Nonprofit staffs have become increasingly professionalized over the last ten to twenty years. It is worth a brief discussion about the possible reasons for this trend and the effect on nonprofit boards. Nonprofits are faced with increasing regulatory obstacles. The issues that must be dealt with increasingly require an educated and experienced executive director to oversee the operations and provide professional guidance to the board to make decisions that are in the best interests of the organization. The nonprofit may receive funding from governmental sources that require a specific knowledge of the regulatory and political environment. Programs offered by the organization may be very specialized and complex that requires a knowledgeable individual to be able to properly monitor and manage them. The board may have the experience to handle some or all of these issues. However, volunteer boards have other responsibilities that do not allow them to manage the day-to-day operations of a nonprofit. An experienced executive director with professional credentials is an attractive option given the aforementioned environment.
Professional Chief Executive Officers, CEO’s, can give a nonprofit board the tools it needs to focus on the bigger picture. According to the article by Judith Miller-Milleson, Understanding the Behavior of Nonprofit Boards of Directors: A Theory-Based Approach (2003. Nonprofit and Voluntary Sector Quarterly), nonprofit boards for effective organizations were engaged in best practices including policy formation, strategic planning, program monitoring, financial planning and control, resource procurement, board development, and dispute resolution (p. 525). These practices all relate to higher-level decision making. The most effective boards do not get into the day-to-day operations of the organization. A professional CEO allows the board to focus on these best practices by feeling assured that the operations are being managed effectively. Ms. Miller-Milleson also states the CEO acts as the agent of the board. The board should keep the control of decisions separate from the management (p. 528). The CEO should deal with the implementation and initiation of the board’s decisions, and the board should keep the authority to ratify and monitor the CEO and operations. The CEO should be properly monitored to ensure the board is receiving accurate and timely information on the organization’s performance.
Board’s with a tenured and experienced CEO have the tendency to allow more control to the CEO. This can also be exacerbated by the size and stability of the organization. The board must not be a rubber-stamp for the CEO. The article by Ann C. Williams, New and Improved?: A Case Study of Nonprofit Policy Governance (2010. Human Organization, Vol. 69, No. 3), gives a prime example of the dangers when a CEO is given too much power. In this case study, a women’s human service nonprofit organization implemented The Carver Method. The CEO had a proven track record of success with the organization. The board had complete trust and faith in the CEO and gave her free reign to implement this new method with little monitoring or feedback from the CEO. The board’s trust was misplaced and the CEO almost bankrupted the organization. The board failed to properly monitor the CEO’s performance and the operations of the organization. True, the board is reliant on the information received by the CEO, but it is the board’s responsibility to ensure they are receiving sufficient information to make the determination of the organization’s accomplishments.
In summation, professional CEO’s can be very beneficial to the board by allowing it to focus on strategic and visionary activities. The board should set the mission, policies, and direction of the organization. The CEO should manage the resources for the organization to accomplish the goals and fulfill the mission set forth by the board. The blurring of these lines between board and CEO authority creates potential for organizational strife. An effective nonprofit organization needs to have clear duties set forth between the board and the CEO.