Effective CEOs can transform a nonprofit, and donors look to the CEO as a benchmark when considering a major investment. However, I believe there is one leadership role more important to an organization – and more critical to its short- and long-term success: the board chair.
CEOs and other staff leaders will come and go. A stellar board chair will ensure consistency for the organization during the inevitable transitions. The success of any CEO is deeply entwined with the quality of the board chair and the relationship between that chair and the CEO.
We have all seen board chairs perform remarkably well and remarkably poorly. More than once, I have been surprised by poor performance from a board chair who seemed to bring all the needed experience and knowledge into that role.
Early in my career, I was fortunate to be a young CEO and be mentored by an exceptional board chair who understood strategy and the board’s strategic role. And he saw ensuring my continued development as a leader as one of his priorities. While we became very close friends, he never lost sight of his primary fiduciary role, which included the supervision and evaluation of the CEO. Many times, I was appropriately redirected and questioned.
A board chair and CEO should be in sync. They should have regular, confidential communication. They should support each other. However, the chair should never forget that they have a fiduciary role in the supervision of the CEO. That means knowing when to question, when to flat-out not believe, when to coach, when to reward and, yes, when to fire.
I was enjoying lunch with one of the wisest nonprofit leaders I have ever known. He ran a major foundation. He was quiet but so insightful and strategic. We had just completed a planning process for one of the region’s leading nonprofits, and this foundation president was on the committee.
As the organization’s planning progressed, the CEO shared that the only outcome he wanted was a smaller board – so that he could control it better. Needless to say, this did not happen. This CEO constantly complained about not having received an evaluation – and raise – in years. But when benchmarking his salary, it was evident that he was compensated way beyond any of his peers across the nation, despite lacking the formal education and certifications that many others held. Moreover, along with the lack of a review had come the lack of any real accountability and performance measures.
Back to my friend, the foundation head, who had a gift for seeing through pretense and games. “He asked me to serve as his board chair,” he said, referring to the CEO of this nonprofit. “I declined,” my friend shared, “because if I was the board chair, I would have to fire him.”
This foundation head not only declined the offer but left the board because his fellow board members and a series of chairs failed to fulfill their fiduciary responsibility in holding this CEO accountable. Too many were enamored by the perks the CEO offered to his inner circle.
Another major nonprofit finally fired its CEO after more than 10 years. Chairs served a two-year term and usually toward the end of the tenure they realized that the CEO was incompetent. During the recession, he tried to slip through a raise when his staff was having their pay cut. He should have been fired then for that ethical lapse.
Years later, he was finally fired. However, during his tenure the organization had paid more than $1 million to a firm owned by one of his best friends. Much of that money was for coaching the CEO. Other was for market studies that resulted in branches opening – but then closing in failure a few years later. When the CEO was fired, his friend – who had left his side when he saw the board turning against the CEO – was hired at nearly $100,000 to conduct the search for his successor. And, surprise, who was hired? Another client of this consultant.
While these are examples of board chairs not fulfilling their duty, sometimes, however, the problem is a board chair overstepping. For example, we were halfway through campaign planning for a nonprofit – an affiliate of a national organization – that had suffered through several bad CEOs who were secured through a “good old boy” network and system.
The CEO we worked with embodied the organization – and he was turning it around. Working with him, we were finding substantial funds that could have solved the organization’ financial woes. Without consulting with us or even with the board, the chair and incoming chair fired the CEO. They didn’t think he was moving fast enough, and they had a failed vision to merge the national affiliate into a local organization. The organization has never recovered.
Nonprofit board chairs must:
- Make a significant commitment of time
- Be familiar with the role of a nonprofit board and its legal responsibilities
- Learn the board chair role
- Know the mission and learn about the organization’s programs
- Be sure a professional evaluation and compensation program is in place for the CEO
- Know the organization’s strategic plan
- Review the bylaws
- Work toward a collegial partnership with the CEO
- Be willing to question and dig deeper when something doesn’t’ seem right
- Be willing to fire the CEO when something goes awry
- Defend the CEO fully when board members overstep their bounds
- Be ready to protect the organization’s assets – including its culture
A national study conducted a few years ago reported that more than half of nonprofit board chairs responding did nothing to prepare for their role. Hundreds of board chair encounters across my career – some good, some bad, some exceptional – have led to a research project on nonprofit board chairs.
We’re asking for insight on the most important attributes of successful board chairs, as well as traits that may be detrimental to board chair leadership. In addition, we are soliciting nominations for outstanding board chairs – many of whom we will interview as a part of our research.
To date, we have secured the insight of nearly 1,500 nonprofit staff and board leaders. What is missing? Your insight!
Please take 10 minutes to provide your insight and experience to this important research project. Thank you.