The board focuses on governance, not management. Effective nonprofit boards empower their CEOs to run their agencies. In other words, board members establish the desired outcomes while enabling the CEO to determine the methods. The board neither micromanages nor rubber stamps. Rather, successful boards spend their time focusing on fundamental issues and major policy decisions.
The board has one employee: the CEO. A basic tenet of governance is that the board hires the CEO who in turn hires all the other staff. The board views the CEO’s role as similar to one of a corporate executive; thus, all accountability rests upon the CEO alone. For instance, the board would not hold the marketing director answerable for low event turnout; the CEO alone is responsible to the board.
The CEO has only one employer: the board as a whole. A board that ethically governs makes it known that the CEO is responsible only to the unified board. Thus, the CEO is not faced with the political pressure of fielding the special interests of individual trustees. Likewise, board members understand that their collective responsibility takes precedence over their individual relationship with the CEO.
The board creates committees to help accomplish its own job, not the CEO’s job. The board does not create committees to direct the day-to-day management of the agency. Essentially, committees such as program or personnel are duplicative of the managerial duties assigned to the CEO. In addition, these committees compromise the board’s duty to speak as a cohesive unit. Conversely, the board should create committees to help with its own responsibilities; for example a governance committee, finance committee, and an ESAT committee.
The board evaluates its CEO through an Executive Support and Appraisal Team. This committee is charged by the board to jointly establish the CEO’s annual and long-term performance goals. These objectives are based on the agency’s annual agenda and firmly rooted in its mission. The ESAT meets with the CEO during the year to assess progress and then, at year’s end, reports its findings to the greater board. In this model, the board engages the CEO in a proactive and ethical evaluation process.
The board conducts its own annual self-appraisal. After a board is trained and educated in this governance model, the board appraises its efficacy on a yearly basis. Board members have a fiduciary responsibility to the agency and its constituency to assure that their roles and responsibilities are being carried out appropriately and productively. A board that strategically appraises its CEO and concurrently appraises itself sends a powerful message to the community.
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