Nonprofit Board Crisis

Rules of Order #NonprofitBoards

I recently saw this statement in an article:

"Robert’s Rules of Order Newly Revised" is the go-to reference material for boards, but be careful, reading it has also been known to have sedative effects!

I concur about the "sedative effects" but want to offer that while Roberts Rules is identified as the "go-to" reference for, and yes, there is a "for", conducting business meetings and basically all things parliamentary, this is not the only guide nor necessarily the best guide for all those good nonprofit folks who just want to get through decision-making - which is essentially what parliamentary procedures support.

What else is there?  Well, two more come to mind.  The first is Roberta's Rules (yes, not a male-oriented way of thinking).  Back in February 2016 I offered a review of this tome and highly recommend this alternative to Roberta's Rules provide "informality, dialogue, and decision-making options".   You can acquire a copy of Roberta's Rules of course, where else, through Amazon.

And yes, there remains still another rule-of-order called Consensus.  Consensus decision-making is really designed for those who ultimately value that all voices around the table are "heard" and reflected in decisions.  Living with pure consensus process though does require patience for those who just want to get through the business as the bottom line: there is no decision until everyone agrees.  

But why does a board have to choose among these options?  They don't.  They can take what makes sense for their group and make their own rules-of-order.  Of course, they will need some rules-of-order to establish their rules of order. 

Exec Just Won't Say #NonprofitBoards

If your nonprofit exec went-off to have a meeting with another nonprofit to make some kind of deal and/or start a relationship AND isn't willing to reveal any of the content or outcomes of the meeting with you the Chair or other board members, what would be your response.  

Insubordination at minimum?  Now it's true, nonprofit execs likely have lots of meetings with lots of folks and likely do not share that they even have a meeting never mind the results.  But when the execs meet with folks everyone knows and everyone knows that relationships between the two organizations have been tepid at best......

I'm just saying...and I certainly know this will be a serious concern at the annual review.

Tainted Money #NonprofitBoards

Would your board accept money from "anyone"?  That's the question when remembering the adage: the only thing wrong with tainted money is there 'taint enough of it.

In Chicago the Chicago City Council Latino Caucus Foundation, a charitable arm of the Latino City Council Members, has accepted money from the for-profit prison organization (GEO) that houses undocumented immigrants waiting for hearings.  These were not big gifts so-to-speak.  One year the amount was $500 and another $1000.  

For some reason, following a "protest" by Council members over the Trump immigrant child-separation policy, the Chicago Tribune probed and found the gifts.  Reps of the Foundation have stated they will now give back the money, likely to another nonprofit that works with immigrants.

So, bottom line, the Foundation board accepted tainted money, got caught publicly and says it will give to some other group who frankly must equally decide if it will accept the money.  I believe that for the members, there is something wrong with tainted money-if someone else notices you took it.

No More Church/State Separation #NonprofitBoards

Calling all nonprofit boards: if you have been hiding under a barrel over the past x months (and there is certainly cause for such behavior) you may have missed that one of the core values that defines the US political system is the separation of church and state.  Theocratic states change the way you and I live our lives and make decisions.  A theocratic state defines what I must believe and while I recognize I am speaking about the loss of the Johnson Amendment in the extreme that doesn't make it less of a real threat so by speaking this way I am hoping to get your attention and action.

The Johnson Amendment helped protect this division but steps to remove this Amendment are getting closer and closer each day.  Please read the following about what is happening in this arena and don't stop there: tell your friends and neighbors and get them to call-on their legislators to not let this happen.  

From the Nonprofit Times

House Provision Permitting Political Churches Moves Forward

July 17, 2018       Andy Segedin      

Attempts by a pair members of Congress to remove language permitting political activity by churches in the House of Representatives’ “mini-bus” appropriations bill will not be considered further as of Monday evening. The bill is now likely to proceed on this week with language prohibiting the Internal Revenue Service (IRS) from denying tax exemptions due to political activity.

Reps John Lewis (D-Ga.) and Debbie Wasserman Schultz (D-Fla.) have both proposed amendments to the mini-bus that would have preserved the Johnson Amendment. Named after then-Sen. Lyndon B. Johnson, the Johnson Amendment has prohibited 501(c)(3) organizations from engaging in partisan politics since 1954. The House Committee on Rules decided Monday not to consider the amendments and the amendments are now further blocked from floor debate, according to David Thompson, vice president of public policy for the National Council of Nonprofits.

Requests for comment from Lewis and Wasserman Schultz were not returned prior to publication.

The provision in question, Sect. 112 of the mini-bus, prohibits the IRS from using funds to deny churches, integrated auxiliaries of churches, or associations or conventions of churches exempt status under Sect. 501(a) due to participation or intervention in political campaigns. An exception is carved out for when the IRS commissioner determines that an exemption should be denied and notifies the House Ways and Means Committee and Senate Committee on Finance within 30 days.

In such scenarios, a denial must not be effective sooner than 90 days of notification.

The exception’s timeframe would do little to prevent groups from popping up as churches shortly prior to an election, engaging in political activity, and walking away scot free, according to Thompson. This is because churches — a term that Thompson says applies to all houses of worship — are automatically exempt. They need not seek IRS approval.

“They can pop up. You can do your bad deeds and you can disappear,” Thompson said. “And people donating, most likely, will get a tax deduction.”

The National Council of Nonprofits, along with the Council on Foundations, Independent Sector, and National Human Services Assembly, issued a joint statement in opposition of the committee’s choice not to further consider the amendments late Monday. The statement highlights petitions and other opposition members of the religious and larger nonprofit communities have had to any sort of repeal of the Johnson Amendment.

“The Johnson Amendment serves as a critical firewall between political activity and nonprofit organizations,” Daniel J. Cardinali, president and CEO of Independent Sector, said in the release. “Gutting this firewall would tear nonprofits away from their missions, erode public trust in the sector, and help political donors dodge taxes at the expense of the federal treasury.”

Thompson expects for the mini-bus to go to the House of Representatives this week. The Senate has its own bill without a provision similar to Sect. 112. Assuming both bills pass their respective houses of Congress, it is expected that the Johnson Amendment will be an issue that is fought over during conference to combine the two bills.

Efforts are not being made to mobilize nonprofits at the moment. Congressional action has exhausted the sector and many leaders want to focus on mission. Mobilizing now, without the potential payoff of having Sect. 112 removed, would be akin to crying wolf, according to Thompson. Efforts will instead pick up prior to conference between members of the House and Senate, focusing on the sector’s opposition to a repeal or weakening of the Johnson Amendment.

“It’s important to remind Congress that most people don’t want this,” Thompson said.

Racist Board Chair resigns, finally! #NonprofitBoards

Unless you tuned-out everything but the World Cup (soccer), you likely know that the board chair of Papa Johns resigned in disgrace amid recognition by even his customers that it is not ok to at minimum, use racist language.  This of course was not Mr. Schnatter's first racist offense.  Not long ago he spoke relatively with lack of support about the NFL player's "bending the knee", not in support or  directly against but offering the position that the kneel did no harm to his organization.  The Papa Johns chair and founder, John Schnatter, had lots of pressure presumably by other board members and certainly by the media.  

Mr. Schnatter, in his apology for his statements claims he is not racist.  Maybe but were that the case, he might have at least understood how language matters.  Whether he is or is not, the need to resign to presumably correct a bad media situation and reduce the fall-out on his company is real.  But a bigger question for all, particularly in the nonprofit sector: how might a board screen what may have previous indicators of prejudice but was never checked and addressed?  And aren't there many other forms of racism and prejudice, that exist that are more actions rather than words?  Is a nonprofit board that excuses itself for lack of diversity really just unskilled in recruitment?  Is a nonprofit board whose staff is not very skilled at serving but one ethnicity or race when mission calls for it to do so, really just unskilled in marketing and service delivery?  And what is a board/staff that claims that those who are without personal monetary resources can't make a contribution to the organization?

Perhaps it's time to revisit the whole question well beyond diversity.

Nonprofit Founders Can Have a Place After #NonprofitFounders

There is plenty of offered "wisdom" about what to do with a founder when it is time for them to go, much of it basically with the theme of "go and don't look back".  But a Bridgespan study that included the review of 2000 tax returns, a 500 response survey and interviews at 31 nonprofits suggests this wisdom may not be the "best" wisdom.  In fact, based on this study, founders may still have a place and value but not without thoughtful planning, attention to relationships and clearness about what should come next by whom.  Take a look and think twice about "what next" for your nonprofit's founder.  Below is a write-up of the study by the Chronicle of Philanthropy.

 

CEO Transition

By Jari Tuomala and Donald Yeh

The conventional wisdom in the nonprofit world is that when nonprofit founders step down, they should walk out the door and no longer be actively engaged.

"Founders and successors are oil and water," goes the rationale. "They just don’t mix."

But a recent Bridgespan study found instead that under the right conditions, transitions that extend a founder’s role are surprisingly common and can yield the best results. In fact, nearly half of all founders who step down continue to bring their knowledge, relationships, and passion to bear for the organizations they started. And the least likely to succeed? Cases where the board ousts a founder.

We based our study on analysis of informational tax returns of 2,000 organizations (which included 106 founder transitions), survey responses of more than 500 nonprofit leaders and board members, and interviews with founders, successors, and board chairs at 31 organizations. Here are some key findings:

More nonprofit boards work out a continuing role for founders (45 percent) than pursue an amicable clean break (31 percent). Moreover, among organizations where founders stayed, most reported that founders made positive contributions, and 75 percent thought the benefits of a continuing founder role justified the complexity. Significantly, nearly half the organizations where the founder did not stay said the transition would have gone better had the founder played a role.

Transitions pairing a founder with a successor selected from within the organization proved to be the most successful of all transition approaches. This was measured on revenue growth through the transition, retention of the successor, and self-reported performance.

Transitions require preparation. The board needs to help the founder define her role in support of the successor and the mission. It also must shepherd the process. Founders can deliver much value, especially in fundraising, advocacy, and mentoring the successor. Other benefits: Staff loyalty remains high; the new leader gains from the founder’s unique knowledge, and, most importantly, beneficiaries keep being served.

This tactic, however, works only when the founder has the capability and desire to stay engaged and the board perceives clear value from the founder staying involved. It’s also critical that the successor wants to work with the founder and that the founder is willing to play a different role and to help the successor thrive. Also essential: Both founder and successor must sublimate their egos.

Replacing the 'Pioneer'

Consider Communities in Schools founder Bill Milliken, a visionary who pioneered the organization’s approach to coordinating social services at schools to identify and support students in danger of dropping out. After almost 25 years, the organization’s severe growing pains convinced the board and Milliken that the nonprofit needed a "settler" to follow their "pioneer."

Because Milliken remained committed to the mission and to fundraising for it, the board persuaded him (with some outside counseling and a couple of false starts) to move to a board role and stay involved in fundraising and advocacy. Doing so cleared the way for his executive vice president of field operations, Dan Cardinali, to take the reins, restructure the organization, and refresh its strategy.

It worked, Milliken said, because "Dan could keep his ego [in check] and help me keep [mine] from getting out of place." He added that their talents complemented each other: With Milliken anchoring the heart and soul of the movement, Cardinali became the data-driven mind that created a winning strategy in a crowded youth-development market.

"By partnering with Bill and leveraging his moral authority to validate the organizational change strategy, we had an amazing opportunity to drive change," says Cardinali, who is now the head of Independent Sector.

Indeed, a board will want to assess the founder’s and successor’s ability to work together. With internal successors, the relationship is typically well established.

Succession: What Works

Nonprofits that have dealt with transitions mentioned a set of common practices to manage leadership transitions: Invest early in developing internal successors, establish frequent interaction between the successor and board chair, and encourage active participation by the board.

Those practices are important, but our research uncovered other important recommendations for situations where the founder has a role after the transition. Although our data shows that transitions with an internal successor and a role for the founder tend to be the most successful, the practices apply to any organization that seeks to extend the founder’s stay.

Among them:

Limit the founder’s new role to specific areas of high interest and capability. Some organizations define well-focused assignments with timetables and clear deliverables, such as starting a new program. Others tap the founder’s capabilities, such as fundraising or serving as an ambassador to affiliates.

Engage the founder and successor in regular coaching to help navigate the operational and emotional aspects of transition. The journey from founder to a redefined supporting role can be fraught with tricky decisions and separation anxiety. Research has shown that a coach can increase the chances for transition success.

Anticipate conflict and agree to a process to mitigate it. Leadership transitions are inherently complex, even more so when a nonprofit’s founder stays on. As part of transition planning, the board chair need to work with the founder and successor to establish a conflict-resolution process.

Spread out the transition process. Founders often develop intense loyalty among staff and board members, many of whom are personal friends. What’s more, financial supporters often identify more closely with the founder than with the organization. It’s critical to shepherd these loyalties to new leadership. With an extended transition, organizations have the benefit of spreading out transitions over time.

Staff and board interaction are usually the first transition step; next, transitions with foundations and other big donors as the founder introduces the successor to key supporters, a step that adds credibility to the incoming leader.

Create initial separation to allow the successor to settle in. A successor needs time to establish herself, a period that may include staff restructuring or strategy changes. Although the successor may consult with the founder, it is important for the founder to maintain a low profile during the early months of transition to avoid confusion about who is in charge.

All these recommendations underscore the underlying principle that the board must take an active role in succession planning. Some of this work can be anticipated. Founder transitions peak at two points: the 10-year mark and after 25 years.

But even before hitting these milestones, boards should talk annually about CEO-succession planning. Such routine discussions among the entire executive team render the probing less personal and fraught, while continually focusing the board on the organization’s leadership needs.

Jari Tuomala is a partner in the Bridgespan Group’s New York office, where Donald Yeh is a manager.

Nonprofit Board Recruitment #NonprofitBoards

The following article from Better Boards (an Australian nonprofit board capacity building organization) offers some interesting thoughts about recruitment, orientation and supporting new members of the board.  I can't say I agree with all that is offered but I do agree with some.  With that said, I have inserted my own thoughts, for your consideration, into the article.

 

The Role of Newbies in the Boardroom

WRITTEN BY HENRI ELIOT - JULY 6, 2018 

Not-for-profit organisations are increasingly looking for a younger presence in the boardroom for the digital skill sets and perspective they can bring to emerging areas of board oversight, including strategy, digital marketing and online fundraising.

Certainly, but this is not the only desired skill sets.

Changing a board’s demographics and traditions comes with risks as less experienced directors often require more training and resources early in their tenure to better understand and fill their roles. Often boards pair new members with experienced directors who serve as coaches during the transition.

I wonder that this lens is an inverse of the lens that is at the core of diversifying a board.  Diversifying a board is best viewed as the opportunity to open-up the eyes of those who have sat so long with fewer insights about what are and how best to address the needs of those who mission calls the organization to serve.  Diversifying offers opportunity to reconsider the Theory of Change and reach new levels of success.  

Getting that first appointment is hard as many boards still are reluctant to appoint executives who don’t have a track record. It can take a few years to land your first board appointment. Often strong recommendations from experienced directors helps. As the average age of directors is around 58-60 years old, turnover remains low. If your board wants a fresh perspective and be challenged then appointing a newbie to the board may be the answer.

I honestly don't think I understand what is being said with this point.  Also, I find execs at the 2nd or 3rd tiers of the corporate ladder equally competent and much more available and reliable as board members as they come with fewer competing demands and are more able to "give it their all".  And regarding low turnover - not a choice - this is what term limits are all about and must be adopted and enforced.  There are still plenty of tasks for departed board members.

Over the next 5 years, board dynamics will change as we will see increasingly diverse boards which, in some cases, may lead to more challenge and debate around the board table. It will be important for board members to be open to this challenge and to work as a team to look for the best outcome for the organisation. Boards will need to work harder to avoid becoming compliance focused, looking for ways to manage compliance whilst ensuring equal or greater attention on the other aspects of their role to ensure they continue to add value to the organisation.

More challenge and debate is exactly what makes for a dynamic board.  And maybe it's true for Australia but compliance is central to the duty of care but only one part of the job that matters equally to the remaining duties.

Market dynamics will also change moving forward, which will require boards to correspondingly change. It is fair to assume that technology innovation will continue to increase the pace of globalisation which provides exciting opportunities for companies to more readily access much bigger markets. However, boards will need to regularly review their composition to ensure that they have the international expertise and understanding of the risks associated with globalisation and increased competition if they are to succeed.

Again, maybe more of an Australian reality particularly given what is going on at the US federal government level.

Some of the most important skills that a director can have are an enquiring mind, the courage to question and an ability to analyse information quickly to identify possible issues. These are the skills that we need to be encouraging in workplaces and educational institutions if we are to give future directors the best grounding for the role. I suspect that we will also need to encourage future directors not to be scared off by the sense of increasing liability around the role of a director.

Ok.

It will continue to be an individual’s own personal network that will heavily influence the professional opportunities that come their way. For example, executives who aspire to directorships, need to not only be able to demonstrate successful growth and enhanced productivity in their executive role but they also need to work hard to build and nurture their professional network so that they will be recommended for a board position.

Hm - if networking is the primary way for individuals to become nonprofit board members, I'm not sure I see a board's effort at diversifying its membership having that much success. A nonprofit board must be very intentional at reaching-out into places where the traditional sources in the past (e.g. networking) have not resulted in a diverse board to date.

The idea of diversity of skill-set in the boardroom is pretty much unchallenged now. However, there has definitely been a lot of focus recently on other aspects of diversity – particularly in relation to gender. I think there’s been some good progress as a result of this diversity focus but there is still a way to go and there remain many who resist it. It is important that we don’t see representation by particular groups as an end in itself – the aim is to ensure a diversity of perspectives on issues that come before the board. It’s also important that merit and skill remain foremost in any appointment decision to avoid any charge of tokenism.

Absolutely correct - tokenism is not the goal of diversity and while gender may not currently be the primary area where nonprofit board's lack diversity (although this really depends on the sub-sector of focus), gender should not be excluded as a goal along with ethnicity and race.  And, regarding skill-set, I don't believe this to be a central criteria - volunteers with specific skill sets can be recruited for board positions but are equally if not more valuable as simply volunteers.

The Next Generation are also becoming an increasingly vocal group especially the millenials coupled with being a growing consumer group. This perspective may be appropriate for many boards. Some view it as “critical for both strategic development and risk management to open up our board conversations to their perspectives” according to Holly Ransom, CEO of Emergent. She adds that “we’re not talking about handing the reins entirely to millennials (that would undo the whole diversity benefit), but about how the robustness of decision making can be enriched by their education.”

Absolutely although if there is a groundswell of mellennials eager to "take over" I actually don't see the undoing of the diversity benefit as it is referred to here.  A diverse and generational ownership of a nonprofit is an excellent diversity goal.

Finally, the appointment of a newbie to a board is about change, and embracing change is an obvious way of training the next generation of directors. Now over to a progressive Chair to help lead the way to be open to new value add and fresh perspectives around the boardroom.

I concur, where the Chair is committed, so too will be the board.  

Nonprofit Board Culture Matters #NonprofitBoards

The following BizJournals article by Deloitte that provides what I believe to be some helpful insights and considerations about board culture.  First insight: a definition of culture and why I think it matters.  The article proposes that culture is: "a system of values, beliefs, and behaviors that shape how work gets done within an organization."  Unless you have been living in a bomb shelter (which actually has many appealing benefits) there is a great amount of conversation going on about nonprofit board diversity with the summary being that there isn't much but it matters a lot.  I pose that one of the core elements to making and maintaining a diverse board has to do with culture and hence, why I found the following article helpful.   

 

Having a boardroom playbook avoids culture disconnect

Jun 5, 2018

Since boards are not living a company’s culture day-to-day, it can be challenging to get a real sense of it in action.

Westend61

By Carey Oven, Deloitte & Touche LLP and Maureen Bujno, Deloitte LLP

A prevailing position is that a positive culture can be a corporate asset and competitive advantage. Permeating all business functions, it can adhere leaders and employees alike to a set of values that distinguish organizations from competitors.

From business model shifts, to evolving talent and consumer demands, to a tightening labor market, the need for a strong, positive company culture is more important than ever before.

To tackle this complex topic, Deloitte explored managing Culture risk: A new imperative for board governance, laying out a roadmap for the board’s role in defining, monitoring, and instilling a productive organizational culture.  

Knowing what you’re looking for: Defining culture risk

At a fundamental level, culture is a system of values, beliefs, and behaviors that shape how work gets done within an organization. While it is shaped by leaders’ actions and decisions, it is sustained by employee behaviors or conduct.

Culture risk, on the other hand, is the potential misalignment between an organization’s espoused values and leaders’ actions and employee behaviors. Mitigating such risk should be a top priority, given the potential implications it has on the effectiveness of employee and business productivity.

Eighty-two percent of respondents to a 2016 Deloitte Human Capital survey said that "culture is a potential competitive advantage,” but only 12 percent of companies surveyed believed their organizations were driving the "right culture."

The pivotal role of the boardroom

While driving meaningful culture is incumbent on corporate management, boards can bring an important perspective to the culture dialogue from an external perspective. Boards should oversee management’s approach to culture and strategy, taking into account customer and vendor viewpoints and other outside stakeholder perceptions and understanding where culture falls on the risk map.

To enhance the board’s role in monitoring organizational culture internally, boards should consider tone at the top, mood in the middle and buzz at the bottom. This can prove to be difficult as a clear disconnect may arise the deeper into the organization you get.

Since they are not living a company’s culture day-to-day, it can be challenging to get a real sense of it in action. This detachment can make mitigating risk at all levels challenging. For instance, according to the 2017-2018 NACD Public Company Governance Survey, 87 percent of directors say they have a good sense of the tone at the top of the organization; 35 percent had a good sense of the mood at the middle but only 18 percent noted a high understanding of the buzz at the bottom.  

What’s more, it is not clear who is responsible for managing culture risk activities within the organizations. On a recent online Deloitte poll, 28 percent of respondents stated they don’t know/not applicable, 25 percent stated it’s the chief human resources officer’s responsibility, while 18 percent noted “other.”

To support board connectivity to organizational culture, boards should have meetings at different company locations, as applicable, and get a sense of culture, should ask for and seek to understand cultural survey results around trust in leadership and employee engagement, and should consider how executives take on lead roles to drive positive culture.

Furthermore, standing board committees play an important role. The audit committee should understand the effectiveness of the ethics and compliance programs, messaging, and the related hotline – does it allow for issues to be raised? The compensation committee can enhance their understanding for the overall compensation philosophy and whether incentive compensation plans are driving behavior that could be indicative of risks in the culture. Also, the nominating/ governance committees should align governance practices with the board culture. 

Preparing with process 

Board diligence, presence, and observation can provide further insight to inform oversight responsibilities:

Be strategic: Integrate culture into strategy, performance, and risk oversight and risk oversight processes.

Be proactive: Don’t wait for a cultural risk issue to surface.

Be persistent: Confirm culture risk issues don’t slip through the cracks.

Preparation is a cornerstone of success, and there should be a management framework in place when dealing with culture risk. Approximately 30 percent of respondents, from the same online Deloitte poll as noted above, say their cultural monitoring is somewhat proactive, but that they operate in siloes — meaning that each stakeholder owns it in their respective lens and processes are not necessarily coordinated.

Periodically assessing the culture and regularly evaluating the organization — among both internal and external stakeholders — can help drive toward the shared values laid out by management. Effective ways to gauge engagement, behaviors, and signals range from conducting internal diagnostic surveys to listening to market analysts to understanding the conversation in both traditional and social media.

Boards should assess employee engagement, enabled by technology, to proactively identify risk indicators and course correct.

With such a broad cross section of generations in today’s workforce, it’s more imperative than ever for board members to see that company culture is at the top of its agenda. The boardroom should be aligned with how they define culture and be working with management to use culture and manage culture risk as a key brand and reputational differentiator in the competitive marketplace.

Learn more about Deloitte’s Culture risk: A new imperative for board governance webcast.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

Copyright © 2018 Deloitte Development LLC. All rights reserved.

Carey Oven, partner, risk and financial advisory, Deloitte & Touche LLP. Maureen Bujno, managing director, center for corporate governance, Deloitte LLP.

For-Profit's Chair to Head For-Profit's Nonprofit Board #NonprofitBoards

What's the difference between a nonprofit board and a for-profit board when the board chair is the same?  Frankly, I don't know but this will be the case for Grand Canyon University (according to the Cronkite News article) the largest university in the US (91,000 students).  And this is just one of the many questions I have about what is happening over at the University.

The University experienced some major financial challenges back in 2004. It stopped being a nonprofit, became publicly traded and brought-in enough cash to do a huge expansion and make the place whole again.  The University has now created a nonprofit again and has transferred many of the assets it accrued while a for-profit, has gotten its accreditation and is basically going to do business as a nonprofit that will also seek grants and the other funds needed for sustainability.  One of the questions of course: if being publicly traded was a business model that worked, why change?  But change is a reality so now the President of the for-profit has announced that:

Mueller will retain his position as university president, and he will continue as CEO and board chairman of Grand Canyon Education. Mueller stressed that holding both positions aligns with Higher Learning Commission guidelines. He emphasized that GCU and GCE will maintain independent governing boards, and that no one else will serve dual roles across both boards.

“The academic mission of the institution will always be run by the university,” Mueller said.

I "get" the idea but I don't "buy" the argument.  Yes, Mueller has proven a saavy businessman but are the same skills pertinent to a nonprofit university?  And how will the boards be different and more importantly, what will the for-profit be doing?  

This set of transactions particularly around governance just feels a little to squishy to me.

Unplanned Leadership Transitions #NonprofitBoards

The NY Times has an intriguing story to tell about Lincoln Center: high turnover in its paid leadership, discontent among the next level of leaders and an institution in flux.

Intriguing yes but in my opinion, only half the story.  The other half of the story I believe should focus on the volunteer leadership and its role in the paid leadership challenges not to mention some of the strategic directional realities not being successfully addressed.  

Nonprofit success is not a one-way paid leadership street.  I will admit that there can be those paid leaders who act as though they are the owners and boards (volunteer leaders) who give permission for these paid leaders to act accordingly.  This "permission" however does not change the facts about who is responsible.  From my perspective, when the institution goes "south" the board must own this reality.  

Chapter 2 of the Lincoln Center saga should focus on where is the board.