A Precious but Fragile Bond
Here are three keys to a healthy boardCEO partnership.
The savviest foundation CEOs make an effort to understand what their board chair wants to achievethe return on the investment of time and energy in chairing the board he or she desiresand then help the chair realize those goals.
Building and maintaining a productive, harmonious and enduring partnership between the board and CEO is on the short list of factors influencing the performance of foundations along with other members of the nonprofit family.
Of course, all human relationships require conscious, constant management to keep them healthy, but the boardCEO partnership is especially fragile and prone to erode with dismaying speed. Twenty years of hands-on experience working with and observing hundreds of nonprofit boards and CEOs have taught me that three principal factors determine the quality and durability of the boardCEO partnership: a board-savvy CEO who brings the right philosophy, attitudes, knowledge and skills to the governance arena; meticulous management of the partnership; and active collaboration between the board chair and the CEO.
Out with the Old School
Truly board-savvy foundation CEOs believe that high-impact governance makes a strategic difference in the affairs of their foundation, and they devote considerable time and attention to helping their boards develop their governing capacity. Of course, playing the leading role in board development requires that they become true experts in the complexities of governance, understanding it inside outprincipally by building a library of publications on governing and by taking advantage of educational programs. They also pay close attention to the emotional and psychological dimensions of governing, knowing that trustee commitment depends on strong feelings of ownership, which can only result from meaningful participation in decisionmaking. Unfortunately, many foundation and other nonprofit CEOs neglect this dimension of the partnershipat their professional peril.
Almost five years ago, I had occasion to closely observe an old school foundation CEO who considered her board's governing role in traditional policymaking termsconsisting largely of reacting to the finished staff work she sent the trustees. In her view, armed with the "right" information and well-thought-out recommendations, her trustees could be depended on to make the "right" policy decisions. This traditional CEO sincerely believed that her trustees deserved the very bestat least in terms of paper flowas reports and recommendations were invariably meticulously crafted, well reasoned, complete and accurate. The trustees' packet for quarterly committee and full board meetings always arrived well in advance, leaving adequate time to prepare for upcoming meetings. Committee and board meetings invariably went smoothly, and trustees could depend on them ending on time.
However, despite the hard work of this accomplished executive and outstanding community leader, her relationship with the board became badly frayed and was rebuilt only with great effort. She had unwittingly treated her trustees as an audiencealbeit an accomplished and well-respected onerather than turning them into owners by engaging them creatively and proactively in the process of making governing decisions. In a glaring example, she presented her board with a completed strategic planning document that had been developed by a consulting firm, asking the board to review and comment on it, rather than involving the board in shaping particular elements of the plan (e.g., the statement of strategic goals) before its completion.
Truly board-savvy foundation CEOs recognize that making strategic decisions is the gold standard for board involvement in foundation affairsupdating the foundation's values and vision for the future, determining strategic goals and adopting broad strategies to achieve them. The last thing a board-savvy CEO would do is retain a consulting firm to crank out a strategic planning tome for board review. Audiences thumbing through finished reports do not owners make, as the CEO in the previous example learnedwhen it was too late.
Board-savvy CEOs make sure that their trustees are involved in ways that make good use of the knowledge and skills they bring to the boardroom. For example, the trustees and CEO of one foundation brainstormed a new vision statementamong other thingsin a two-day strategic planning retreat, after which the CEO and executive team refined the statement. Later, the statement was fine-tuned by the board's planning committee, which subsequently recommended its adoption to the full boardfour months after the retreat. At that point, the trustees were truly owners of their foundation's updated vision, and consequently were firmly committed to realizing it in practice.
Given what's at stake in building and maintaining a healthy boardCEO partnership and the challenge of melding high-achieving, willful people into a cohesive team, one would think that careful management of this precious relationship would always be a top priority for trustees and their CEOs. However, the boardCEO partnership is more likely to be taken for granted than systematically managed, which is a major reason why boardCEO relationships become strained surprisingly quickly.
Many foundations and other nonprofits have found that two of the most powerful relationship management tools are assignment of accountability for the boardCEO partnership to a standing board committee and regular, systematic board evaluation of CEO performance. Since CEO evaluation has been well covered in many other publications, I will focus here on the use of a standing committee.
Assigning accountability to a particular standing committee for maintaining a healthy boardCEO partnership is a way to ensure that this precious organizational relationship is taken seriously and that its management doesn't drop through the cracks. Although a foundaboardCEO communication, engaging health of the partnership and, perhaps most important of all, regularly evaluattion board of fewer than, say, seven trustees might be too small to employ standing committees, many larger foundation boards have found that the executive (or governance) committee is the natural place to assign accountability for the boardCEO partnership, since it typically consists of the board's officers and the chairs of other committees. Many executive committees handle this critical function quite well, reaching agreement with the CEO on his or her executive leadership targets, closely monitoring the CEO in a continuous dialogue on the health of the partnership and, perhaps most important of all, regularly evaluating CEO performance.
Diplomatic Turf Sharing
The most board-savvy foundation CEOs always pay close attention to their partnership with the board chair (or president), not only because of the chair's influence on other board members and formal authority in the realm of foundation board operations, but also because of their shared external relations turf. If the relationship is tense or is dysfunctional in other ways, board members will automatically have questions about the CEO's relationship skills, even if the particular chair is a curmudgeon with whom nobody gets along. The ability to forge a strong alliance with the board chair is widely considered an indicator of a CEO's interpersonal and diplomatic skills.
The savviest foundation CEOs make an effort to understand what their board chair wants to achievethe return on the investment of time and energy in chairing the board he or she desiresand then help the chair realize those goals. For example, one highly successful foundation CEO, learning that his new board chair was tremendously interested in strategic innovation and change management, made sure that the chair was prepared to play a leading role in the annual strategic work session. The preparation included developing a PowerPoint presentation on major community conditions and trends for his chair to present as well as actually providing a forum for the chair to rehearse before the session. A less savvy CEO might have had a senior executive make the presentation, thereby losing a major opportunity to cement his partnership with the chair, but this CEO took advantage of a good opportunity.
Board-CEO partnership building is a high-stakes affair. A foundation's effectiveness generallyand the CEO's success more specificallyare heavily dependent on a board-CEO partnership that is close, positive, productive and enduring. Such partnerships do not develop naturally; rather, they must be explicitly and systematically built over a period of time. And in the process of partnership building, the three keys described above will serve readers involved in that process well.
Extraordinary Board Leadership: The Seven Keys To High-Impact Governance, Doug Eadie. (Sudbury, MA: Jones and Bartlett, 2001). To order, call 800/832-0034; or visit www.nonprofit.jbpub.com. $49.95.
Evaluating the Nonprofit CEO: A Guide for Chief Executives and Board Members, John Gillis. (Sudbury, MA: Jones and Bartlett Publishers, 1996). To order, visit www.jbpub.com. 66 pages, $124.95.
Making the Most of Corporate Foundation Boards, Laurie Regelbrugge. (Washington, DC: Council on Foundations, 2001). To order, visit www.cof.org/Publications or call 888/239-5221. Order #1017. 104 pages, $75, Nonmembers $120.
The Strategic Board: The Step-by-Step Guide to High-Impact Governance, Mark Light. (Indianapolis, IN: John Wiley & Sons, 2001). To order, visit www.wiley.com or call 877/762-2974. 272 pages, $40.
Illustration by Clemente Botelho
Doug Eadie, founder and CEO of Doug Eadie & Company in Palm Harbor, Florida, is the author of 15 books and more than 100 articles on nonprofit leadership. He can be reached at 800/209-7652 or DEadiePres@aol.com.