How to strengthen the most important relationship in your nonprofit

How to strengthen the most important relationship in your nonprofit

Steven Bowman Managing Director Conscious Governance

How to strengthen the most important relationship in your nonprofit Steven Bowman discusses key strategies for creating unity in the board room and pragmatic advice for every CEO and Chair to follow.

The relationship between the nonprofit Board Chair and the CEO is arguably the most important relationship in the organization.

There have been many instances, both public and anecdotal, where this relationship has broken down, usually with either the CEO resigning (literally or “euphemistically”) or the Chair resigning or not being re-elected.

Our experience is usually the nonprofit CEO suffers the fallout. In turn, this whole issue can be debilitating for the organization, its reputation and the loss of focus at a strategic and operational level.

As both a Board Chair and also as a CEO, I have found the best advice given to me was by Bob Joss. At the time, he was CEO of Westpac Bank and Chair of my Board of the Australasian Institute of Banking and Finance, now Dean at Stanford University.

When asked what the relationship should be between the Chair and CEO (he was Chair, I was CEO), he replied: "It really is very easy, Steve. It is a relationship with only one rule…No surprises…because that will only ever happen once."

This translates into four pieces of very practical advice.

1. Ask questions Ensure when the Chair first takes the position, that you as CEO and the Chair have a discussion about how it would best work for both of you. Be willing, as the CEO, to ask questions of the Chair regarding their personal expectations of the position.

Some questions to ask of the new Chair might include:

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What do you require from this position as Chair?

What does the Chair position require of you as a person?

What do you require from me as CEO? From your point of view as a Chair, what do I as CEO require of you as Chair?

All these questions should be addressed by the Chair. These questions facilitate the Chair to perceive the responsibilities and possibilities of the Chair position from various points of view.

2. No Surprises Ensure the Chair is the one you first go to with any potential "surprises". This might be in the form of a call from the media, a potential issue with constituents or a change in strategic assumptions.

3. Board Agenda Briefings Ensure you brief the Chair on any potential surprises and issues in the agenda of each Board meeting, prior to the meeting. It is usually the CEO or company secretary that develops the agenda, but it should be the Chairman who signs off on the agenda, and it should go out under the Chair’s signature. In the end, it is the Chair’s responsibility. You should also advise the Chair of any potential conflicts of interest likely to arise during the Board meeting and options for dealing with them.

For those Chairs that are not used to dealing with conflict of interest, I have provided a useful checklist that might prove useful for the first three or four meetings, until the Chair is comfortable dealing with these types of issues.

4. Governance Subcommittee Develop a Governance (or CEO/Board Evaluation) subcommittee of the Board. It is common for the Chair to be on this subcommittee, and quite often they Chair this subcommittee as well. This subcommittee is responsible for both the Board and CEO succession planning, performance management, and evaluation.

One of the most common reasons a CEO loses their job is when they have a disagreement (which they may not even be fully aware of) with the Board Chairman, or lose the confidence of the Board. This Board subcommittee is primarily charged with dealing with these issues. These responsibilities should not be vested in the Chair alone.

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