Beyond Conventional Wisdom
Working with Your Board
By Howard Shiffman
Being candid, how many nonprofit CEOs would say they enjoy having a board of directors? Have a great relationship with their board members? Look forward to board meetings or spending a full day with them in strategic planning? I venture that most CEOs would answer these questions negatively, and in fact could fill a small book of disaster stories about time with their boards. On the other hand, as CEO of Griffith Centers for Children, Inc., in Lakewood, Colorado, I answer these questions with resounding positivity. I enjoy working with my board because I am not willing to be boxed in by the conventional wisdom outlined by so many authorities on this subject.
Howard Shiffman presents a plaque to Griffith's outgoing foundation president, Barbara McKellar, who has been involved with Griffith as a board member and trustee on its Foundation since 1980. Barbara Ritchie (right), Director of Fund Development for Griffith Centers and Director of its Foundation, also attended Griffith's annual holiday party.
Conventional Wisdom for Nonprofit Boards
The criteria put forth by many professional organizations outlines how nonprofit boards should operate to meet industry standards. This wisdom surrounds topics such as board structure, the role of the board members versus the CEO, committee structures, terms of membership, responsibilities of the members, mission attainment, strategic planning, community outreach, board composition, conflicts of interest, and fundraising. Perhaps this wisdom has been proven and is all that is needed to have a successful board operation. On the other hand, I believe most successful nonprofit CEOs will agree that in today's competitive, high-paced, heavily regulated, and often under-funded environment, the CEO must use conventional wisdom only as a foundation. In my experience, this conventional wisdom should be built upon but not necessarily unequivocally followed. Conventional wisdom tells us that some of the major roles of the board are to:
Stepping outside the box, another major role of the board in today's environment, often overlooked, is to act as professional consultants and coaches to the CEO. In fact, this is the most important role on my board. Significant areas of consultation and coaching can include finance, marketing, public relations, legal areas, risk management, business models, and human relations.
- Define the mission.
- Hire, supervise, and evaluate the CEO to carry out the mission.
- Strategically plan.
- Assure fiscal responsibility.
- Promote the organization in the community.
Fred Chaffee, President and CEO of Arizona's Children Association, uses this model in his organization. "The arrangement that I have with the board has developed into one where they consult with me on certain things, but it is not around operations unless I solicit their expertise," he says. "For example, we need to get into the 21st Century in our IT area, and I have a sub-committee that has board members with a great deal of expertise in that arena and we rely on that expertise."
At your board room table sits your community's most savvy and well-respected citizens and professionals. They know enough about your organization to apply their years of expertise and knowledge. They are fully vested in reaching your mission because they are part of it. Furthermore, they have come to know you personally and want you to be successful, as their success is tied into yours. As an added benefit, their dedication, skills, and consultation do not cost the organization any money. This type of consultation in today's environment is crucial to giving your organization the competitive edge it needs. For those of you now saying that you need a fundraising board, keep in mind that if these consultations are highly successful you may need less fundraised money.
A Different Philosophy: CEO as Leader of the Board
"In the for-profit world, the CEO is usually also the chairman of the board and the acknowledged leader of that body," says Laurence Demuth, my former board chair. "In the nonprofit world, the CEO is rarely the chairman of the board; but in reality the CEO is the individual that knows the operational details of the entity. He is thus the de facto leader of the board."
Though the board hires the CEO, a successful, confident CEO can naturally become the leader of the board. This is contrary to the idea that the CEO leads the staff and the Board Chair leads the board. Together they make a team, but the CEO should take the reins because the CEO is the consistent factor--the center point that all activities flow around--not the board chair. The chair must be a respected leader among board members and plays an important role in areas such as CEO hiring, supervision, and evaluation; fundraising; and succession and strategic planning. A good chair who serves with an excellent CEO is typically not interested in being the leader but rather the coordinator of the other board members by facilitating meetings and serving as the CEO's point person.
To help facilitate the CEO's leadership role and get the consultation and coaching sought, the CEO must regularly coordinate with the chair outside of the boardroom. "The CEO must organize the work of the board, keep them on task and on time, and ensure that the board leader makes informed decisions," says Bill Holicky, CEO of The House of the Good Shephard in Utica, New York. "This requires that the CEO and the board chair regularly meet, exchange information, and plan for the future. At a board meeting, I may appear to be the chair's assistant, but the reality is that I have developed the agenda and briefed the chair in advance." At meetings the chair can orchestrate the implementation of the CEO's crafted meeting agenda, and encourage the sharing and participation needed from the members. But the CEO, even if he chooses to keep himself in the background during meetings and showcase the chair as the leader, is still really the actual leader of the group and really keeps the board on task, working, committed, responsible, and happy.
Ted Blevins, Executive Director of the Lena Pope Home in Fort Worth, Texas, echoes these sentiments: "I lead the board by providing them information from our field that is pertinent to their decision that they will be asked to make.
I believe the board looks to this leadership and expects it to prepare them for an appropriate decision-making process," he says. "My relationship with my board chair starts immediately after they have been nominated... I sit down with them and ask them what their expectations are from our relationship."
In order for the CEO to operate in this model, I recommend that the CEO and board annually agree upon a business plan or goals and objectives to guide the CEO at board meetings and serve as guidelines for the information discussed. This document should be crafted by the CEO and then negotiated with the board. Agenda items that need board approval, input, and acknowledgement must be prepared by the CEO and presented clearly to the board. In addition I suggest that the CEO must make it clear to the board, at strategic times and in the mist of important CEO recommended decisions, especially those that may be controversial, that the CEO recognizes they are hired to get a job done and with the board's trust, consultation, and coaching the mission will be accomplished. If your decisions are poor, you acknowledge that they will have a chance to evaluate (I am also a proponent of the CEO doing his own annual self-evaluation and offering it to the board for their comments) and, if indicated, terminate employment.
To work within this framework the CEO must be willing to take the reins, follow the business plan and its changes throughout the year, and produce outcomes. They must demonstrate leadership characteristics, be sensitive to the dynamics of the members, facilitate open discussion, and find regular opportunities to make the board feel highly appreciated. Although some may say this model is risky, I believe it allows the board to focus their expertise in helping the CEO accomplish what they hired him to do. It is a given that the board engages in governance activities, like the audit committee, but going beyond conventional wisdom where the members are guided by the CEO's desire to get the consultation he needs, this model will produce wonderful results for the organization. Board composition is an important discussion when trying to build a board of consultants.
Conventional wisdom tells us that our boards should be representative of the population we serve, with a mix of ethnicities, genders, and ages. It also recommends having limited terms to allow others the opportunity to serve and keeping the board at a manageable size. For years, this area of conventional wisdom has made me scratch my head in bewilderment. In fact, I have never met these standards because my board and I had more important things to accomplish.
In my experience, if you are going to meet these criteria it should not be at the expense of the accomplishment of your stated mission and fulfillment of your present business plan. And since I have presented another role for the board member, it also should not be at the expense of getting the best consultation and coaching. Why would I, as an example, ask my most important board members to rotate off if I am getting exactly what I need from them to help me be successful? Would a private for-profit business follow such practice?
Although I have board terms outlined in my bylaws, I have members that have rotated off, attended meetings while technically off the board, and are waiting to sign up again for another major multiyear term. If I rotate my members off, who will be the important culture carriers who remember why we, the board and CEO, signed a 10-year lease? Who will speak up to the other board members when they are pointing their finger at the CEO for the poor decision he made at a meeting a decade ago? I saw this happen at another agency where there were no culture carriers, and this contributed to the ending of the CEO's 17-year tenure. And why would I have my personal supports leave me to a room full of new members that don't know what I have accomplished for the past many years?
Conventional wisdom says you can deal with the problem by staggering board member terms. This is a good solution, but be sure to keep your best board members. "We make every effort to ensure that our board is as diverse as is possible, but the primary issue is ensuring that the board has the proper mix of expertise," says Holicky. "Our board has term limits but we also allow for non-board members to serve on our various committees. In this way, we retain our base of expertise while having the capacity to grow our base on consultants."
Howard Shiffman, CEO of Griffith Centers for Children, joined his board members, Jack Barker, Pete Willis, and Al Bergold for a charity golf tournament. Shiffman believes cultivating personal relationships with board members, and also turning to them as consultants, contributes to a CEO's success.
It would be interesting to have a mix of males and females, Democrats and Republicans, older and younger people, and different ethnic and religious backgrounds on any board. But it can be difficult to find the commitment, donor support, board member compatibility, community influence, and the desired diversity in a person with the specific expertise needed. Heavy competition for the best people in communities that have a multitude of nonprofits contributes to this problem.
I suggest that the CEO take an active role in selecting board members. I opt for the expertise I am looking for and the desire to serve our industry. I want a board member that sees past skin color, personal political views, and has wisdom regardless of ethnic background, age, or gender. Once you find a core group of these wonderful souls, they seem to multiply themselves by attracting others of a similar mind and disposition. Of course this practice does not make me popular with national accreditation standards, but it is for a good cause: the success of the mission. This does not translate across the organization, however. My organization's personnel profile does parallel the national standards for diversity, which we feel is extremely important to the delivery of culturally sensitive and appropriate treatment.
"I am concerned about diversity, but I'm concerned about the diversity of expertise more than that of culture," says Blevins. "Currently, we have 36 board members, but once again, the most important diversity on our board is diversity of skill level, professional role in the community, and their depth of relationships in the community."
Conventional wisdom is often unclear on board size, although in practice many organizations favor a smaller board. Analyze your needs and if 40 members are what it takes for your success, so be it. I personally like a smaller board of about 15 members. I feel this is manageable for me but this should not be the rule. If you can manage a separate supporting foundation board or volunteer fundraising board, I recommend you follow the path that produces the most success for your organization. "If you focus upon client outcomes, you will drive innovation. If you focus upon process, you get bureaucracy," says Jim Fitzgerald, CEO of Intermountain in Helena, Montana. "I focus upon a board structure that works for kids and families and I find little of that in the conventional wisdom model for the mature organization."
The CEO-Board Relationship
An area of great joy and satisfaction for me as a CEO has been the personal relationships I have developed with board members. Very little is written about this area. I am a huge advocate of personally knowing the members of your board; since I believe the CEO is the leader of the board, developing personal relationships is necessary and important to develop trust and retain great board members. Getting to know your board members means finding out about their lives, jobs, families, hobbies, and their views on the world and life in general. Besides the fun of getting to know the great people on your board, there are added benefits: when the going gets tough in your organization, you can feel comfortable that you are supported and will get a fair shake. Of course, you must be open with your life to the same extent you want to know about the lives of your board members.
My approach goes beyond conventional wisdom, which places board members as your bosses and recommends keeping more professional boundaries. Holicky follows more along the lines of a conventional relationship with his board. "I try to know my board members well, although we are seldom personal friends because I believe a personal friendship creates a potential conflict for them," he says. But some CEOs do feel a less traditional approach works for them. "Our board meetings are on a Friday evening--which is social--and on Saturdays. The board bonds with each other and with senior staff at those meetings," says Chaffee. "I think the personal relationships strengthen the board-CEO work."
There are several other important areas where a break from conventional wisdom could be considered, including CEO contracts, communication, risk management, meeting structure, documentation of minutes, annual audit procedures, and ways to adhere to emerging Sarbanes-Oxley issues. I strongly believe that the role of the CEO and board should be examined in light of today's economic and competitive environment and that conventional wisdom needs to be expanded to help organizations meet current business and program challenges. It is my hope that this discussion will provoke a conversation among CEOs and between CEOs and their board members. Using board members as volunteer consultants, acknowledging the leadership role of the CEO with the board, structuring board membership to meet an agency's identified needs, and developing a more meaningful relationship with members of the board can make a significant difference in reaching success. Going beyond conventional wisdom can make working with your board the highlight of your job. Fitzgerald's words perhaps say it best: "After all, pursuing our potential will take us down a very different road than following a strategic plan."
Howard Shiffman is CEO of Griffith Centers for Children, Inc., in Lakewood, Colorado, and can be contacted at firstname.lastname@example.org.
CWLA provides valuable consultation and training for boards of directors. Contact Jeff Bormaster, CWLA Senior Director, Consulting & Special Projects, at .email@example.com for more information.
Order the CWLA publication, Nonprofit Boards: What to Do and How to Do It.
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