A Series of Case Studies from Effective Leadership for Nonprofit Organizations
After many years of consulting, I came across a persistent problem in many organizations. Executive directors and boards often struggled to understand the dynamics of their relationships. Sometimes the board would steam roll the executive director, asserting the legal authority of trustees. In other cases, strong executive directors would side-step the board, making unilateral decisions with little or no consultation. This led to my writing of a book attempting to define the ideal relationship between boards and executive directors—I call it the “magic partnership” as outlined in the graphic below.
– Dr. Thomas Wolf
The following cases outline some of the dynamics of the magic, ideal relationship between boards and executive directors.
Evaluation and Coaching
This case illuminates various management and governance challenges and how they have been addressed, illustrating how a board can help an otherwise effective executive director improve clear deficiencies in his performance.
– Dr. Thomas Wolf
Boris was the executive director of a nonprofit organization that provided theatrical performances throughout the summer to tens of thousands of people in seven states. Generally, Boris was the model executive director. He had been with his organization for almost a decade, and as one board member put it, “like an old shoe, he fit well.” He presided over a $2 million budget, a full-time staff of ten, and a seasonal staff of over seventy who carried out the various summer activities. With so many individuals under his jurisdiction spread over such a large geographic area, and with many of them moving from one location to another, Boris, and the board, felt it was imperative to develop detailed personnel policies that ensured the employees knew where they stood and the organization was protected. The completion of the personnel manual was an accomplishment much celebrated by board and staff.
But there was another reason why the personnel manual was important. Boris was often not a good supervisor, and the board thought that providing him with a kind of guidebook with documented policies might help. He was often too busy to give explicit instructions to those he supervised, and then he was impatient when employees didn’t seem to understand what he wanted. Most could deal with his idiosyncrasies—“Boris is just being Boris,” they joked. But for one employee, it was no joking matter. Boris and Joan had an increasingly toxic working relationship.
Boris’s side of the story was that Joan just wouldn’t follow directions and always made excuses. Often, when he asked her why a particular task had not been completed, she would tell him that she had done exactly what he had asked, but that those instructions had been garbled and confusing. “If you didn’t get what you wanted, it is not my fault.” In other cases, she said that the task had been unreasonable, impossible to accomplish in the time allotted. On some occasions, Boris would get angry, setting off Joan, who would return to her office, and according to Boris, “throw a tantrum, upsetting her colleagues.”
Finally, it just became too much for Boris. Joan made what he considered a lame excuse one time too many. He lost his temper and fired Joan on the spot, telling her to take her things and go. The next day, Boris had the bookkeeper mail Joan her check for back pay (including unused vacation time), plus another to cover two weeks of severance, even though it was unclear from the personnel manual whether this was required, since he felt he had fired her “for cause.” Also included was a letter confirming that Joan was no longer employed by the organization. Boris called the president of the board and told her what had happened. “I didn’t handle it well,” Boris conceded. “I hope Joan doesn’t complain to one of our funders or to the state.”
There was much concern on the part of the board. As much as they liked Boris, this had not been the first time there had been such difficulties, though it was by far the worst. The annual personnel evaluation just a few months earlier had addressed the issue, and Boris promised to improve. But concern mounted even further when a week later a group of employees approached the board president expressing their upset over the incident. “This is awkward,” they conceded. “We know we are not supposed to approach the board directly. But Boris is our supervisor, and he is the problem.” It was not necessarily that they did not agree with the decision, they said, but personnel procedures had not been followed. What good was a personnel manual if the executive director could ignore it, especially one like Boris who had a temper problem?
The board was fond of Boris. They admired his accomplishments. But he clearly had a problem. He was going to need help. After much discussion, they decided that putting Boris on probation was not the right move. They asked him whether he would agree to work with an executive coach who could help work through the problem. When Boris agreed, the staff was informed and told that they would be asked to help solve the problem by providing confidential opinions about Boris and about their working relationship with him to the coach. They were assured that their jobs would not be in jeopardy. They should be frank and the more honest they were, the sooner the problem would get fixed.
The executive coach conducted the interviews and subsequently worked with Boris to come up with a plan to address his weaknesses. The most significant step, readily agreed to by the board, was the creation of a new staff position, a managing director, to ease the pressure on Boris and to allow him to focus on what he did best. Though Boris himself would be doing the hiring of this new person, the coach would help him identify someone with the right set of skills.
Part of the process of working through the issues was getting Boris to acknowledge the consequences and potential consequences of his actions. He had upset his staff. He had wasted a great deal of board and staff time for what in the end he described as “my childishness.” More importantly, he had never thought about all the ramifications of his actions. Joan could have taken the organization to court and possibly won a judgment, or at the very least, cost the organization lots of money and time in legal fees. She could have bad-mouthed the organization to funders she knew. The fact that she didn’t wasn’t the point. Boris had put the organization at risk.
Later, a meeting was called at which senior staff reporting to Boris, key trustees, and Boris himself met to discuss the plan, with the coach serving as mediator. The result was that everyone felt that the problem had been addressed, relationships were strengthened, and the organization could get back to itscore business. Boris continued to meet with the coach for a few weeks thereafter as things continued to improve.
The Balance of Power
In this case study, I provide two case histories that illuminate the delicate balance between executive directors and boards. Neither can be effective without the other. The board has full legal authority and has the power to fire the executive director. The executive director’s power is more subtle but can be just as strong in its own way. What the two examples show is that you need the executive director and board working together or you can run into major problems.
– Dr. Thomas Wolf
Bertha started a tremendously successful youth-serving nonprofit organization in the northeast that was considered a national model. She was a pioneer. Her program was innovative. Her ideas were ahead of their time. Bertha was the first of her peers to receive funding from a new federal agency. She was in demand as a public speaker. She gave workshops across the nation. Her board, made up of many friends and associates, were her biggest boosters. “Whatever Bertha wants, Bertha gets,” they used to joke.
With time, the organization expanded. Its staff increased, as did the number of its direct service program people, most of whom were independent contractors with no benefits and low pay. Given the success of the venture, they complained about poor compensation, long working hours, and lack of respect from the top. Bertha was off being famous, they said, and did not pay attention to them. When she heard about their complaints, she shrugged them off. “If they don’t want to work for us,” she said, “there are plenty of others who do.”
Over time, the initial board moved on and newer, younger people took their places. Some Bertha knew and others she did not. She didn’t pay much attention. After all, the board had always deferred to her. But the carte blanche she had always enjoyed was beginning to dissipate. Some board members did not like her cavalier attitude.
Things came to a head when the independent contractors threatened a work action. Was it a coincidence that that happened to be the day the Internal Revenue Service made formal inquiries about their status as independent contractors (apparently one of the workers had lodged a complaint)? Several trustees, including two attorneys, grew very concerned. They asked Bertha to come to an emergency meeting to discuss the problem.
And that is when Bertha made her fatal mistake. She wrote a letter to the president of the board telling him that she was far too busy to come to such a meeting, and she would take care of the problem herself. The board should not meddle.
One week later, Bertha was out of a job. Her reaction to her firing was characteristic but displayed a great deal of ignorance. “You can’t fire me,” she said. “This is my organization.” But despite her protestations, she had no recourse. The board, exercising its legal and fiduciary oversight function, operated completely within its mandate. They indeed had ultimate control.
The fact that a board has ultimate legal power in a disagreement with an executive director is indisputable as is the fact that the board has the power to fire an executive director (within the constraints established by a contract or a personnel manual, if either exist). But the victory can be a pyrrhic one and of little value if a treasured and unique executive director decides to walk away, taking along the program, constituents, and even funders.
Stanley had established a similar type of organization to Bertha’s. Stanley was African-American, educated at elite schools, and had a sterling career ahead of him when he decided he wanted to work with young black kids who had not had the same opportunities he’d had. Working in partnership with a local church and using its nonprofit, tax-exempt status to raise money, Stanley’s after-school education enrichment program was an instant success. His kids saw their grades and test scores improve dramatically. Parents flocked to the program. So did funders. Press coverage was uniformly positive. Everyone seemed happy.
But the church that hosted the program began to see it as a tremendous opportunity to pursue its own agenda. The board had a vision for how the program could be expanded—which in turn would bring in more money, some of which could fund the operating needs of the church. The trustees spoke to Stanley about their plans and the fact that they were planning to bring in someone to help with the expansion. Stanley, not at his most diplomatic, was outraged and let people know it. So were his funders to whom he leaked the news. There was now a standoff, but the church’s board stood firm, and in time the situation became untenable. Stanley decided the only course was to leave and set up a new nonprofit. While he realized he would leave behind some unspent funds at the church and give up some donated administrative support, he felt the loss was worth it. He took all his students, families, and funders with him—every last one. The church was left with a program that it could no longer afford to run and a lot of embarrassment.
–© Thomas Wolf from Effective Leadership for Nonprofit Organizations: How Executive Directors and Boards Work Together, Allworth Press, 2013. Buy the book.
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