At their best, boards—led by the chair—will support the CEO and the leadership team in carrying out their responsibilities, while also ensuring a degree of scrutiny of those matters that properly fall within the board’s purview (strategy, resources, and governance). A high-functioning board is a huge advantage for any nonprofit, and key to ensuring the organization is well positioned to have maximum impact. Given this importance, CEOs should lean into their power to influence the appointment of board members, identifying and proposing suitably qualified and dedicated candidates, helping build a pipeline of potential candidates, and inducting new board members into the organization’s work and culture.
But a lot can go wrong, and a breakdown in the relationship between the board and the CEO, or within the board itself, can be damaging to the work of a nonprofit, sometimes fatally so. One group of experts outlined potential problems in this way:
Only the most uncommon of nonprofit boards functions as it should by harnessing the collective efforts of accomplished individuals to advance the institution’s mission and long-term welfare. A board’s contribution is meant to be strategic, the joint product of talented people brought together to apply their knowledge and experience to the major challenges facing the institution.
What happens instead? Nonprofit boards are often little more than a collection of high-powered people engaged in low-level activities. Why? The reasons are myriad. Sometimes the board is stymied by a chief executive who fears a strong board and hoards information, seeking the board’s approval at the last moment. Sometimes board members lack sufficient understanding of the work of the institution and avoid dealing with issues requiring specialized knowledge. Individual board members may not bring themselves fully to the task of governance, because board membership generally carries little personal accountability. And often the powerful individuals who make up the board are unpracticed in working as members of a team.4
Key to the effective functioning of a nonprofit is the board’s confidence in the CEO, and the board’s collective and collegial performance. If a board loses confidence in a CEO (rightly or not), it has the power to remove them. And dysfunction within a board can be debilitating for an organization, as it turns in on itself rather than focusing on supporting the CEO and staff in carrying out the organization’s mission. In such a situation, the CEO can spend a disproportionate amount of time engaging with the board members and trying to rebuild relationships and cohesion. While that’s important, given the centrality of the board, it can be a big distraction from the other issues the CEO should be focused on.
My principal advice to a CEO is to never take the board relationship for granted, and to invest heavily in all board relationships, particularly with the chair. Proactive engagement will reduce the chances of board dysfunction, though obviously other factors beyond the CEO’s control (such as the board members’ own priorities, motivations, interpersonal skills, and commitment to the organization and its mission) will play a role. In my case, I have fortnightly calls with our board chair, and I try to meet or have a call with other board members every month or six weeks if they are open to it—as most are. We invite board members on a trip each year to one of our country programs, and I always participate in these trips, as there is no better way to spend quality time with board members than when learning about the work firsthand together. We invite board members to events we host or take part in within their vicinity. I’m also keenly aware of the anti-slavery work that board members engage in outside of the Freedom Fund (as donors or foundation program staff) and seek to ensure we can support and align with that work wherever possible. None of this is rocket science; rather, it’s a recognition that board members are committed to your organization’s mission and success, and the more you invest in the relationship, the better chance they will play a constructive and effective role in the organization’s governance.
My other piece of key advice is that a CEO should never be a voting member of their organization’s board. It is fine for them to be a non-voting board member—though my preference is that they not be on the board at all, but have the right to attend and participate in all board discussions (unless that discussion is about them and needs to be conducted without their participation). They certainly should not chair the board. The reason for all of this should be obvious, namely that it makes it extremely difficult for the board to hold the CEO properly accountable for performance if the CEO is also a voting board member, let alone the chair. It unnecessarily increases the risk of actual or perceived conflicts of interest—such as when determining the CEO’s salary—and reduces the effectiveness of the board’s oversight role.*
THE OVERLY DOMINANT CEO
Sometimes the problem is not dysfunctional boards, but an overly dominant CEO. This can happen with highly charismatic CEOs or with founder-led organizations, where the CEO has effectively appointed most of the board members, who in turn largely defer to that CEO (e.g., with Greg Mortenson and the Central Asia Institute outlined earlier). The risk here is of insufficient accountability for the CEO, if any at all. This is not only contrary to the board members’ responsibilities but may well lead to overreach by the CEO and unacceptable risks for the organization.
CASE STUDY
A Weak Board Fails to Hold a CEO Accountable for Alleged Harassment
In 2018, multiple women working for the Humane Society of the United States, whose mission is “to end suffering for all animals,” came forward with allegations that the then-CEO, Wayne Pacelle, had sexually harassed them.5 The allegations dated back as far as 2005. Pacelle denied the claims. The organization’s board commissioned an outside investigation into Pacelle’s conduct but abruptly called it off as soon as details were leaked to the media. The board continued to stand by Pacelle and voted to keep him on the job, though he soon resigned due to pressure from staff and donors. These were not the only allegations against the organization’s leadership. Paul Shapiro, a vice president, was accused of sexual harassment by six women in 2016.6 In response, he transferred to another position within the organization.
Board members were not held accountable for apparent leadership failures, with many of Pacelle’s defenders continuing to serve. The board subsequently conducted a “reconciliation process” in which an outside mediator interviewed over 120 staff, but it refused to share the findings. Following the reconciliation process, the new co-chairs of the Humane Society board wrote:
Our problems were far greater than what was publicly discussed in early 2018. There were more victims of abuse, harassment and other inappropriate workplace behavior than had previously been known, and there were more bad actors involved as well . . . It is also clear that the Board struggled to find its way through the situation and in many ways came up short. We let the organization down and, more importantly, let down the women who were the targets of these inexcusable acts. We failed the organization.7
Regardless of circumstances, the nature of nonprofit board/CEO relationships is, if not unique, then highly unusual. Volunteer board members, who engage with the work of the organizations on a very parttime basis, have significant power over the CEO and the organization as a whole. This really hits me when I wear a board hat, as I have done at many nonprofits over the years. I’m very mindful of the knowledge gap, which is almost invariably in inverse proportion to the power gap. It’s not ideal. When I talk to other CEOs, their relationship with their boards is up there with fundraising as the issue that causes them the most stress. But, as has been said about democracy, it’s the worst form of governance except for all the alternatives. There is a very real need for an accountability structure for nonprofits, and I struggle to think of a way to do it better. That being the case, the obligation of boards and nonprofit leadership is to invest in the relationship to make it work as well as possible to advance an organization’s purpose and impact.
And with that, we come to the end of this section on “people.” We’ve examined the roles of the CEO, staff, and the board and the way in which culture—including diversity, equity, and inclusion—is so key to the effective operation of the organization as a whole. As always, the golden thread running through this analysis is the importance of purpose, which provides not only the direction of travel but much of the intrinsic motivation that enables well-led nonprofits to be hugely impactful.
We’ll now turn to your organization’s partners. These are your external stakeholders, such as those you serve, your funders, and peer organizations and networks. The people and communities, in particular, should be central to everything you do, and we’ll consider what this means in some detail. But all these partners are key to your organization amplifying and scaling its impact.
BOARD ACTION POINTS
Invest in the Relationship
Prioritize your relationships with your board members, particularly your chair.
Appreciate that your engagement can help promote, though not guarantee, board cohesion and focus.
Ensure that the board concentrates on governance and doesn’t get overly involved in management.
Don’t be an overly dominant CEO.
Internalize the importance of accountability for your and the organization’s performance.
* Board members are often called directors or trustees.
* In the US, the Internal Revenue Service requires boards of 501(c)(3) organizations to meet at least once a year.
* The nonprofit governance organization BoardSource recommends: “Chief Executive Serving on the Board. The chief executive should be an ex officio, non-voting member of the board. The chief executive’s input in board meeting deliberation is instrumental and invaluable for informed decision making. However, to avoid actual or perceived conflicts of interest, questions concerning accountability, or blurring the line between oversight and execution, chief executives should be non-voting members of the board, unless not permitted by law.” See “Recommended Governance Practices,” BoardSource, accessed July 25, 2023, https://boardsource.org/wp-content/uploads/2016/10/Recommended-Gov-Practices.pdf.
PARTNERS
Mobilize External Stakeholders
Alone we can do so little; together we can do so much.
—Helen Keller1
The Freedom Fund’s origin story is a compelling example of the power of collaboration. In early 2013, there were three significant, privately funded efforts against slavery. Each was being driven and financially supported by its own group of philanthropists. The first, Walk Free, had been founded by Australian billionaire philanthropists Andrew and Nicola Forrest and their daughter Grace Forrest. I was the CEO of Walk Free at the time. Our focus was on producing the world’s first global slavery index2 and building an online movement of activists around the world. The second was backed by the Legatum Group, a Dubai-based private investment firm with a strong free-markets philosophy and a deep commitment to supporting clusters of community-based organizations to drive community-level change. The third was Humanity United, the progressive human rights foundation founded by American billionaire philanthropists Pierre and Pam Omidyar. Its primary focus was on forced labor in global supply chains.
Somewhat remarkably, these philanthropists—each with quite different worldviews and strategies for tackling slavery—recognized that there was a need for greater coordination and collaboration across the anti-slavery space. Sufficient trust and respect existed between the philanthropists and the leadership of their foundations to support productive discussions. The result was the creation of a new organization, the Freedom Fund, which would be tasked with developing a new strategy to combat slavery and help bring greater cohesion across the anti-slavery space. Each group of philanthropists committed significant multi-year funding to the new initiative. Following a global search, I was very pleased to become the Freedom Fund’s first CEO.
While we started the organization from scratch (as recounted in the Introduction), the Freedom Fund had the benefit of the financial and public support of these three backers, which gave it considerable momentum from the beginning. It also benefited from partnerships and relationships these funders had already established with local grassroots groups in India and Nepal. As a result, we were able to incorporate local communities’ input into the early design and strategy of the organization when we launched our initial programs in these countries. After their initial five-year commitment, each of the funder groups renewed their financial support for the Freedom Fund, and all are ongoing funders. To date, the collaboration has withstood nine years of intensive engagement and impact.
The Freedom Fund’s origin story provides a powerful illustration of the power of partnership. It’s a highly unusual example of how some of the world’s leading philanthropists subsumed their desire to do things their own way and came together to create a new organization, over which none of them had majority control, and which would design and embark on an entirely new strategy to tackle modern slavery. While philanthropists often push for greater collaboration between nonprofits they support, they rarely have the same enthusiasm (or incentive) to collaborate themselves with their peer funders. But when they do, the results can be transformative.
Partners are central to effectiveness for nonprofits. Your most important partners are the individuals and communities you serve. Some may quibble at calling them partners, but to my mind, this is the only way to view the relationship. You depend on each other. Your organization may wield considerably more power than those you serve, but without them you have no purpose and no impact. Also, treating them as partners leads to healthier interactions, better-informed programming, and better outcomes.
Your funders are another core constituency. Without adequate funding, the most powerful mission and strategy will come to naught. Here again, some may balk at labeling this a partnership, particularly as power here is reversed, with the funders (particularly philanthropists and governments) generally wielding significant power over those they fund. But this is a partnership. Your organization and its impactful work provide your funders with a very tangible way to make a difference and contribute to the public good. That’s of great benefit to funders, who, after all, are providing funding because they want to help drive change. We’ll look at ways that relationship can be strengthened to the benefit of both.
