04 September 2008

Should an executive director be a voting member of the board?

Welcome back!

The answer to the question of whether the CEO, often called an executive director in nonprofit organizations, should be a voting member of the board of directors is found in defining the role of the CEO and the role of the board.

The leadership role of the board is to define why the organization exists, what good is created, who or what will benefit, and at what cost that good will be created. Once they define this organizational result, it is to monitor the extent to which that change is effected in the world and that unacceptable situations and circumstances are avoided. The board’s work is thinking work. It demands discipline, intellectual vigor, and unconflicted commitment to the cause of the organization that is served.

The leadership role of the CEO is in operations—leading the staff of the organization to accomplish the results required by the board and to avoid unacceptable actions even if they work. Authority to get the job done and accountability to the “moral ownership” of the organization through the board of directors define the CEO’s role.

With this clear definition of roles, the CEO has the authority necessary to be a strong leader in the organization. He or she is likely the most informed expert at the table during any board or committee meeting regarding any topic related to the operations of the organization. When the CEO has both the authority and accountability that is clearly articulated and understood there is no reason that a vote on the board would be an effective tool for persuasion whether that vote is in the majority or minority of the board’s vote on any given decision. This is the case with the founding CEO or one that the board has hired.

I recommend that nonprofit boards use a comprehensive model of governance from the beginning whether they consider themselves a “working” board or a policy board. The only thing that a board in name only does is it sends the message to the IRS and congress that the nonprofit world needs more regulation from the federal government. That is not a good plan for governance. The responsibilities required of any board and the servant-leaders that populate them is important and one that should be well considered. The relationship with the CEO is to be both safe and empowering.

It would be great to talk further about the foundational function of the board of directors in your nonprofit organization. Please feel free to contact me directly.

Your ideas matter here! Please leave a comment.

5 comments:

Anonymous said...

"No cooperative using the
Policy Governance model allows their general manager to be a voting
member of their board."

I know this post is about the executive director as a voting member of the board, so I'm a little off topic here. But would you agree with the above quote?

Glen Peterson said...

I cannot think of any good reason for a staff member, even one filling the function of CEO, to serve as a voting board member. The reason has more to do with the role difference between the CEO and that of the board of directors. It does make sense to me the the CEO, in the case of a cooperative's GM, to have a key leadership role to the board as the link to the operations of the coop and someone with expertise in the work of the coop.

Some clients have gone against my advice and given the CEO voting member rights. It really doesn't seem to serve any good purpose. What are the specifics of your situation? How has the GM exercised his or her vote in the face of the board's majority or minority vote?

I hope that helps. The post that I have here was in response to a specific question on LinkedIn.

apple said...
This comment has been removed by a blog administrator.
IndyChristian said...

Glen... Sorry I'm just now seeing this post. But it's a great question to kick around.

I suspect I would side with you 99% of the time, but in this case at least let me suggest one good reason for allowing your CEO to vote...

In fact, I believe you've made the case: The E.D. is the most all-around knowledgeable person on the board, and the one who typically has the highest commitment level in the organization. He/she knows the vision first-hand and is passionate about accomplishing it. To NOT let him/her vote is to set up the appearance of an adversarial relationship. Moreover the CEO can too easily distance themselves from whole-heartedly implementing policies they've had no hand in approving.

I believe that the organizational culture is vitally vitally important -- and very especially in ministries. Love oils that engine. I would do nothing to set up an adversarial relationship in a ministry. If something really needs addressed adversarially, there are still plenty of board votes to hold the CEO accountable.

On our urban cafe ministry board, we try diligently to find consensus... even unanimity... before voting. And frankly, if you set up such a culture and bring reasonable people to the table and give them all the same good information, not surprisingly they'll reach the same conclusions.

I like what I've been told is an African proverb...

"If you want to go quickly, go alone. If you want to go far, go together."

Glen Peterson said...

Neil,

You make some good points regarding relationship between the chief executive and the board. Some of the solutions you suggest might be helpful. I believe that the real solution is defining the roles of each as noncompetitive. With a clear division of these roles, clear delegation and empowerment there is little need for the CEO to vote. In fact, any scenario that I can think of where the CEO might be asked to vote to break a tie would diminish the leadership of the CEO.

Certainly the CEO in most organizations is the person with the most direct knowledge of operations and most any subject matter that the board may be considering. That is the way the CEO will lead, better than voting in my opinion.

If you are going to be in Miami at CCDA I will be presenting a workshop on board governance on Friday, October 24, at 3 pm in the Grenada room. Come by and say hello.