THE BLOG
02/24/2014 01:10 pm ET | Updated Apr 26, 2014

A Nonprofit Board's Most Important Job!

Many people believe as I do that a nonprofit board's job is to find the best possible person to act as CEO of the organization, then stand back and let that person manage. If your board is in agreement, here are guidelines for action:

Recruit Widely: Develop a rigorous vetting process. Well before the search begins, make certain that potential internal candidates have had an opportunity to demonstrate management acumen. If an internal candidate is less qualified than an external one, don't let the decision be swayed by the fact that the internal candidate would be less costly to employ.

Understanding The Partnership: The need for the CEO and Board to operate within a partnership framework is well documented and accepted. However, the CEO is both the senior staff manager and a de facto representative in the board-staff relationship. Normal communications to the staff must be through the CEO. The CEO can't be an insecure manager by withholding negative information from the board.

A Nonprofit Board Has An Overview Responsibility: Sometimes, this responsibility can devolve into micromanagement of the management and staff. If the overview, policy or strategy functions of the board are not being adequately executed, a lead director may need to be appointed to help focus on them. (For more information on this position, see http://bit.ly/13Dsd3v)

In terms of organization and CEO measurement, the board must seek data and information on outcomes and impacts, not details on processes. Reviewing qualitative impacts as well as quantitative is becoming more important for both NFPs and FPs.
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Nobody Does His/Her Job Perfectly: The board needs to be highly tolerant of inconsequential CEO mistakes. However, if these mistakes persist over time, the board needs to assess reasons for their continuing. Major errors need immediate investigation, and the board also must be honest with itself about its culpability in its due diligence process in related to the error. Audit committees have increasingly heavy responsibilities. They need to initiate investigations/actions, or possibly face personal liability for lacking "duty of care" and fiduciary responsibility . ( http://bit.ly/1b7HVsr )

The CEO And Staff Must Be Evaluated Fairly: In a nonprofit situation, this must be done in partnership, not hierarchically. Everybody must understand the "rules of the game." Outcomes and impacts need to be related to the mission of the organization.

The Board and CEO Must Partner On Fundraising: An effective CEO must, in the 21st century, be the face of the organization to accomplish its mission. Nonprofit directors are part-time stewards. Consequently the CEO must accept a significant responsibility for fundraising. (http://huff.to/1oA5eid)

These guidelines can be useful to nonprofit boards in self-evaluation projects. They can determine whether or not the board is facing the realities of standing back and letting the CEO manage. The CEO should have full operational authority, and the staff should function without an atmosphere of board micromanagement.