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Tuesday, June 21, 2011

Trust and Distrust between the Board and the CEO - Amy

One definition of trust provided by the dictionary is: “assured reliance on the character, ability, strength, or truth of someone or something.” When considering the relationship between a board of directors and the chief executive officer, most board chairman would agree that they want a relationship with the CEO that includes integrity and having a reliance on the abilities of the CEO. The board selects the CEO of its organization because that person has demonstrated a distinct set of skills and abilities, that often includes being able to manage an organization and handle difficult tasks. All boards want to be able to trust their CEO.

In the Reid & Turbide article entitled “Board/Staff Relationships in a Growth Crisis: Implications for Nonprofit Governance”, the concept that a Board needs to have a certain amount of distrust in their CEO is also discussed. I have not been comfortable with the term “distrust.” The definition of distrust is exactly what it sounds like – the opposite of trust – to lack or (have an) absence of trust ( By breaking down the previous definition of trust, this means that the board does not believe the CEO has integrity, character, or the ability to the do the job. This means that everything we just talked about regarding needing to be able to trust the CEO of an organization is incorrect.

When I read the Reid & Turbide article, I couldn’t help but agree with their assessment that there needs to be a relationship between the Board and the CEO where the CEO is held accountable by the board and the board does not blindly agree to everything the CEO pitches or provides to them. There have been numerous instances where a board has placed too much faith in the CEO of the organization and the end result has been the downfall of the organization. While some of these organizations are not named, they are described in articles and case studies.

I feel strongly that it is beneficial to have a give and take relationship between any non-profit CEO and its board. I do not think that describing this relationship as a Trust-Distrust relationship is the most effective of descriptions. Maybe a better way to describe the ideal relationship between a Board and its CEO is a belief-disbelief relationship. When you have a belief in someone, there is a “state or habit of mind in which trust or confidence is placed in some person or thing.” I think it would be fair to characterize a Boards’ relationship with its CEO has being a habit. Over a period of time, the CEO shows that he deserves the trust of the Board. He does this through being truthful, honest, and trustworthy. He, in fact, embodies the description of “trust”. The antithesis of belief is disbelief. However, now instead of completely untrusting the person, you only doubt a belief or idea that they hold. gives us this definition to go by, “a feeling that you do not or cannot believe or accept that something is true or real.” In the context of the relationship between a CEO and board, this terminology makes more sense.

The goal of having the Board hold the CEO accountable is to make sure that they are complying with the mission of the organization and that they are doing what is in the best interest of the nonprofit. We have seen time and again that when a board blindly trusts its CEO, there are lapses in judgment that lead to the downfall of the agency. But to have some disbelief that everything the CEO gives you or tells you is true, allows for the hard questions to be asked and a sense of accountability to remain. After all, this accountability between the board and CEO is part of what makes a nonprofit effective.

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