Should the CEO Have a Vote on the Board?

Board Café

Should the CEO Have a Vote on the Board?

The Electronic Newsletter Exclusively for Members of Nonprofit Boards of Directors

Short enough to read over a cup of coffee, Board Café offers a menu of ideas, information, opinion, news, and resources to help board members give and get the most out of board service. Co-published by the National Center for Nonprofit Boards and CompassPoint Nonprofit Services (formerly the Support Center for Nonprofit Management). Chef / Writer: Jan Masaoka. April 13, 2000. Vol. 4, No. 4. boardcafe@compasspoint.org, http://www.boardcafe.org .



 

In last month's issue we posed a question from "A Puzzled Executive Director" about how to encourage her organization's board to examine their own performance. Here's one reply from Tracy Salkowitz at the American Jewish Congress that we really liked: "Dear Puzzled: One tactic is to review the organization's goals for the next year and have the board discuss what is needed to help you accomplish those goals. One of the board members could then raise the issue of either board training or expanding the expertise of the board. One way to couch the suggestion is in terms of building for the next generation of board leadership. It is totally appropriate for you as the director, to suggest this."

Thanks, Tracy, and other Board Café readers . . . Read on for a couple of quotes to read out loud at your next board meeting and an "op ed" from our co-publisher on the topic of whether CEOs should be voting board members - Jan Masaoka



 

We wish to apologize to our subscribers who inadvertently received a blank copy of the March issue of Board Café. The problem has been corrected, and we thank those of you who brought the problem to our attention. If you ever get a blank copy of Board Café, lose an issue, or want to find a back issue, don't hesitate to visit Board Café on the Web at http://www.boardcafe.org and click on "Want to see some sample issues?"



 

TWO GREAT QUOTES ABOUT NONPROFIT BOARDS

Nobody outside a board can ever fully understand its complexities and its involvements with its executive and staff. Inherent in its very nature are several seeming contradictions; delicate balances must constantly be achieved if it is to succeed. Boards might seem unworkable, if it were not for the fact that they are at work everywhere.
-- Cyril Houle in Governing Boards: Their Nature and Nurture.

"Board members are part-time amateurs overseeing the work of full-time professionals, which, by definition, takes a certain amount of hubris."
--Richard Chait

CORRECTION ON ALLCHARITIES.COM

Last month's Board Café commented on the rush of "dot coms" approaching nonprofits for partnerships, and mistakenly included AllCharities.com as one of those that takes a "cut" from donations received. Although that's true of many donation websites, it's NOT true about AllCharities.com, which passes on 100% of donations to registered nonprofits. We're sorry for the mistake . . . you can see the site yourself at http://www.allcharities.com(Discontinued).

WONDERING ABOUT SILICON VALLEY CORPORATIONS?

More and more nonprofits outside of California are wondering how to get to Silicon Valley's high tech corporations for donations. One free way to do an initial search is the website Silicon Valley Funders at http://www.compasspoint.org/resources/svf. The website is searchable online, and a binder with the nearly 200 listings can be purchased for $25 (call 408-248-9505 to have an order form faxed to you).



Now for this month's "Main Course" at the Board Café:

More nonprofit boards seem to be giving board membership and a vote to the CEO/Executive Director: a recent NCNB/Stanford study shows that 17% of boards include the CEO as a voting member (up from 9% in 1997). Proponents say that both board membership and a vote give CEOs credibility and respect, in particular with for-profit corporations where such arrangements are the standard. They argue that board membership gives CEOs a way to take stands on board matters, and that without a vote CEOs are cast as "second class" board members. Opponents claim that having a vote may give the CEO too much power, and disrupts the accountability of the CEO to the board. In fact, most nonprofit CEOs are not even members of the board.

Betsy Rosenblatt of the National Center for Nonprofit Boards--and a board member of a Washington, D.C. community based organization--gives us her thoughts:

SHOULD THE CEO HAVE A VOTE ON THE BOARD?

by Betsy Rosenblatt

 

The tension that comes from the balance of power between the chief executive and the board is often necessary to keep a nonprofit on the right track. Properly defining the roles and responsibilities of each- and promoting accountability between the two-may be challenging, but it's necessary for a healthy nonprofit.

The board hires, fires, and evaluates the chief executive: in effect, the board as a group is the chief executive's supervisor. The board delegates its authority to the chief executive. For that individual to be voting on the board and influencing decisions about his or her role creates a conflict of interest. If the chief executive were able to sway board decisions by voting, the board's independent role in keeping the chief executive on his or her toes is at risk. The board also sets the chief executive's salary, so it clearly doesn't make sense for the CEO to vote on that decision. Yes, the chief executive could recuse himself or herself from that discussion, but for how many other decisions would recusing be appropriate?
As the top staffperson, the chief executive already wields a great deal of power. He or she likely knows better than anyone what goes on in the organization. The chief executive controls much of the flow of information to the board and, for the most part, controls the hiring and firing of staff. A CEO's fear that without a vote, the board holds all the influence and control, is unfounded. In a healthy board-CEO relationship, the CEO gives reports and makes recommendations. A vote shouldn't try to accomplish what a discussion could.

But what about the argument that board membership and a vote are needed for the CEO to be respected both on the board and with outside constituents? If a vote is necessary for a board to demonstrate its respect for its CEO then something else is wrong with the board-staff relationship-and THAT should be addressed. And although nonprofit corporations must be as efficient and organized as for-profit corporations, nonprofits have different stakeholders, different goals and missions, than for-profit businesses do. They must find ways to demonstrate their efficiency and effectiveness to corporations by ways other than imitating their board practices.

In the organization on whose board I serve, the chief executive relies on the thoughtfulness and perspective of the board to guide the organization. In turn, she carries the confidence and ability to make day-to-day decisions and carry out the mission of the organization. She does her job, and we on the board do ours. It works out.

Here's another related article from Board Café's archives: Should the Board Hold Executive Sessions? You can see this issue online here or call CompassPoint at 415-541-9000 to request a faxed copy.

 


 

You are reading the BOARD CAFÉ, published monthly by CompassPoint Nonprofit Services (formerly the Support Center for Nonprofit Management) and the National Center for Nonprofit Boards. CompassPoint: 706 Mission Street, 5th Floor, San Francisco, CA 94103; (phone) 415-541-9000; (fax) 415-541-7708; Silicon Valley office: 1922 The Alameda, San Jose, CA 95126; (phone) 408-248-9505; (fax) 408-248-9504; (e-mail) boardcafe@compasspoint.org , (website) http://www.compasspoint.org . National Center for Nonprofit Boards: 1828 L Street NW, Ste. 900 , Washington, D.C. 202-452-6262 email info@ncnb.org ; website http://www.ncnb.org We welcome your comments and contributions to the BOARD CAFÉ.

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