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Recent events at the Silicon Valley Community Foundation (SVCF) have rocked the philanthropic community and left many wondering why things went so terribly wrong. They have also shed light on the challenges that governing boards face as they work to understand the realities of a CEO’s leadership and the culture he or she fosters within the organization.
In the case of the SVCF, we have no inside knowledge about what the board did and did not know, what role it may have played in enabling dysfunction, or what signals it may have missed in its governing role. But, regardless of those specifics, this is a cautionary tale for other boards about what can go wrong, why it is important for boards to build systems and practices that create the space for staff feedback and reporting of wrongdoing, and how to take action as a board when there is a clear need to do so.
4 important questions for effective CEO oversight
We offer boards the following four questions for reflection:
1. Are we embracing – or avoiding – our role in protecting the safety and well-being of the staff?
As Anne wrote in a Nonprofit Quarterly article that pre-dated headlines about SVCF:
“When it comes to the board’s role in staff oversight, many like to point out that the board has exactly one employee: the chief executive. While true in many ways, this sentiment obscures the fact that the board has a very important role in providing leadership and oversight of the entire organization, including protecting one of its most important resources – its people.”
A board that thinks it has no role in protecting employees is confusing management – a staff-level role that is squarely within the CEO’s purview – with oversight, which is an essential board function. Boards play a crucial role in ensuring that the CEO is providing strong leadership to the organization and its staff and to ensuring that the CEO’s power doesn’t go unchecked if there are issues of abuse or mistreatment.
Indeed, when the CEO is condoning – or is at the center of – an organization’s harm of its employees, board-level action may be the only recourse. And that’s a responsibility boards must take seriously.
2. Do we have appropriate channels for staff to share feedback and report issues?
Establishing policies and practices to guide the board’s engagement with the staff helps ensure that the board is surfacing issues while respecting the distinct roles of the board and CEO. This includes:
Outside these formal channels, board members should avoid inviting, listening to or sharing feedback about the CEO’s leadership with employees. This can be difficult to observe in practice, especially if a staff member signals that he or she has a concern. Board members should not ignore these attempts but instead direct the employee to one of the formalized systems of feedback.
Additionally, the board member should alert the board chair to ensure that – if there are numerous signals of concern or complaints from staff – the board has the opportunity to observe the trend and address concerns proactively as a part of a formalized, board-endorsed process.
3. Do our evaluation systems ensure that we are reflecting on staff feedback about the CEO’s leadership?
Because the board has very little exposure to the CEO’s day-to-day leadership of the team, it is important that it invites staff feedback as a part of the CEO’s annual review rather than relying solely on its own impressions. Boards should consider some combination of the following:
Boards must be thoughtful about how these inputs are invited and interpreted. Three things to keep in mind are:
4. Are we observing things that could be signals of problematic leadership?
Subtle signals can sometimes be incredibly illuminating. For example:
It’s hard to get it right, but we must.
While it’s easy to blame a board when things go wrong, the signs of a potentially dysfunctional organizational culture (and the CEO’s role in it) are nuanced. Boards are wise to be cautious about making assumptions about what things do – or do not – mean. However, boards need to avoid ignoring or explaining away signals that could be indicators of real organizational distress and dysfunction, particularly when they could be the result of the CEO’s leadership and management and therefore can only be addressed by board intervention.
In the case of the Silicon Valley Community Foundation, it is unclear what, if anything, the board should have done differently. As outsiders, it is impossible for us to know what went on within that boardroom. And even when board governance and leadership are done “right,” things can still go wrong within an organization.
For all those reasons, the board’s role in CEO oversight is not a straightforward or easy role to play, but it is an absolutely critical one.
As social sector organizations – whether we are foundations or non-grantmaking nonprofits – the board’s role in CEO oversight is essential to our missions; to the people and communities we serve, and to the team members who rely on us to intervene when they are being harmed or are at risk. And, in our minds, those are very good reasons for boards to work hard to get it right.
Anne Wallestad is president & CEO of BoardSource. Aaron Dorfman is president & CEO of the National Committee for Responsive Philanthropy (NCRP). Follow @BoardSource and @NCRP on Twitter.
*BoardSource’s most recent Leading with Intent study found that 40 percent of CEOs were not being evaluated on an annual basis. A full 15 percent of CEO’s reported that they had never received a formalized evaluation from the board. Visit https://leadingwithintent.org/.
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