A Nonprofit CEO’s Nightmare: The Micro-Managing BoardThere are two primary (and polar opposite) ways that nonprofit boards drive their chief executives nuts. The first: disengagement. The second: micro-management.
A disengaged board is one that is asleep at the wheel. They are likely falling short of the legal obligations of board service. They are a net drag on the organization. They are doing a disservice to the community that their organization was formed to serve.
A micro-managing board, on the other hand, has a different problem. It’s not that they are too engaged, but rather, they are engaged on the wrong things.
It’s easy for a board to fall into the trap of micro-management. The board members’ passion leads them to care deeply about the ins-and-outs of how the work is done; before long they are in the weeds. Their business prowess and professional skills, leveraged daily at work, walk into the board room with them and they can forget that governance is a legislative rather than executive function. It is easy for board members to focus their attention on the things they know best rather than the more challenging and intimidating aspects of nonprofit board service: fundraising, ambassadorship, board development, and the like.
It is the chief executive who is most negatively impacted by a micro-managing board. A talented leader in his or her own right, a CEO becomes strapped and strained in executing the mission when a board takes more than it gives, but also when it gives too much of the wrong thing.
A CEO becomes strapped and strained in executing the mission when a board takes more than it gives, but also when it gives too much of the wrong thing
Yet often times chief executives themselves foster an environment that leads to a culture of what I call board “mis-engagement” (not to be confused with disengagement).
So how should a chief executive ascertain the issues and decisions that should be addressed by the Board of Directors versus those that are appropriate for autonomous management action? Getting these judgement calls right is one of the fine arts of nonprofit leadership.
A Chief Executive’s Guide to Properly Engaging the Board
First, read the bylaws. Often times this foundational guiding document will articulate specific issues and circumstances when the board must be involved. The bylaws might, for example, require a board decision for a contractual obligation or expenditure over $10,000. Chief executives must carefully follow the framework set out in the bylaws.
Second, take the temperature of the board as a collective. How engaged in discussion and decision making do they expect to be? I’ve seen boards that run the full gamut. Know yours. Keep in mind that, in general, boards will engage on the matters you put in front of them and will stay out of the things you don’t. Choose wisely the items that you surface for the board. I’ve watched nonprofit chief executives share with their board the full litany of things they are dealing with -- perhaps to impress ‘the bosses’ with how hard they are working -- and then become frustrated when they find out that board members do, in fact, have lots of opinions on items big and small. When a chief executive opens the door on a what is properly a management- or staff-level issue, they shouldn’t be surprised when board members walk right in, viewing it as an invitation to opine.
Third, right size expectations with board leadership. Chief executives should have a discussion early on with the Board Chair around what constitutes, in his or her view, a board-level versus a management-level decision. Ask for examples of the sorts of decisions that the Board Chair would expect to be raised with the board rather than handled independently by management. The chief executive might also provide a handful of examples of matters that, in his or her view, would not require board involvement, checking in on alignment with the Board Chair. Ultimately, both parties should agree that judgement calls will have to be made by the chief executive on a daily basis. With this understanding in mind, the Board Chair should support the chief executive and provide assurance: “I’ve got your back.”
Finally, I proffer below a few principles for chief executives to apply when deciding whether to surface a matter with the board:
- Permanence: The longer the decision’s implications will stay with the organization, the more likely it is that the matter should be raised with your board. Take, for example, a 20 year lease of new office space.
- Directional: The more closely related the decision is to the strategic direction of the organization, the more likely it is that the matter should be raised with your board. Remember, shaping strategy is a central board responsibility. Chief executives must not go it alone.
- Controversial: The more contentious the decision is with one or more stakeholder groups, the more likely it is that the matter should be raised with your board. A board will have the chief executive’s back when they have participated in the deliberations and final decision.
- Positional: If the matter is one that will have the imprimatur of the organization on it for the world to see, you should engage your board. The organization I serve as a board member established a special board committee to consider formal policy positions before making them public. Taking an organizational position on a particular matter may or may not be controversial, but should nonetheless be informed by the board.
- Essential: The board owns the mission, vision and values of the organization. A chief executive must not fiddle with these core essentials of the organization without full board involvement.
- Financial: The board establishes an annual budget to provide management with the autonomy needed to make day to day financial decisions. The board tracks outcomes against budget regularly over the course of the year, of course, but when a significant departure from budget is anticipated, the board needs to be involved.
By design, the Board of Directors and the chief executive of a nonprofit share leadership of the organization. Given that the space between governance and management is often gray, how should each entity understand their respective leadership roles?
Despite the long litany of responsibilities typically listed on their job description, a nonprofit chief executive’s responsibility can be boiled down to one overarching charge: to successfully execute the mission of the organization consistent with the strategic objectives articulated by the Board of Directors.
The Board of Directors has four core responsibilities: 1) setting strategy and monitoring its implementation, 2) providing fiduciary oversight of the organization with special attention to financial health, CEO performance and legal compliance, 3) driving financial and human resources into the organization through personal giving, participation in fundraising, advocacy and ambassadorship, and 4) leveraging the range of professional skills represented by board members to strengthen operational excellence across functional areas (e.g. finance, legal, marketing, HR, technology, real estate, and the like).
When both the chief executive and Board of Directors find the sweet spot between proper board engagement and effective management execution, leaders are happy, organizations are well-run, and the mission is much more likely to be achieved.
Robert B. Acton is the Founder & CEO of Cause Strategy Partners, LLC, a consulting social enterprise that partners with corporations, foundations and social good organizations to help nonprofits achieve their missions fueled by great leadership, great strategy and, most importantly, great results. Through the organization’s signature program, BoardLead has placed more than 2,600 professionals from top companies and professional services firms on more than 1,400 nonprofit boards in six cities across the country.
This article was originally posted on LinkedIn on November 6, 2018.