Meeting agendas

PPPA 6034

Managing Nonprofit Boards


Sessions 4-5


Board and CEO



Three Approaches

  • Chait, Ryan, and Taylor:

Governance as Leadership


  • John Carver:

Policy Governance


  • Herman and Heimovics:

Board-Centered Leadership

Governance As Leadership
(Chait, Ryan, Taylor)


  • Diagnosis: CEOs are leading, boards are managing


    • Board and CEO partnership


  • Working together in three modes

Type I: Fiduciary

Type II: Strategic

Type III: Generative


  • When board performs well in all three modes (Type III board),

that is governance as leadership




Typical Questions in Three Modes

  • Fiduciary
    What will it cost?
    Will we make money?

What are the risks?

  • Strategic

Will it help us achieve our goals?

Will it open up new opportunities?

Will it impact other goals, what are the tradeoffs?

  • Generative

Is it consistent with our mission and values?

What do we want to be?


Policy Governance
(John Carver)



  • Boards spend time on trivial,
    only react to CEO recommendations, reports
  • Leaky accountability—boards go around CEO, make judgments about subordinate staff
  • Diffuse authority—line between board and management not clear




Principles of Policy Governance

Board represents the owners

Board focuses on defining organization’s values

Rather than follow staff, board leads through policies that reflect values

Board policies in 4 categories:

  • Ends to be achieved
  • Means to those ends (executive limitations)
  • Board-staff relationship (delegation to CEO)
  • Board/governance process



Board/CEO Responsibilities

  • Policy governance empowers strong CEOs, have total latitude beyond the level of board policies


  • CEO and board chair are colleagues, not employer and employee Different functions

CEO reports to board as a whole

Chair also reports to the board

Carver prefers “chief governance officer” to “chair”


    • CEO’s responsibility is to achieve ends, accountability is to do so without violating the means policies


Carver Policies

  • Policies arranged in hierarchy from broadest to more specific—different from traditional way of dealing all the way down a silo, as presented by staff (i.e., approving plans, personnel policies, budget, reports).


  • Board deals with all silos, but only to certain level of depth, delegates rest to staff.(Says boards should not approve budget, let CEO do within defined “constraints”)


  • Board usually doesn’t go beyond second level—everything below is delegated to CEO


  • Policies are explicit, current, literal, centrally available, brief, and comprehensive (board policy book)



Ends statements

  • Clearly separate ends from means


  • Focus means on changes affecting people (mission)


  • Second level addresses consumers, products, and costs (the “swap” with society)


  • Long-range planning: Board should establish the “reason,” but should not do the planning-should “stand just outside it”


  • Evaluation of ends — often a premature emphasis, handicapped by “academic mentality”—“A crude measure of the right thing beats a precise measure of the wrong thing”




Means statement (executive limitations)

  • Pro-active requirements actually limit CEO flexibility and involve board in implementation; means statements should be in the ­negative­, saying what CEO cannot do, leave the rest to him/her


  • Start with can’t be “imprudent or unethical,” then add more detail as needed


  • Address board “worry areas” – vendor relations, treatment of customers, asset protection, indebtedness, financial condition, budgeting


  • Board should not approve budgets, personnel policies, etc.—leave to staff. Board monitors and asks “does it violate our policies?”








Criticisms/Questions About Carver

    • One size fits all
    • All or nothing, too rigid, requires unrealistic discipline
    • No board involvement with mission programs, discourages giving and fundraising
    • Top-down view of organizations
    • Not possible to separate policy from management
    • Not consistent with SOX
    • Lenders would require board budget approval, etc.
    • Requires talented CEO
    • Link to organizational performance not clear
    • Can part-time amateurs really determine realistic ends?
    • Are the owners always identifiable?





Effective Nonprofit CEOs
(Herman and Heimovics)

  • Accept executive psychological centrality
  • Provide board-centered leadership

Initiate and maintain structure for the board

Show consideration and facilitate board inter-action

Provide information to the board

Promote board accomplishments and board productivity

Envision change and innovation with the board

  • Focus on external relations
  • Informal information network
  • Know your agenda (dramatize, bread crumbs, simplify)
  • Improvise, accept partial solutions
  • Use a “political” frame




Other Issues and Considerations


  • CEO/ board chair relationship

In strategic planning

Meeting agendas

Board recruitment and development

Board assessment



    • Separating personal and professional relationships


    • Role of the board in executive transitions


    • CEO as member of the board, vote or no vote


  • CEO evaluations



















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