Every five years the Meyer Foundation and CompassPoint sponsor a study of nonprofit executive leadership called “Daring to Lead.” Focused on job satisfaction, executive transitions, financial sustainability, and board relations, the 2011 results can be found here. As a nonprofit chief executive myself, I pored over the report with great eagerness. I’m human; I like to see how my personal experiences compare with those of my peers.
Sorry…I’m going to keep those observations to myself.
What I’d like to address today is how ubiquitous the board was throughout the report—how executives’ experiences, and their decisions whether to stay in their position or leave, often rose and fell with the relative efficacy of their board. I have written before in this space on the critical necessity of having a succession plan in place; sadly, the report tells us that only 17 percent of organizations have documented one. And only a third of the executives thought their boards would choose the right successor upon their departure. Boards must do a much better job in the succession arena: committing to making a plan, then determining the qualities they should seek to drive their organizations forward. As the report reminds us, transitions can be an opportunity.
The report teased out for board-executive relationships what most of us experience in our romantic lives – a honeymoon phase, wherein the first year was “very happy” for 52 percent of the executives, but that level had dropped to 37 percent in years one through three. Tracking an almost identical curve, 20 percent were “very satisfied” with the board in the first year, headed down to 13 percent in the next three years. After that time, both curves headed upward. The report surmises: “many boards see executive transition as ending with the hire, when in fact leaders—nearly all of whom are in the role for the first time—need intentional support and development as they build efficacy in the executive role.”
How many of us, as board members, have breathed a deep sigh of relief once we’ve signed the contract with our new CEO, believing our work is done for the moment? As one of those CEOs, I can say: it’s only the beginning. While CEOs need some time alone to figure things out, the steep learning curve they must climb in those early years will be greatly ameliorated by the systematic and empathic support of the board.
It’s no surprise that the financial crisis colored executives’ experiences throughout the report, finding that 65 percent suffer “recession anxiety.” The CEOs of organizations that had more reserves, not surprisingly, fared better than those that did not. But overall, boards could do more to help—less than half participated in fundraising activities and almost half of boards have not achieved 100 percent giving. Similar to the finding on our BoardSource Nonprofit Governance Index 2010, where executives gave their boards a C + on their performance, only 20 percent of executives in this study were “very satisfied” with their boards.
“Daring to Lead 2011” finished with four overall Calls to Action: 1) Plan for successful transitions; 2) Advance understanding of nonprofit financial sustainability; 3) Expand and diversify the professional development options available to executive directors; and 4) Find new ways to improve the performance and enhance the composition of boards. While number 4 focuses exclusively on the board, the way I read it, all of them fall under the broad purview of the board’s responsibilities.
Chief executive transitions are inevitable; some are sudden, some are planned. Some are unfortunate and some present enormous opportunities for organizational growth. How they are planned for and executed, and how the new chief executive is oriented, coached, and supported going forward, are all within the board’s portfolio. While “Daring to lead” referred to chief executives, it is boards of directors who must also dare to lead by going beyond hiring to helping those executives learn and grow, so that all—board and staff—are working together to further their shared goals.
You’ll be able to learn much more about this study at our BoardSource Leadership Forum in Atlanta on September 22-23, when Rick Moyers, one of the report’s authors, will present these and other important findings.