An Open Question to Board Chairs: Do You Dare to Lead?

Executive directors have thrown down the gauntlet. In “Daring to Lead 2011: A National Study of Nonprofit Executive Leadership” conducted by CompassPoint and the Meyer Foundation, only 20 percent of those surveyed reported being satisfied with their board’s performance. While a few of these executive directors might have a personality conflict with their current chair or have felt particularly frustrated with their board the day they responded, there must be something more significant going on to account for 80 percent of chief administrators indicating dissatisfaction with their boards.

Determining the underlying factor(s) is particularly important in today’s rapidly changing environment where boards must be strong, strategic and steadfast so that their organizations can be responsive and achieve relevant results. Research by the likes of Herman, Renz and Heimovics, Nobbie and Brudney and others have made very clear that there is a relationship between the effectiveness of a board and the effectiveness of the organization for which the board works. While none could prove causality, each found that highly effective organizations have highly effective boards.

I don’t believe that an organization’s effectiveness can be laid at the feet of just one person. Yet, I do believe that you, as board chair, have opportunity and influence that can be brought to bear in ways that you perhaps have not tested. Be honest with yourself. What more could you do to ensure a stronger board, and ultimately a stronger organization?

For instance, research again tells us that highly effective boards use more proven practices than less effective boards. There are a lot of accepted practices out there that are actually based on myth. Are you just propagating these or are you analyzing their effectiveness? Are you making the effort to regularly read or participate in workshops and webinars to learn about governance practices rooted in science? Are you implementing what you’ve learned? If not, why not?

As an unknown sage once said, “Hope is not a method.” You cannot afford to merely come in once a month to chair a meeting, check in occasionally with your executive director and write your column for the newsletter and expect an exceptional board to emerge. Nor can you rely on years of experience with a multitude of boards. The world has changed too much. If you dare to lead, tell us what you are doing differently and what impact it has made.

Should We Be Considering Professional Board Chairs?

I recently returned from Australia where I facilitated a series of master classes in governance. While the US and Australian systems are similar, there are some distinct differences. One, to which I was introduced this trip, is a trend toward hiring professional board chairs. Though not wide-spread, it is prevalent enough that there are actually companies there that provide such individuals to organizations as required.

Clearly, there are advantages to such a concept. You ostensibly get a board chair that is unbiased, skilled and willing to give the time to the job since he or she is getting paid to do it. One would expect that such a person keeps up with the latest governance trends and has a broad perspective from working with different groups – both conditions that can lead to increased board effectiveness.

Some of the drawbacks are obvious, but not necessarily insurmountable. One board member complained to me that the professional board chair working in his organization was working with twenty other boards and often came to meetings unsure of which organization’s meeting she was actually at! I would think that far fewer than twenty boards may still be too many for a board chair to handle well. Of course, this is a relatively easy problem to circumvent. The board has an obligation to do its due diligence. A single question would have determined that this woman was over-committed. Still, in an emerging field where there may not be that many qualified individuals available for hire, organizations desperate for leadership may opt to move forward anyway and take their chances.

I would be concerned that any board chair for hire actually has the facilitation skills necessary to do the job effectively and is familiar with today’s proven governance practices. I meet a lot of people who tell me that they have chaired many boards over the years and know what they are doing. Unfortunately, I have observed that far too many of these individuals are mired in how things were done back in the days when they began their board service and are totally unaware of practices common throughout the sector now.

I also see the potential for conflict of interest. A professional board chair might work for several organizations with similar missions. While it could be advantageous to hire someone who has a depth of experience in your organization’s mission area, how can you be sure that your ideas, deliberations and decisions will remain in-house until they are ready to be shared with the community? Of course, this could prove an issue with anyone in the boardroom and if you deal with a true professional, this should not be a problem. More critically, the board chair is privy to discussions that can personally impact him or her, for instance whether the contract should be renewed and at what rate. If the organization has policies for dealing with such situations, this also can be handled in a transparent and judicious manner. Australia has the same duty of loyalty requirement we do in the US and conflict of interest has not been a sticking point for the nonprofits in that country.

The culture in the US may be the biggest barrier to such an idea taking hold here. I can foresee donors reacting negatively to the idea of having their money go to pay a professional board chair. So many already resent money being spent on even the most critical administrative fees. Link this to the expectation that has taken hold here – but not in Australia – that all board members must make a personal contribution and we have yet another potential obstacle. This expectation would imply the professional must “pay to play,” something that is unethical if not illegal. Yet, if the organization excludes the chair from the requirement, resentment is sure to build in the other board members who are held to the giving standard. They may already be upset, wondering why they shouldn’t get paid for their time.

Then, who wants to be the first to test the IRS response? Surely, as paying for a professional board chair is not accepted practice in the US, the board and organization may be liable for a hefty excise tax on that fee if it is deemed excess benefit.

Yet, I can’t help thinking about the potential benefit – boards running more efficiently and effectively. Acceptance of such a practice might even stimulate new jobs as individuals with the appropriate skills move into this arena and programs crop up to certify these professional board chairs!

Is this a bad idea if no organization is required to move in this direction or consider itself locked into a paid chair if it has used such a service in the past but now has the appropriate leadership in-house? What do you think?