The duties of nonprofit boards of directors have been elucidated, enumerated, elaborated ad nauseum by many different authors and agencies. From BoardSource¹to Bridgespan²to the Council on Nonprofits,³finding lists of duties is not hard. Just Google this question and pore through a plethora of sites. 

The real question, however, is “What role does the CEO have in both helping the board fulfill those duties and directing the way in which the board carries out its responsibilities?” In other words, “How do I get the board to do what it is supposed to do the way it is supposed to do it?” In this article, I will attempt to put this unique spin on the commonly accepted duties of nonprofit boards. 

It may sound to you like I am suggesting that the CEO actually usurp some of the board’s duties or, at the very least, to manipulate or control the board’s functioning. That has never been my belief or intent. But I will admit that I probably go further in actively engaging with the board than some might feel comfortable doing. Recall from my introductory article that I framed this nuanced approach as “co-leadership through reciprocal governance.” With the organization’s mission uppermost in my mind and its success and sustainability my duty, my active partnership with the board was required.

With that in mind, let’s briefly take a look at each of the ten responsibilities suggested by BoardSource as a way to demonstrate how the CEO should be actively involved.

Determine mission/vision

Ultimately, it is a board’s responsibility to declare to the world what the organization stands for, who it serves, how it serves and why. We commonly call such a declaration the organization’s mission statement. Following closely after such a declaration is a statement of aspiration or vision. This informs the public about what the organization intends to look like in the future. So, the mission describes what is, the vision statement describes what will be. These statements are the domain of the board. It is not for staff to dictate what these are, nor is it appropriate to merely adopt the recommendations of a consultant. 

How the board initially crafts and, over time, revises its mission and vision statements, however, requires periodic, thoughtful reflection. This is where the CEO plays a critical role. Because the majority of board members are typically not professionally engaged in the work of the organization, education around current research in the field, trends in the industry, future opportunities and challenges, adjacent services and the evolving attributes of the population being served is extremely important. Through board development, the CEO and his/her team can enhance and direct the thinking of the board by proposing adjustments or revisions of mission and vision statements to reflect these changes. 

In my experience, leaving it up to the board to word-smith the mission statement opens the door to all kinds of possible undesirable outcomes. Remember, boards only exist when they are in session and most boards only meet three or four times per year. To leave this important statement to the dynamics of one board meeting is not something I ever wanted to risk. Instead, I and my team spent the hours needed to craft a new or revised mission statement – usually as part of our annual strategic plan update process – and proposed it to the board. They appreciated the educational opportunity and it gave us a chance to demonstrate our competency and knowledge.

Ensure continuity of executive leadership

The board’s major responsibility is hiring, supporting, evaluating and retaining the right CEO for the organization. Presumably, you are that person. However, you won’t be there forever, so how can you help the board make the right decision again when you are gone? Who do you want to succeed you? While I don’t think it is a good idea to allow CEOs to pick their successors, I do believe the CEO has a critical executive role to play in ensuring the continuity of executive leadership at the CEO level. You know the demands of the position and have a unique perspective with respect to the kind of person it takes to lead the organization. Your deep commitment to the mission of your organization means that you have an equally deep interest in good executive succession.

The best way to support the board in this vital function is to make sure you have a comprehensive succession plan in place. This may require the support of a professional consultant, but generally, the content of a succession plan is fairly straight forward. A good succession plan should describe a path of action for the board to follow when it loses its CEO. Multiple options should be included to respond to the various circumstances under which the CEO might leave. These should include voluntary separation such as retirement, voluntary resignation, or transfer. Involuntary separation could include death, incapacitation, or termination for cause. For each of these possible causes for a vacancy in the CEO position, notices should be in place for use with public media and organizational stakeholders along with step-by-step action plans for the board to follow to provide immediate and long-term succession.

In the organization I served as CEO, the succession plan process was begun under my predecessor in anticipation of his eventual retirement. A consultant was engaged who guided the Board’s executive committee through the planning and development process. When they were faced with having to replace their retiring CEO, the board was very well equipped to conduct a national search for a new CEO, ensuring the highest level of integrity and transparency in the process.

You might ask, what role does the current CEO have to play in all this? In my view, it is the CEO’s responsibility to make sure that the board annually reviews the succession plan, updates it as necessary and has it on file for immediate use if necessary. I used the occasion of this annual review to go over the various components of the succession plan, update contact and responsibility lists, and in general, to make sure the document was a workable practical procedure manual that could be implemented at a moment’s notice.

I also believed that the succession process required me to have resources available to the board such as contacts at search firms, the names of staff members who would handle the practical aspects of communication, and most important, the name of the individual on the staff who could serve as an interim CEO in the event of sudden departure. This, too, is something that should be discussed in the annual plan review. Although selection of the next CEO is always a board decision, developing potential highly qualified candidates from within the organization should always be in the mind of the CEO. The difference lies between growing potential leaders and actively promoting them to the board. The first is an obligation of professional development. The latter can be perceived as self-interested manipulation.

Strategic planning

I have written a considerable amount on the subject how nonprofit organizations ought to engage in strategic planning. These can be found in the archive section of this blog. The entire ten-part series of articles on this subject has been compiled into a book which is scheduled for publication in April. It is not my purpose here to talk about the process of strategic planning as much as it is to discuss the board’s responsibility for strategic planning and how the CEO can lead and support that effort.

Every nonprofit board should be concerned about where the organization is headed and its preferred position in the future. The strategic plan describes this future and the path to achieving it in the form of strategic goals and objectives. Adopting this plan and holding the CEO accountable for its attainment are among the chief responsibilities of the nonprofit board.

 The CEO and his/her staff, however, should play a crucial role in supporting the strategic planning efforts of the board in a number of key ways:

• Research into environmental, demographic, labor, technology and economic trends, along with developments in service delivery and competition can best be done by professional staff in these areas. The strategic planning process allows the CEO and his/her staff to educate the board, demonstrate their expertise and support substantive discussion and engagement by board members in the issues facing the organization.
• The process and structure of strategic planning should be researched and proposed by the CEO to the board. There are myriad ways to engage in strategic planning and finding the right fit for the organization is an executive recommendation. This might extend to recommending the best consultant to shepherd the process with the board as well.
• Framing the language of position statements, goals, objectives, initiatives and other expressions of measurable intent should be proposed by the CEO and staff. Of course, the board ultimately approves their wording, but leaving this task as an open-ended responsibility of the board is like trying to design a camel by committee. Furthermore, it is my opinion that the board’s responsibility extends only to adopting high level position and goal statements. Tactical statements such as objectives or initiatives are management decisions and should not be determined by the board.
• Ensuring that a system is also in place that facilitates making immediate strategy decisions in the face of changes in the operating environment is the responsibility of the CEO. Providing the criteria and process for short-range decision-making will help the board deal with uncertainty and ambiguity while still functioning within the framework of the strategic plan.
• Monitoring performance around major strategic goals and initiatives and reporting progress is up to the CEO. Regular reporting to the board gives the assurance that the organization is moving toward its preferred future. This is an opportunity for the CEO to affirm and support the board’s vision with data that shows the organization’s progress.
• Finally, I would be so bold as to suggest that the majority of the CEO’s annual performance review should be done on the basis of performance around achieving the goals of the strategic plan. The CEO should have a self-interest in the accurate and frequent reporting of performance in those key areas that demonstrate the effectiveness of his/her leadership.

Determine programs and monitor quality

What the organization does and with whom it does it is ultimately a board decision. Whether such decisions are informed decisions, however, is controlled in part by the CEO. Educating the board on a regular basis about the breadth and depth of services provided by the organization, the changing demand for those and other programs and services, and the changing nature of the clientele seeking what the organization provides – these are all areas of information that support recommendations for additions, changes or deletions of programs and services offered by the organization. In this regard, such education must be grounded in solid data. I say this because I have experienced too many instances in which boards were tempted to make decisions based on anecdotal information or narratives of personal experiences from board members.

Another way the CEO can make sure the board is appropriately informed about the organization’s programs and services is to give them direct but controlled exposure to the clients and staff in the service setting. One example will suffice. As a national service provider operating in 14 states, it was the custom of my organization to hold its winter meeting in one of the warmer regions of the country and to schedule tours of facilities and programs. Visiting group homes and apartments, having dinner with clients in their homes, and visiting vocational training and employment centers put board members in direct touch with the programs and services, the clients supported by those programs and the staff who deliver those services. Staff members and clients from those areas were invited to the board banquet held in conjunction with the board’s meeting. In subsequent board meetings, when alternative service opportunities were presented to the board, I was confident that they had sufficient experience and knowledge to make an informed decision.

Such direct exposure also supported presentation of quality measures for the board to review. These quality measures were depicted in our list of Key Performance Indicators (KPIs) and presented in our reports to the board each quarter. The connection between the board’s direct experience and the quantitative measures of quality cannot be understated. Numbers must be connected to visualization of how people are positively affected. Seeing truly is believing when it comes to program development.

Ensure organizational sustainability

Sustainability has become the watchword for many nonprofit organizations. It is the technical term for the old mantra: “No money, no mission!”  Scientifically expressed, sustainability is the ratio between the perceived relative impact of the organization’s programs and services and the financial viability of those programs and services. I have described the approach to determining sustainability proposed by Zimmerman,⁴et. al. in my model for strategic planning. 

In practical terms, sustainability from the board’s perspective addresses two distinct issues, both of which involve the CEO. The first issue is the matter of funding for the mission. In most cases, revenues for nonprofits come from two main sources: government and donors. In the case of most social services, Medicare, Medicaid, Social Security, Section 8 housing funds, HUD, SSI and other sources provide grants or reimbursement for services. The CEO and his/her team are directly involved in making sure programs comply with requirements, maximize funding opportunities, and do not exceed the limits of the funds available. If these efforts require advocacy to enhance or increase public funding for needed services, the CEO should have in mind ways to engage board members appropriately and effectively to contact legislators and other government officials on behalf of the organization.

At the same time, most nonprofits must be engaged in raising non-operating revenues and the CEO plays a key role in this regard. The CEO is usually the major gift fund raiser, works with development staff to cultivate gifts and solicit donors, and is involved in fund raising events. The board also has a duty to support fund raising efforts, both personally and through contacts with potential donors. I am of the view that the CEO has an ACTIVE role to play in soliciting board members for their personal financial support, as well as engaging board members in identifying and soliciting potential donors for their support.

I worked out a schedule of periodic visits with board members to update their annual fund commitments, any major gift campaign donations, and also to discuss their planned or deferred gifts to the organization. Some might argue that it was not my place to do so as an employee. I believe that, unless you have a board chairman who is a professional fund raiser and has the time to do the task, the CEO is the person who visits each board member. 

The other aspect of sustainability has to do with the impact each program or service has on the population being served. I have already treated this subject when I addressed the board’s responsibility to ensure quality. The CEO, however, should help the board understand the difference between impact (a complex concept) and client satisfaction, mission fulfillment, or efficiency. Measuring the perceived impact of each program in relation to its financial viability can provide the basis for strategic decision-making about program expansion, enhancement or elimination. 

Ensure proper management of resources

This responsibility of the board is usually exercised by the periodic review of financial statements and operations reports. How these are presented, however, can be determined by the CEO in response to the expressed needs of the board. At minimum your board should be sufficiently trained to read the organization’s balance statements, profit and loss statements and reports of cash flow. However, in my experience, these “snapshot” reports only depicted the current status of the finances and did not sufficiently describe performance over time. As an example, when I first became a CEO, my organization was in the habit of presenting up to a dozen pages of financial report each quarter. I could see the eyes of directors begin to glaze over after about five minutes of review by the CFO. After an ad hoc board committee suggested consolidating these reports and making them more readable, I came up with a one-page net budget summary report that told our financial story at a glance. The CFO’s presentation to the board became a concise, relevant, on-point five-minute summary of our status.

In addition to financial reports, however, reporting out the current status of key performance indicators along with the four-quarter trailing performance against the ultimate performance goal showed board members how resources were being translated into performance over time and how we were tracking to achieve quantitative goals. 

At this point, I wish to interject a practice which I will describe in more detail in subsequent articles. This has to do with how I structured and prepared for board meetings. It may appear that this practice undermines the board’s responsibility to ensure appropriate management of the organization and its resources. However, in my opinion, the largest amount of time in board meetings should be spent on strategic and generative topics and not on listening to management reports. In other words, the value board members brought to the table was in the form of intellectual capital which my organization needed to achieve its preferred future. Consequently, operations and management reports were NOT discussed in quarterly board meetings. Instead, we prepared extensive board briefing books BETWEEN board meetings and invited individual questions and comments. This gave the members of my team opportunity to tell the board anything and everything they felt was important for the board to know about their area of responsibility. Operations issues which required board approval, such as facility expenditures, staff additions, etc., were consigned to a consent agenda which would be voted on as a whole unless an item was voted to be put on the table for discussion. I’ve thought about this practice as it might be expressed in various sizes of organization and have concluded that size or complexity doesn’t have much to do with it as a practice. I’d recommend it to every CEO, not matter how large or small your organization and its board.

Finally, the CEO can assist the board by conducting a periodic capacity assessment which reviews systems and management procedures to make sure the organization has what is needed to execute its programs efficiently and effectively and to manage resources prudently. Board members should be involved in such assessments as a way to gain their expertise and advice, and to demonstrate competent management by the executive team. Tools for conducting such assessments can be simple or complex and many online options are available. 

Enhance credibility/share the story

My mentor used to tell me that the CEO is really just the “story-teller in chief.” Whether it is telling the organization’s story to donors, clients, families, staff or the public, effective communication of the organization’s value to others is a significant responsibility of the CEO and board members share this duty in their spheres of influence. 

Presumably, all board members agreed to serve on your board because they believe in the value of the organization to the lives of the people it serves. However, to assume that every board member can accurately and effectively communicate the organization’s story to others is a bit naïve. As in every other aspect of the organization’s operation, board members need tools and training to become good story-tellers. In fact, my organization went a step further and included spouses/partners of board members in annual presentations and training to promote better communication and advocacy. It was our practice to invite spouses to accompany board members to out-of-town board meetings. Along with tours and direct experiences with clients, staff provided resources and training to spouses about how to advocate for our programs and how to share the mission with others.

Board members ought to work with the CEO to identify and invite donors to support the organization. Extending the network of the CEO is not a passive activity and can be supported by the CEO in regular conversations with directors about their contacts and associates and by inviting board members to accompany the CEO on development calls when the stature or credibility of the  board member in a community can be leveraged to raise support for the organization. Again, this is a process that should be mentally managed by the CEO as he or she thinks about each board member.

Ensure ethical practice

Since Sarbanes-Oxley,⁵increased attention has been given to nonprofit boards’ responsibility to make sure the organizations they serve function in a legal and ethical manner. Last week’s article touched the surface of this concern. However, the CEO has a significant responsibility to make sure that the board has processes and policies in place to fulfill this duty. The following suggestions reflect my experiences and the recommendations of others who have had to tackle this important function:

• Make sure the board has a whistle-blower policy and that there are procedures in place to ensure the proper, anonymous handling of complaints;
• Develop with the board a risk management system and reporting system so the board is regularly apprised of potential threats to the organization, as well as controls and response procedures to mitigate – or at least minimize – those threats.
• Make sure that ethical practice is included in the annual audit process. Nonprofit boards should have an audit committee which, following best practice, should also include systems which ensure ethical conduct by staff and volunteers – including the board. 
• Transparency in reporting is of paramount importance. While I did not espouse publishing the minutes of board meetings, posting 990s, audit reports and annual reports on the company’s website satisfied minimal legal duties to be open. Public access to policies and procedures ensured open and consistent adherence to organizational commitments.

Evaluate its own effectiveness

Theoretically, the CEO would seem to have little or nothing to do with how the nonprofit board evaluates its own effectiveness. As in other areas, however, I believe the CEO has an executive role to play, first in making sure that the board actually DOES evaluate its own performance, but also in how the board uses the data from self-assessment to improve its functioning.

Of course, the CEO’s success in this regard depends upon the relationship between the CEO and the board chairman and the board’s executive committee. It is awfully difficult to suggest that the board should evaluate its own performance when there are issues related to the CEO’s performance or when there exist power struggles or personality conflicts. However, assuming people are acting like adults who truly want what’s best for the organization, the CEO can do much to help the board grow.

In my case, it certainly helped that I had experience as the board chairman of my own organization. But it also served me well to have been the chair of other nonprofit boards. Regardless of experience, however, the CEO can be of great service to the board and the organization by encouraging the board’s self-evaluation. First, by being knowledgeable about best practices in nonprofit governance and second, by being able to provide tools and resources the board can use to perform this important responsibility.

How well boards measure their own effectiveness depends upon the leadership and composition of the board and how well the CEO and the board chair work together. I was very fortunate to work with board chairs and executive committees that understood this responsibility and were willing to work together to find appropriate ways to measure effectiveness. These included the following:

• We periodically used the board effectiveness survey produced by BoardSource. These can be administered online. For one fall board retreat, we even engaged a consultant from BoardSource who helped the board build a development plan around perceived areas of weakness.
• The board would occasionally use a plus/delta exercise at the end of a meeting to informally discuss what went well and what could have gone better. This provided immediate feedback to directors and the CEO about how to improve the next meeting.
• A formalized system of individual director self-evaluation and peer-evaluation was utilized when directors were up for reelection to a subsequent term. This was important for my organization because board members could conceivably serve four consecutive three-year terms. Giving the board the opportunity to provide evaluative feedback helped the incumbent realize areas in which they could become more effective.
• Last, the board should evaluate its strengths and weaknesses by creating a talent matrix when preparing to nominate new candidates for board membership. Understanding needed areas of knowledge or expertise will help focus on electing directors who can improve the board’s effectiveness.

Of course, all these effectiveness assessments will come to naught if there are not follow-up opportunities provided for board development. This is where the CEO can have a significant impact on improving board effectiveness. Identifying areas in need of education and training, finding presenters and consultants to share knowledge and develop skills, providing resources for reading or viewing and connecting board members to mentors or staff members for advice and counsel, the CEO has a very important role to play in terms of improving the board’s effectiveness.

References and Resources

¹ www.boardsource.com.   Formerly the National Center on Nonprofit Boards, this online resource is the authoritative source for all materials related to governance, board duties, fundraising, and the CEO’s relationship. BoardSource also provides board effectiveness assessment tools and consulting services.

²  www.bridgespan.com. This large consulting firm is headquartered in Atlanta, GA, and has a large library of articles and resources related to nonprofit governance.

³ www.councilofnonprofits.com. This national organization provides information around best practice in nonprofit governance and offers a large collection of online tools, articles, references and information of practical use to nonprofit boards and their CEOs.

⁴ Zimmerman, S. and Bell, J., The Sustainability Mindset. Jossey-Bass, San Francisco (2015)

^5 “Sarbanes-Oxley” refers to the Public Company Accounting Reform and Investor Protection Actand the Corporate and Auditing Accountability, Responsibility, and Transparency Act, sponsored by Senator Paul Sarbanes (D-MD) and Representative Michael Oxley (R-OH) in response to a number of major corporate scandals including Enron and WorldCom. Although focused on public corporations, nonprofit organizations quickly adopted many of the recommendations of Sarbanes-Okley to ensure ethical practices in their organizations.