am adapting a business board process to a nonprofit board. Following that is a field critique of my proposal provided by Mark Soundie. Mark is uniquely qualified to comment. He provides counsel to boards for the following types of nonprofits: social housing providers, voluntary & social enterprise organizations from all sectors and all sizes & types of charities, His essay below provides an excellent summary of the pros and cons. Also, I have noted from a current study that about 37% of a small subgroup of 420 nonprofit directors responding to an NACD study have designated directors on their nonprofit boards. In addition, 88% of the group concluded that their lead directors enhanced board effectiveness.* These nascent results are encouraging news. Finally, a link follows to a comprehensive article on lead directors that appeared in April, 2012 in The International Journal of Not-For-Profit Law, Vol.14, Numbers 1-2.pages 52-57. Lead director article: bit.ly/15s4eVv
 (more…)

Radio Program on Nonprofit Boards & Governance

Folks:

I thought my followers would like to know I am going to be interviewed by Tony Martignetti on Nonprofit Radio from 1 to 2 pm eastern on Friday, APRIL 26TH. If you would like to listen to the interview later at any time, starting next Monday April 29th, you can find it on iTunes (free), or the same link below will take you to the archive listing of the program.

Nonprofit Radio, April 26, 2013: A Conversation With Eugene Fram http://tony.ma/11AWzAj

Thanks for your interest in my views of nonprofit governance.

Gene

Do Today’s Business Leaders Make Effective Nonprofit Directors?

Do Today’s Business Leaders Make Effective Nonprofit Directors?

By: Eugene H. Fram

The names of the new board nominees have been announced. They include several outstanding recruits from the business community. Will these new formidable directors perform well in the nonprofit environment? William G. Bowen, a veteran director in both the for-profit and nonprofit environments, raised the following questions about such beginnings in a 1994 article:*
Is it true that well-regarded representatives of the business world are often surprisingly ineffective as members of nonprofit boards? Do they seem to have checked their analytical skills and their “toughness” at the door? If this is true in some considerable number of cases, what is the explanation? (more…)

Once Again: How Should Nonprofits Conduct Board Evaluations?* Updated Reissue

Once Again: How Should Nonprofits Conduct Board Evaluations?*

By: Eugene Fram

Process Expectations Including:
• Value of board materials: board book delivery time prior to meetings, material clarity, meeting notices, etc. Are board books delivered a week ahead of meetings?
• Stakeholder Relations: Board interactions with various nonprofit stakeholders, especially staff. To what extent do directors meet with key stakeholders? To asses this expectation, are records noted of these
interactions? Which directors are most adept at building these relationships?
• Willingness to evaluate qualitative outcomes** To what are data developed that go beyond typical records such as accounting statements and membership records? What about the more difficult data to develop, such as brand
image and impact on the community? Hearsay evidence should not be used to assess these important outcomes.
• Composition of the board in regard to diversity including gender, skills, age, board experiences, etc. Does the organization have a diversity policy? Do current board members have sufficient prior board experiences in
order to act as models for new members without prior board experience?
• Action plans including a summary, for the board minutes, which obligates the board professionally to take action and may have liability implications if plans are not executed. The plan should provide evidence of a robust
evaluation. With luck, some nonprofits may be able to relate their field accreditation processes with the action plans.

Director Evaluation Approaches (more…)

A Nonprofit Board Balks at a CEO’s Proposal – How to Try to Move Forward

A Nonprofit Board Balks at a CEO’s Proposal – How to Try to Move Forward Move Forward*

By; Eugene Fram

A small nonprofit whose work was receiving positive community attention was suddenly resistant to its CEO’s most recent proposal, according to a staff member I encountered.
The Board, a conservative one, was unwilling to provide leadership for a proposal that would move the organization in a somewhat new direction in assisting community clients.
The CEO and staff provided arguments that showed ample need for the program’s services and even access to sufficient financial support.
Yet, the Board had rejected the suggested foray into moderately uncharted waters. (more…)

Nonprofits Must Monitor Diversity Opportunities

Nonprofits Must Monitor Diversity Opportunities

By Eugene Fram

Diversity on the boards and staffs of nonprofit organizations is no long a choice; it is a mandate. American demographic trends are clear. The US population is rapidly becoming more diverse, and increased global migrations will require nonprofits and NGOs to serve broader populations. In a 2011 analysis, two Harvard professors have made the following observations: (more…)

What Nonprofit CEOs Think of Their Boards – Some Projections

What Nonprofit CEOs Think of Their Boards – Some Projections

By Eugene Fram

Governance articles frequently cover issues related to relationships between the CEO and board. A comprehensive report was recently published in a recent Harvard Business Review* citing what for-profit CEOs readily think of their boards. Following is a projection of how some of the article’s conclusions can apply to nonprofit CEO’s thinking, based on my decades of experience with nonprofit boards.

• “[T]he best leadership partnerships are forged where there is mutual respect (between CEO & board), energetic commitment to the future success of the enterprise and strong bonds of trust. … Great boards support entrepreneurial risk taking with prudent oversight, wise counsel and encouragement.”

These statements should be the gold standards for nonprofit CEO- board relationships. Unfortunately, not many nonprofits have the gold standard or even reach for it. Too many nonprofit boards, because of long traditions, see the CEO-board relationship as a “parent–child” one. This leads to mistrust, board focus on operations and missed strategic opportunities for growth. Many nonprofit boards are very careful with risk related decisions, but the gold standard does allow nonprofit boards to assume reasonable risks. (more…)

Program Reductions Are Mandated—What Can A Nonprofit Do?

Program Reductions Are Mandated—What Can A Nonprofit Do?

The word from management is that the board of directors has decreed there will be program cuts. Regardless of the rationale, be it financial or mission-related, the proposed loss is a source of concern to directors and is a common nonprofit board challenge in the 21st century.
Reactions are varied and I invite you to share your board experience on the topic; here are some deliberations that I have encountered in the past: (more…)

Management Knows All: What’s A Nonprofit Director To Do?

Management Knows All: What’s A Nonprofit Director To Do?

Your nonprofit board has a management ‘dream team” in place. The team collective has superior knowledge and in-depth understandings of internal processes and issues. Without attempting to micromanage the nonprofit, what role should a director play … assuming h/she serves on the board for a purpose.

Nonprofit boards provide critical policy compliance & financial overviews of organizational issues and actions. Regardless of the board’s overview actions and perceived excellence of management personnel, board members also must be poised and positioned to:* (more…)