Traditional nonprofit organizations have a very structured organizational hierarchy that includes a CEO and a board of directors. In the vast majority of cases, the board of directors has the ability to direct, hire, and terminate a CEO at any given time, while some nonprofits elect to have short-term volunteer board members who choose to take a more hands-off approach and allow the CEO to make day-to-day operational decisions.
Given the close relationship between the two parties, building an effective partnership is extremely important for an organization trying to grow and move forward. Many leaders have achieved greatness by their ability to inspire and manage those below them. However, with the increased sovereignty of boards, its now more important than ever to be able to “manage up”. It is necessary to influence and guide the board, leading them through effective and efficient decision-making processes. A recent article by Michael Useem, Wharton Business School, outlined how CEOs can best manage their boards.
- Establish credibility with employees: Before a CEO can lead up; they must first lead down, maintaining the credibility and faith of their employees. The Board of Directors will be less inclined to be guided by their CEO if they don’t see that they have a solid, reputable influence on the rest of the organization.
- Recruit strategic minded directors: To have a great board, you need to find great individuals to staff it. When the room is filled with strategic thinkers who can analyze risk and recognize the value of implementating organization changes valuable progress can be made. When the board is knowledgeable in all business functions they become a resource for at the CEO to turn to for guidance.
- Restructure the board: Not every board is created equal. As organizational goals change, so should the board. The skills required of a board member to operate the company within steady times are very different than what might be required during a time of expansion or change. Don’t be afraid to restructure your team, especially if it means that you will be equipped to conquer your company’s current challenges. This is vital to the overall success of both the board and the company.
- Ensure board quality: Maintaining an effective board can be difficult. Potential directors may shine during the selection process but may be a non-contributor once installed. Establishing goals for your organization is a great way to ensure that everyone stays on task at all times. Weak links in a board can mean the failure of key events or initiatives. It is important to fully vet all board members to avoid a negative impact on the organization.
As the amount of board oversight increases, it becomes key for CEOs to effectively work with them to avoid needless bureaucracy and ensure an effective partnership that cultivates innovation and growth. The overall vision of the organization is maintained and strived for with the help of the industry leaders sitting on the board. By creating a partnership of trust and creditability, CEOs can manage up and ensure the needs of the organization are always met.