Learnings from Interim Leadership in the Not-for-Profit/Charitable Sectors
Over the years I have been called into a number of organizations who have lost their leaders. Sometimes it’s a resignation, most often it’s a dismissal. It’s unsettling for the staff and usually results in surprise and uneasiness for stakeholders, industry partners, and funders. While the circumstances surrounding each CEO, ED, GM’s departure differ, there are root causes to the discord that are quite similar in nature.
Generally speaking, Boards, conscious of the historical accusation of being too involved, back off to a greater extent than they should. Often when I report to them on the state of the organization, they fall off their chairs. My standard response to the executive committee, when Osborne and I are retained, is “I’m afraid you probably don’t know the half of it.” How does it get to this point? Glad you asked.
It can start with the hiring process. I have seen too much emphasis placed on industry experience versus leadership and the right “soft skills”. A good recruiter will screen with those in mind, but it’s important that the hiring lead and the hiring committee are aligned on what they’re looking for. When it comes time to offer a contract, ensure that executive limitations are in place that would prevent a major decision being made by the Executive Director unilaterally. Examples would include significant unbudgeted bonuses or raises, long term binding third party agreements, termination of a long-term employee, a significant change in the organization’s policies and procedures, and taking a public position on an issue that contradicts the values of the organization.
Communication, or lack thereof, is often a governor of the relationship between leadership and the Board. Quarterly board meeting reports are regarded as the staple. However, if the relationship is right and (board) committee terms of reference are in place (and well understood), then a bi-weekly written report by the ED is especially useful for both parties and, I can tell you from experience, much appreciated!
The ED is the one employee the Board has and as such should be subject to performance reviews just like all staff. The difference is that it should be a 360 review with feedback from staff, key stakeholders, and board members. These take time to do well. Hence my suggestion is to conduct them at the end of the first year and then every second year thereafter (with a shorter executive committee review on alternating years).
Another word of caution, the ED reports to the Board not just the Chair. I have seen relationships develop where the Chair keeps things to themselves to protect the ED. In fact, in one case, I was the one who broke some unwelcome news to the Board, and it cost the Chair their job. That’s the beauty of being the interim leader, your decision-making filter is quite simple – do what’s right for the members/clients even if it upsets some folks.
I would suggest two other safeguards in the structure of the organization. The senior finance officer should have dotted line reporting to the finance and audit committee of the Board and the HR advisor to the governance committee. This ensures the ED and those relevant Board members are getting critical, unfiltered information concurrently to facilitate more prompt discussion and better decision making. Remember, these are the two areas that deal with the greatest risks to the organization.
Right about now there are some darn fine EDs/CEOs of not-for-profits and charities upset because they think I’m implying they can’t be trusted. Not at all, in fact with clarity around who owns what in terms of responsibilities, and increased transparency I genuinely believe you will feel more supported and recognized for the excellent work you’re doing. Of course, sometimes good EDs move on to new challenges and all you can do is wish them well. That then affords the Board the opportunity to re-examine its governance and reset as necessary ahead of the next hire.
No scenario is perfect, but the better the hiring, due diligence, Board communications and reporting structures are, the better the accountability and decision making will be in the organization
Mark Olson
Managing Partner
Mark, great advice. I agree that having a strong supporting structure and process is NOT a sign of distrust, but rather can be what builds a strong trusting relationship. Managers are informed and can better perform their responsibilities, and external stakeholders will have greater confidence in the organization due to them having good governance. The best business relationship is often when a trusting handshake is supplemented by a thorough, well-understood contract. Nothing is left to bad assumptions then.