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Sunday, June 26, 2011

The Board/CEO Relationship - Emily

The relationship between a board of directors for a nonprofit organization and the CEO is a complex one. There are expectations by both parties for the other. I would like to take a moment to examine this relationship and discuss the positive and negative aspects.

One expectation is that the board will serve as a reliable “go to” for the CEO in times where guidance is needed. Another is the board will do its part in planning while the CEO implements. This expectation is accurate if the CEO’s priorities line up with the boards. Sometimes this is not the case. In the article by Du Bois, et al (2009), there is an example of how the CEO (or headmasters) was concerned with different objectives than the board of directors (chairs). The headmasters were concerned with objectives directly related to day-to-day operations, whereas the boards were interested in ideological values and school output. This is a natural occurrence given the roles of the headmasters and boards. Headmasters were impacted daily by staff and pupil satisfaction, so theses items were most important to them. On the other hand, board members were removed from these items so they were not as important as other, more prestigious objectives. It is clear then, that the relationship between the board and the CEO is dynamic just in the case of differing priorities. Where these differences can become harmonious is when each party recognizes that: the fulfillments of all of the objectives are for the betterment of the organization.

An interesting dynamic to consider is “founder’s syndrome”. “Founder’s syndrome refers to the influential powers and privileges that the founder exercises or that others attribute to the founder” (Block and Rosenburg, 2002). One issue to look at is the power (whether good or bad) that the founder possesses just by being the founder. No one else may have had the original vision. Board members, staff, or the CEO may not feel comfortable in suggesting new or different ideas to the founder. Another interesting point to not from the Block and Rosenburg article is the governance differenced in organizations where the founder is active. Only 22 percent of founder-led organizations had term limits for board members, compared to 50 percent of non-founder-led organizations. Keeping board members year after year allowes the founder to maintain control of what goes on in the organization. This may seem like a good idea to them, but non-diversified, overtime will become stagnant.

As I mentioned, board and CEO relationships have many facets. I gave examples of just a few ways the dynamics can facilitate or impede the success of a nonprofit organization. The take-away message is that open communication about expectations, mission, and roles is vital to making the relationship constrictive

Block, S. R., Rosenburg, S. (2002). Toward an understanding of founder’s syndrome: An assessment of power and privilege among founders of nonprofit organizations. Nonprofit Management & Leadership, 12(4), 353-368.

Du Bois, C., Caers, R., Jegers, M., De Cooman, R., DeGieter, R. P. (2009). Agency conflicts between board and manager: A discrete choice experiment in Flemish nonprofit schools. Nonprofit Management & Leadership, 20(2), 165-183.

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