Board Cafe • By Jan Masaoka • November 13, 2011 • Email Print

In the last issue of Blue Avocado, we discussed how board evaluations of executive directors (CEOs) are different from all other performance evaluations in the organization. These differences -- including the limited ability of board members to observe the executive -- are also among the reasons why 45% of executives have not had a review in the last year (CompassPoint's Daring to Lead 2011 study). In this article we draw on that discussion and on the submissions of dozens of Blue Avocado readers to propose a process and an evaluation instrument.

(At the end of this article is a link to download the survey form in Word to make it easy for you to modify.)

When we reviewed various the dozens of evaluation instruments sent in by Blue Avocado readers, we found that nearly all of them had these attributes in common:

• Most reviews used a checklist form (rather than narrative)
• Most focused on ED's actions and behaviors (rather than on organizational performance)
• Most relied on input from board members only (rather than include input from others such as staff, funders, clients, art critics, etc.)

Although we feel that evaluations that are narrative, focus on organizational performance and contain elements of a 360 degree evaluation are better ways to evaluate executives, we also realize:

• Without a checklist of some kind, the ED evaluation most likely won't take place . . .

Board Cafe • By Jan Masaoka • October 17, 2011 • Email Print

Are you sighing just from having read the title of this article? Why does this topic make us all feel so tired?

Virtually everyone agrees that boards should conduct performance reviews of executive directors (EDs or CEOs). Even so, the predominant practice is neglect, and the predominant feeling is resentment. The neglect comes from the board: only 45% of nonprofit CEOs have reviews, reported CompassPoint's recent Daring to Lead 2011 study. Resentment comes from the executives, who are too often either resentful of the review process or even more likely and paradoxically, disgusted with the board for not conducting one.

And the agreement that ED evaluations should happen forestalls us from reflecting on why. In fact, in contrast to most performance appraisals, the key goal of ED evaluations is not performance improvement, but instead:  a) the chance to reflect on the performance of the entire organization (not just the individual), and b) to spark a calibration of expectations and goals between the ED and the board.

Board evaluations of ED performance are radically different from any other type of performance review and must be thought of differently. For example:

• While most staff reviews are between two individuals, the ED evaluation is a collective, committee review of an individual.
• An ED review appropriately is more about the organization's achievements rather than about the individual's completion of a series of tasks.
• Board members seldom (if ever) see the ED other than at board or committee meetings and are typically highly unfamiliar with either the building blocks or the nuances of the internal and external leadership roles that EDs play . . .

Board Cafe • By Jan Masaoka • September 19, 2011 • Email Print

Much of the confusion about board responsibilities is confusion between what the board does (as a body) and what individual board members should do. Most of the prescriptions for boards confuse the two, saying "The board should _____" without making the distinction. This straightforward model for boards has been embraced by thousands of boards across the United States:

There are two fundamentally different types of nonprofit board responsibility: governance and support. Depending on the responsibility, three types of switches occur:

• Who's the boss
• Whether the board is acting as a body or as individual board members
• Who the board is representing

Let's look at both types of responsibility, and the three types of switches.

The governing role

On one hand, the board, acting as the representative of the public interest, governs the organization. In this role the board has several key responsibilities, including financial oversight, hiring/evaluating the executive director, and making the Big . . .

Board Cafe • Finance & Strategy • By Dennis Walsh, CPA • August 29, 2011 • Email Print

Audits are expensive in terms of money, staff time, and board attention. CPA Dennis Walsh tells us how to wring the most value from them:

An IRS tax audit has been described as an autopsy without the benefit of death. The financial statement audit -- done by an independent CPA, not the IRS -- can be seen by nonprofits as only slightly more appealing.

Many nonprofits have annual CPA audits, but the executive director and/or the board's finance or audit committee may be unsure whether they are getting the most out of the audit. A worthwhile question for the board to ask might be: "Are we getting the most out of this significant investment of money and time?"

We have developed two questionnaires to help you answer this question. The first looks at whether your auditor is doing a good job for you. The second questionnaire looks at whether your nonprofit is doing its part in utilizing the audit. (The questionnaires can also be downloaded as a Word document; see link at end of article.)

But first, . . .

Board Cafe • By Jan Masaoka • July 19, 2011 • Email Print

Not all nonprofit organizations need or have paid staff. But in those that do, a frequently thorny issue is that of direct contact between staff and board members:

Should board members have contact with staff independent of the executive director? For many executive directors, this issue raises blood pressure faster than almost any other (the other one is the board in executive session without them).

Opinion is sharply divided about whether and how other staff should interact with board members. Executive directors often feel that independent board-staff contact undermines their authority and creates the potential for staff to give misleading and undermining information to the board.

Board members want to respect the authority of their executive director, but they also know that . . .

Board Cafe • By Tim Wolfred and Jan Masaoka • July 16, 2011 • Email Print

Let's turn our attention away from the departure of long-time executives to the arrival of the next executive directors. Here are 12 easy and important ways for board members to help a new executive get started fast and on the right foot:

When a new executive is hired, a board usually works extra-hard for weeks or months. In addition to meetings about candidates to make the hire, board members often take on additional tasks, such as managing a fundraising event or overseeing the audit.

How the board and board members can support a good transition:

1. Ask a board member (perhaps the vice president) to be the ED Transition Adviser for six months. This person can check in with the new executive, touch base with board members on how they see things going, and make sure the board continues to pay attention to a successful transition.

2. Write and send out a press release either by email or hard copy. Send it to local and . . .

Board Cafe • By Jan Masaoka • June 19, 2011 • Email Print

It seems as if there's always somebody at the board meeting saying, "That's what nonprofit boards are supposed to do." Sometimes it's even the executive director. Here is a quick directory to the most common myths wreaking havoc in nonprofit boardrooms:

Myth #1: Nonprofits have to comply with Sarbanes-Oxley

In the wake of the Enron and other corporate scandals, this federal act of 2002 was designed to improve accuracy of disclosures by publicly held companies. Provisions include certification of financial reports by the CEO and CFO, having non-staff on the board's Audit Committee, prohibition of personal loans to executives, and so forth.

Reality: Only two SOX provisions apply to nonprofits:

Board Cafe • By Jan Masaoka • May 30, 2011 • Email Print

Very often the only time a board member is given the "microphone" at a board meeting is when he or she is making a committee report. But wait a minute! Why do we ask people onto boards because of their knowledge and perspectives, but never give them a chance to share their knowledge or perspectives with us?

Instead, at each board meeting schedule a 7x7 ("seven by seven") Board Briefing: a board member makes a 7 minute presentation, followed by 7 minutes of questions/answers/responses. Friendly-but-fierce timekeeping is required to keep to the 7 minutes each and the whole thing takes 15 minutes.

An example that will spark ideas for your organization is a list of 7x7 Board Briefings given at one AIDS organization, each by a board member:

• A marketing executive at a bank gave a presentation on marketing principles that the board and staff should know when planning awareness campaigns.
• A doctor told the moving story of working with his first AIDS patient.
• A pharmaceuticals manager used PowerPoint to present on trends in the drug industry and what impacts they might have on patients
• A client told about her experiences using the services of the organization, with both praise and problems
• A major donor (to this organization and to others) talked about how he and other wealthy individuals have similar -- and different -- preferences on how they like to be approached and recognized

Several problems get solved in one fell swoop with the 7 x 7 ("seven by seven") Board . . .

Board Cafe • By Jan Masaoka • May 16, 2011 • Email Print

Occasionally, a board member needs to be removed from the board. In some cases, a conflict of interest or unethical behavior may be grounds to remove an individual from the board. In other cases, the behavior of a board member may become so obstructive that the board is prevented from functioning effectively.

The best boards often have strongly felt disagreements and heated arguments. Challenging groupthink and arguing for an unpopular viewpoint are not grounds for getting rid of a board member. But if a board member consistently disrupts meetings or is otherwise destructive and  demoralizing, it may be appropriate to consider removing the individual from the board:

1. Personal intervention

One-to-one intervention by the board president or other board leadership is a less formal solution to managing problem board members. If a board member has failed to attend several meetings in a row, or has become an impediment to the board's work, the board president can meet informally with the board member in question. In person or on the telephone, the board president can request a resignation. Examples:

• "I respect your strong opinion that we have made the wrong decision about . . .