Case No. 1: An executive director of a nonprofit agency retired without any prior notice. During the next few months, numerous board members approached staff members and shared a similar story, “It was pretty clear he had a problem, but I didn’t want to speak up and say anything.” They often listed two or three incidents they witnessed to illustrate the problem.
Case No. 2: A small nonprofit agency relied on federal funding for more than 80 percent of its operating budget and had no reserves. When the federal funding program was eliminated, the agency’s executive director and staff scrambled to start a fundraising campaign. However, the monthly financial statements showed the agency would have to sell its office furniture to make payroll for the remaining two months in its fiscal year. It liquidated all assets to pay employees and ceased operations. Afterwards, a board member looked back on their oversight and said, “This was like rearranging the deck chairs on the Titanic.”
Case No. 3: A board approved a multi-million dollar project and the executive director retired shortly thereafter, leaving unfinished work pertaining to program management and funding. A new executive director was hired, but didn’t learn about the program or the debt until a month after he was on the job. No board members mentioned it during the interview or the onboarding process.
These three cases reveal a failure of leadership on several levels. Some responsibility lies with the executive directors, but boards also are to blame for poor oversight and a lack of governance.
You know you’re on a dysfunctional board when you attend a meeting and everyone is voting in favor of all motions. All heads nod in agreement with all committee reports. No questions are asked nor comments made.
Many boards choose to not influence or adequately lead organizations in program management, personnel or finances. This is especially true when controversial or harmful changes are implemented by an executive director they hired.
Recruiting and training an effective board is a shared responsibility between the executive director and board leadership. One nonprofit organization had its board meeting minutes written before the meeting was ever held. There was never any deviation from agenda, votes in favor of all motions, and nary a syllable was included or excluded during presentations of committee chairmen as scripts were always followed to the letter. The minutes of the meeting that just concluded were presented to the board president, a volunteer, at the end of the meeting for review. There was no interaction, questions or comments.
Board members are often afraid to make waves. If they asked a question that might be perceived as critical, causing a problem or inviting extra work, they could be scorned and lose their social status among the board, their friends throughout the community and the business establishment. Do you want to be known as “that guy” who wanted to see the executive director’s employment agreement or contract or to inquire why the organization was spending hundreds of thousands of dollars on a particular project?
Here are four ways to create, maintain or enhance the engagement of a board so it properly leads and governs an organization and works collaboratively with the executive director and staff.
- Recognize, Appreciate Challenge Of Status Quo: Executive directors and board presidents should publicly thank those who ask questions, seek more information, or outright challenge actions. Many times, these challengers will be viewed as disruptive and negative. However, their passion and determination could help the organization steer clear of problems or adopt a better solution.
- Encourage Interaction, Participation: Some board members are recruited for their knowledge or expertise and are never asked for input. Executive directors and board presidents will develop a strong board if they actively solicit input from all members.
- Encourage Constructive Conflict: Most complex problems will have more than one solution. When implementation of a solution is affected by time or resources, a healthy debate to determine another option can be beneficial. Sometimes, the best solutions are the result of lengthy and passionate discussions or debates.
- Diversity Brings Different Perspectives: Many organizations adopt the fast or easy solution without seeking additional perspectives. A diverse board or committee will be able to provide valuable additional viewpoints and enable better decision making and innovation.
These four steps can be utilized by almost any board, standing group or committee charged with leading or overseeing an organization. They require the attributes of courage, humility and an open mind. Leaders who embrace those attributes will create, maintain or enhance successful and vibrant organizations.