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Balancing governance binghamton 6 2011


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Balancing governance binghamton 6 2011

  1. 1. Balancing Good Governance & Management for Nonprofits<br />June 9, 2011 | Binghamton, NY<br />Presented by<br />Doug Sauer, CEO<br /> | 800.515.5012<br />
  2. 2. Key Learning Objectives<br />Understanding ways to effectively balance the authority & responsibilities of the board & management <br />Learn the keys to balancing proactive leadership with good management <br />Gain awareness of ways to enhance mutually constructive & supportive communication between the board & executive leadership<br />Become aware of best practices for executive evaluation & compensation<br />Be prepared for managing staff leadership transition<br />
  3. 3. Basic Definitions<br />Governing  “to exercise authority or control”<br />Managing  “To bring about or succeed in accomplishing”<br />Leading  “Coming in advance of others”<br />
  4. 4. “Management works in the system; leadership works on the system.”Stephen R. Covey<br />
  5. 5. Nonprofit Leadership is a Process that is…<br />Defined by the mission, history, culture & services of the nonprofit <br />A team experience where power & roles are distributed <br />Influenced by position, personality, style, knowledge, & skills<br />
  6. 6. Ethical Nonprofit Leadership<br />Actions are consistent with the nonprofit’s mission, values, promises & obligations<br />Actions have Integrity: Not driven or influenced by personal interests, gain or inurement <br />Adheres beyond the “letter” of legal & regulatory requirements to “the spirit of”<br />Focuses on the question of what is the “right” or “correct” thing to do<br />Documents decision-making processes & actions to demonstrate & record proper conduct <br />
  7. 7. “Management is doing things right; leadership is doing the right things.”Peter Drucker<br />
  8. 8. Balancing Roles for Organizational Leadership<br />"Managers Who Lead; Leaders Who Manage"<br />Managers<br />Leaders<br />Vision<br />
  9. 9. Building Your Leadership Team<br />To harness the collective talent & energy of your team members, both board & staff, to accomplish your mission, vision, goals & objectives<br />
  10. 10. Leadership Starts with the Board<br />Volunteer Leaders who advance the Mission in a Responsible Manner<br />Duties of the Fiduciary<br />Care <br />Loyalty <br />Obedience<br />
  11. 11. The Board-Staff Leadership Team<br />Board of Directors<br />Board Officers<br />Committee Chairs<br />Executive Director/CEO<br />Assistant/Deputy Director<br />Fiscal Officer<br />Top Division/Program Heads<br />Clearly define decision authority along with<br />responsibilities in bylaws, job descriptions & policies<br />
  12. 12. The Leadership Team… <br />Sees & understands the big picture - external & internal <br />Motivates - inspires trust & confidence in staff, board members, constituencies & stakeholders<br />Recognizes own limitations; recruits & uses staff & board members accordingly<br />
  13. 13. The Leadership Team… (continued)<br />Mobilizes & uses resources wisely<br />Governs & manages well – holds self & others accountable<br />Resolves crisis & embraces change<br />Provides vision & strategic direction<br />
  14. 14. “Management is efficiency in climbing the ladder of success; Leadership determines whether the ladder is leaning against the right wall.”<br />Stephen Covey <br />
  15. 15. Major Governance-Management Areas<br />Board Management & Development<br />Human Resources<br />Finances/Fixed Assets<br />Resource Development<br />Stakeholder-Constituent Representation<br />Programs & Services<br />Strategic Directions & Planning<br />
  16. 16. Policy & Implementation Spheres<br />Board of Directors<br />Policy-making<br />Area of Shared Responsibilities<br />Executive Director/CEO<br />Operating <br /> Policies<br />Area of Shared Responsibilities<br />Staff<br />Implementation<br />
  17. 17. Balancing Leading with Managing<br /> Managing…<br /><ul><li>See the trees in the forest
  18. 18. Maintain systems
  19. 19. Control & tinkers
  20. 20. Manage crises
  21. 21. Seek efficiencies
  22. 22. Focus on procedures & personalities</li></ul>Leading…<br /><ul><li>See the forest through the trees
  23. 23. Change systems
  24. 24. Shape & influence
  25. 25. Turn crises into opportunities
  26. 26. Seek investment
  27. 27. Focus on vision & concepts</li></li></ul><li>
  28. 28. The ED/CEO<br />At-will or contract employee<br />Is accountable for all organizational performance & exercises authority as designated by the board<br />Accomplishes expectations as established by board policies & directions<br />ED’s performance is significantly related to organizational performance, at both the board & operational level<br />
  29. 29. Clearly Define ED/CEO’s Authority vis-à-vis the Board<br />Define general & lasting parameters in bylaws<br />Have updated, board approved job description or clearly defined contract<br />
  30. 30. State Key ED/CEO’s Job Responsibilities in the Bylaws<br />Chief paid administrative officer<br />Administers day-to-day affairs (financial, personnel, program, etc.) within policies established by board<br />Ensures compliant & ethical implementation of board policies & directives & all applicable laws & contractual requirements<br />Hires, supervises, evaluates, & terminates all staff <br />Inform, support & advise the board & its committees<br />Safeguards fiduciary obligations & Signatory<br />
  31. 31. Executive Limitations<br />Constraints on executive authority which establish prudent & ethical boundaries. Within these boundaries lie the “acceptable” arena of executive activity & decisions<br />To not risk losses beyond those necessary in the normal course of business or as otherwise determined by the board<br />
  32. 32. The Delicate Balance of the Board<br />Board of Directors<br />Board Committees<br />Executive Committee<br />Officers:<br />Secretary<br />Treasurer<br />Vice President<br />President<br />Critical Relationship Center<br />Executive Director/CEO<br />Assistant Director<br />Fiscal Officer<br />Managerial Staff<br />Program and Support Staff<br />
  33. 33. Core Elements to Positive Board-ED/CEO Relations <br /><ul><li>Mutual trust & confidence – earned & tested
  34. 34. Openness
  35. 35. Mutual understanding of & respect for responsibilities, boundaries & limitations
  36. 36. Define & follow an accountability structure
  37. 37. Competence
  38. 38. Style “fit” – managerial, leader, entrepreneurial, decision-making methods, personality, etc.</li></li></ul><li>Ways to Support the ED/CEO<br />View as a mutually supportive partner<br />Convey sense that challenges are shared<br />State appreciation of achievements<br />Encourage professional growth<br />Recognize and respond to administrative needs<br />Watchdog workload<br />Encourage earned time off<br />Evaluate regularly<br />
  39. 39. Tips for Evaluating the ED/CEO<br />Conduct written evaluations at least annually<br />Design instrument that is comprehensive, goal oriented & looks at past as well as future<br />Consider including a written self-evaluation<br />Design process that involves the board’s leadership & informs all board members<br />Avoid involving staff & one board member or officer doing the evaluation<br />Assign committee in bylaws – Executive and/or Compensation Committee<br />
  40. 40. Tips for Evaluating the ED/CEO (continued)<br />Meet without the ED/CEO to prepare & anticipate sensitive and confidential matters<br />Handle serious problems or disciplinary issues carefully….be risk management conscious<br />Link compensation to the evaluation<br />Allow limited ED/CEO feedback regarding the board’s functioning & how it relates to his or her performance<br />
  41. 41. Considerations for Determining Executive Compensation<br /><ul><li>Salary vs. Benefits vs. Perks: “Total Compensation”
  42. 42. IRS 990 Key Employee Report; “Excess Compensation”
  43. 43. Evaluation results with respect to individual & organizational performance
  44. 44. Current & future needs & directions of the organization
  45. 45. Job requirements
  46. 46. Competitive labor market
  47. 47. Equity
  48. 48. IRS & state agency criteria
  49. 49. Funder or donor perception
  50. 50. Should be determined by full board action</li></li></ul><li>ED/CEO Succession Planning<br /><ul><li>Goal is to maintain continuity with minimal disruption in an emergency, temporary or permanent transition
  51. 51. Control the message to the various audiences
  52. 52. Expect the unexpected!
  53. 53. Maximize opportunities for positive change
  54. 54. Create framework for search process; who is going to do what & how
  55. 55. Consider an Interim Executive
  56. 56. Then hire the right candidate</li></li></ul><li>Role of ED/CEO in Succession Planning<br />ED/CEO should have plans for back-up when he or she is not available<br />ED/CEO needs to think succession & back-up when key management staff turn-over occurs<br />
  57. 57. Key Points to Remember to Board-ED Relations<br />To act in good faith & with the diligence, care, loyalty, & skill which reasonable persons would exercise under similar circumstances<br />The board as a collective is the employer as a collective, not individual members <br />The ED/CEO is the board’s key employee & partner<br />Both the board & ED/CEO provide leadership<br />The board governs <br />The ED/CEO contributes to governance & is accountable to the board for all management & staff functions <br />The interactions between the board & ED/CEO sets the organizational climate <br />
  58. 58. Added Ideas, Comments, Questions?<br />