I recently reflected on my years of nonprofit experience, with boards ranging from dysfunctional to stellar! The quality of a board's performance can be directly attributed to the quality of its leadership. The volunteer leadership on the Board of Directors can and does make a difference. But its lasting imprint is the result of a trusting partnership between the board and the CEO -- one that can shape a good board into a great one.
Here are three "greats" among the nonprofits of my past. Their characteristics: (1) Long tenured CEOs, 15 years or more: (2) Boards and CEOs who can embrace change and act on it; (3) Boards who take pride in their CEO's dynamic achievements internally and externally; (4) CEOs who can work with a continual parade of different board chairs and board members. (5) Boards who can support dynamic entrepreneurial CEOs and who understand the need for strategic planning.
A National Board
Two outstanding and entrepreneurial CEOs steered this social service organization from near bankruptcy to positive national recognition! The first one provided many highly creative initiatives. She fostered the move of the organization's headquarter a thousand miles, rebuilt the staff, recruited new board members and identified substantial funding in the new community!
When a new CEO was hired, upon the retirement of the first one, the nonprofit continued to thrive. He brought with him a national reputation for creative service. He quickly implemented a number of projects that had immediate appeal to both his peers and to national foundations. But when he and the board sensed that the character of the nonprofit's membership was changing, he was able to engineer a successful but slightly turbulent merger with another group that was facing similar challenges.
The merged group, consisting of volunteers or current CEOs from local units underwent substantial mission orientation and eventually coalesced into one working board. While the vast majority of the board leaned to the left in terms of social policy, both sides of the political spectrum argued their views in a surprisingly civil manner. Today, the nonprofit is still successful under a third new CEO, having grown from about 250 local members to about 500 in about 15 years.
A Local Board
When I encountered this board -- first as a consultant and subsequently as a volunteer director -- it was clearly dysfunctional. The board, a human service agency, was unanimous in its desire for new leadership. With the retirement of the CEO after 25 years, board members wanted his successor to create an opportunity for change. Unfortunately, the new CEO misfired and was soon terminated.
The community-focused organization was in shambles. There was deep unrest on the board and staff -- its chief funding source had put the organization on probation. In desperation, the board sought out and engaged a new CEO, one who had some impressive nonprofit management credentials including having worked for the agency early in his career. This one was right!
He proved his mettle by developing new projects that were in sync with the mission and income sources. Whenever a financial bump in the road was encountered, the new executive was transparent with the staff, in some instances allowing an outside union, representing the staff, to review financial statements. He expanded the agency's services and funding sources, and the board established a robust type of committee charged to audit and assess everything from the financials to the CEO's performance and to the agency's outcomes and impacts.
Under this CEO's influence the organization began to flourish. Community needs were capably surveyed and addressed. Funding agents were restored. Major community leaders who served on the board developed a high level of trust in the CEOs competence, and for many years the board was a model of excellence.
Not all nonprofits have happy endings. In this case, the agency subsequently faltered under less qualified leadership and an irreparable decline in the client base. The remaining clients were absorbed by a neighboring agency.
A Regional Board
The Board and the newly appointed first time CEO of this organization appeared dissatisfied with the state of its governance. I was engaged to help ameliorate the situation. There were too many standing committees and the CEO needed to have more operational authority. The chart of board standing committees looked like a spaghetti factory! Although the organization was functioning and finances were in good shape, the newly appointed CEO convinced her board chair and then other board members that there was a need for both she and the board to work more strategically. The board took a risk, with oversight, and gave her substantial operating authority.
She took the time to build a bond of trust between herself and the directors, working for about two years to assist the board to become comfortable with its governance changes and with its new relationship to the CEO. Her leadership and relationships with the staff have been solid over several decades.
In the last 15 years this CEO, in a meaningful partnership with the board, has added services, increased work contracts for its sheltered workshop and moved the organization's annual revenues from about $12 million to $39 million. With her dynamic creativity and managerial expertise, she and the board have made the nonprofit a national leader in its field.