Wednesday, September 23, 2015

It's hard to rock two babies

A woman I  know owns two restaurants 20 miles apart. I asked her how she manages that. “It’s hard to rock two babies,” she said.

Brian T. Moynihan, head of Bank of America beat back a serious challenge that would have required him to separate his chairmanship of the board of directors from his job as CEO. In the nonprofit world I inhabit I can't recall a single instance of this type of duality. That's because the board of a nonprofit is an agency charged with holding the organization's assets on the public's behalf. There are no shareholders.

That is not to say that nonprofits are better governed as a result of a distinction between governance and management at the very top. In BoA one might surmise that internal and external directors bring expertise to the board room and pretty much leave the CEO alone to run the company. Of course then you get the Volkswagen scandal. The tech-savvy CEO may be tossed out but where was board scrutiny? W hat did the board know and when did they know it? 

In a nonprofit there is a fundamental ambivalence that inures to boards. Are trustees there to give money, or to govern? Nonprofit CEOs, in my experience, would prefer a  board of donors over a board of governors. In the typical nonprofit the CEO plays a big role  in board recruitment - and why not? Ideally a nonprofit is staff managed and board advised. Any CEO will tell you that what they don't want from their board is micromanagement nor interference in personnel decisions. In a nonprofit achieving good governance, good giving and good getting concurrently is challenging and often one element or another is weak or altogether missing

As a nonprofit consultant and nonprofit trustee I think there are six key challenges for any board or any CEO:

Vision and strategy.
The chairman-CEO relationship.
Succession planning.
The CEO's frequency of communications to the board. (There is a difference between     data and information).
What is expected of trustees.
What trustees expect of the nonprofit.

For all I can fault in nonprofit governance and management I think we got it right on this one.