Goldilocks and the Three Boards

As fairy tales go, “Goldilocks and the Three Bears” is fairly benign. She’s not eaten by a wolf. She isn’t fed poisoned apples. The worst thing that happens to Goldilocks is that she wanders into a house where she doesn’t belong. She escapes without injury. And she apparently avoids charges of criminal trespass, despite the unauthorized taking of porridge.

Let’s imagine that instead of sneaking into the home of the Bear Family, Goldilocks had barged into an office complex housing multiple nonprofits. A bright if somewhat mischievous girl, Goldi would have discovered that not all nonprofit governing boards are the same. Indeed, some boards are too hard; some boards are too soft; and some boards are just right.

Some boards are too hard. These boards make life difficult for their CEOs. They meddle. They judge. They condescend. They get preoccupied with the little stuff, and they make bad decisions about the big stuff.

These boards are sometimes led by founders who simply can’t let go of the day-to-day management. Or they might be led by forceful businesspeople who inappropriately apply for-profit methods to nonprofit situations. Usually, these hard boards simply don’t understand their role. They don’t act like a governing board. Instead, they have the manner of intrusive venture capitalists suspiciously checking in on their investments, making clear all the while that they are in the dominant position.

Boards that are too hard second-guess the CEO – and then think nothing of sharing their dissent with the outside world. They don’t understand that disagreements in the board room should stay in the board room. They’re indiscreet. They cluck about how the poor, slow nonprofit executive “doesn’t quite get it.”

Boards that are too hard micromanage the staff, freely offering unsolicited opinions on operational details: which donor software systems to buy, say, or which person to hire.

Boards that are too hard judge the CEO without supporting him. Some board members might even describe a CEO who resists micromanagement as being insubordinate. (Here’s a rule of thumb: if a board member ever uses the term “insubordinate” when talking about the CEO, that person fundamentally misunderstands the relationship of the volunteer and staff leadership.) And sometimes these boards that are too hard either fire the CEO without legitimate reason or they make life so miserable that the CEO resigns. In most cases the board then finds that the position is very hard to fill – largely because no capable person with any sense would want to take over and deal with that kind of board.

Some boards are too soft. These boards give carte blanche to the CEO. They take the information the CEO provides at face value. They don’t try to get to know other staff members – sometimes because they’re lazy, or sometimes because they don’t want to undermine what they insist on calling the chain of command.

Members of a soft board don’t ask probing questions. They don’t press to be involved in strategic decision-making. They ignore public criticism of the organization and don’t try to see whether those complaints are based on legitimate concerns. They look the other way, even when there are clear warning signs: high staff turnover, persistent deficits, public relations disasters, red flags from the auditors, lawsuits.

These boards support their flawed CEOs come hell or high water. Their unspoken motto is: “Anything is better than an executive search! Avoid CEO turnover at all costs!” Good staff members leave, and the board blames their departures on personality differences: the fleeing staff members weren’t “a good fit.” The organization founders.

Then one day there’s an article in the newspaper about how the organization had suddenly and unexpectedly shut down. The report will quote the board chair, who describes how the problems arose suddenly and asserts that the closure couldn’t have been anticipated. Which is true, assuming board members had their eyes, ears, and minds closed tightly for the years leading up to that moment.

And some boards are just right. These boards know their role. The board members serve as ambassadors to the community. They focus on the strategic direction of the organization, not the day-to-day operations. They are generous donors, and they help the organization find new sources of money.

They support the CEO, but they are not blindly loyal. They take the annual review of the CEO seriously, getting genuine input from staff members and key community partners. They use the review to give the CEO  helpful feedback and to set goals for the next year. They’re partners with the CEO – neither overlords nor lapdogs.

A well-functioning board has a good sense of what’s going on in the organization. The board investigates at the first whiff of impropriety, but it doesn’t jump to conclusions. Board members take their fiduciary responsibility seriously. They do what they’re supposed to do – both protect the public’s interest and help the organization be successful. And good boards are notable for what they don’t do: they don’t try to run the place, and they don’t run it into the ground.

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What’s remarkable is how quickly a good board can become a bad board. If one or two key board members retire, one or two flawed board members arrive, and a poor leader (judgmental, arrogant, authoritarian) becomes chair – well, suddenly it’s a board that’s too hard. And if a few diligent board members give way to distracted or inexperienced replacements, and if the new board chair is weak, then suddenly it’s a board that’s too soft.

And, sadly, when these board transformations occur, it’s unlikely that the staff and the organization’s beneficiaries will live happily ever after. This is a story, alas, without a fairy tale ending.

Copyright Alan Cantor 2015. All rights reserved.