When thinking of the governance of a nonprofit organization, there are two central parts – the Board of Directors and the Chief Executive Officer (CEO). For the purposes of this blog, we’re going to call the Board of Directors the “dog” and the CEO its “tail”. Many resources on governance for nonprofit organizations talk about the balance of power between the Board and its CEO. I think it is fair to say that the expectation is that the Board lead the CEO down the path of following its mission and meeting its goals. Therefore, we would say that the dog wags its tail – the dog is the one that leads the tail into motion.
However, most of us know that this is not always the case. There are situations of CEO dominated governance. Where the Board is often passive, not wanting to make decisions and just sitting back and letting the CEO guide the organization. And why does this happen? Maybe because the Board doesn’t know what’s expected of them. Or because the Board has a lot of trust in the CEO and believes he (or she) can do no wrong. Or maybe even when the Board feels as though the CEO has the specific expertise needed for the field that the other Board members don’t possess. Whatever the reason may be, it is definite that there are times when the tail wags the dog.
One of the things literature has pointed out time and time again is that when a Board quits functioning as a Board and allows the CEO the control of the organization, that it is a recipe for disaster. It is imperative that the board acts in such a way to provide accountability to the CEO. Failure to do so has led to nonprofit organizations experiencing mission drift, financial mismanagement, and poor overall management. Several times throughout the semester we have read about nonprofit organizations failing and it seems a consistent theme emerges in most of them. When the CEO does not provide transparency to the board through access to financial documents and regular reports, the Board ultimately gets sideswiped by an unexpected crisis.
But is it best for the Board to always be leading the nonprofit? Is the dog always the one wagging its tail? If anyone has seen a truly happy and excited dog, they know that the tail does sometimes wag the dog. When a dog is very excited, their tail is wagging so hard that their whole body shakes and wiggles. And isn’t it the goal of nonprofits to run happy and excited organizations? Places where people want to come to work every day and love the cause they are working for?
So how do you achieve the most effective nonprofit organization – an organization that is so happy that when the dog wags its tail its whole body wiggles in excitement? Transparency and Communication. The Board and the CEO have to work together openly and honestly – sharing information, making decisions together, and having dialogue about goals and struggles. They have to meet regularly, assess their plan, and make adjustments to their course. They anticipate problems, and plan for solutions. They are active working boards with an active working CEO. In these organizations, you may have a hard time answering the question – who makes most of the decisions for the nonprofit agency? And that is a good thing. It means there is a strong relationship between both parts. That the dog is not disjointed and is working as one. It should be the goal of all organizations to have their Board of Directors and CEO working so closely together that when the dog wags its tail, the tail wags the rest of the body in utter excitement.