Should Ceos Be On The Board Essay

The nonprofit board and its governance are critical to an organization’s success. Brown (2007) stresses the need for governing boards to be informed, effective, and engaged, especially because the current environment (i.e. increasing competition for resources, etc.) demands high-quality board performance. The purpose of this paper is to examine existing literature as it relates to nonprofit board governance and performance. This analysis includes an examination of nonprofit boards’ roles, responsibilities, and functions along with a review of best practices. In addition, board roles and best practices, and their correlation to board performance is emphasized. Finally, a discussion of the practical implications of the literature as it relates to DavidsonWorks’ board ties the literature to real-world application.

Another central feature of the board of directors is the question of whether the CEO is also the chairman of the board. When the CEO is also the chairman this is often referred to as “CEO duality”. In the US the CEO is often the chairman of the board. Studies have shown that the board in most cases

The word Governance is derived from ‘gubernate’, meaning to steer. Corporate governance would mean to steer an organization in the desired direction. The responsibility to steer lies with the top and the middle level of management. Governance, in simple terms, means administering the processes and systems placed for satisfying stakeholder expectation. When combined Corporate Governance means a set of systems procedures, policies, practices, standards put in place by a corporate to ensure that relationship with various stakeholders is maintained in

The members of the board are tasked with designing the organization’s structure and determining how different aspects of the organization will interact. Since the only source of revenue for Making a Change, LLC, is monies it receives from businesses and our philanthropist community who may or may not be looking to invest in the organization’s cause and/or for tax purposes.

According to the bylaws, the Finance Committee provides support and resources to the President and CEO, assists the treasurer and President & CEO in developing the annual budget and ensure that proper financial controls are in place, annually review and make recommendations regarding executive compensation, including benefits and ensure that all are consistent with arts and culture nonprofit organizations of similar size and gross revenue and verify that published reports properly reflect the operating results and financial condition of the museum (Board of Trustees, The Neon Museum Inc., 2013). In actuality the President and CEO and Chief Financial Officer (CFO) oversee the financial leadership of the organization in connection with the Finance Committee. It’s primarily the responsibility of the CFO to create the organizational budget along with the help of the President & CEO. The budget is then approved by the Finance Committee and then goes before the full board for final approval. The CFO ensures that the organization is in compliance with generally accepted accounting principles (GAAP) and Statement of Financial Accounting Standards 116 and 117

“The board’s duty of assuring that there is an effective strategy process has to go well beyond requiring and overseeing the periodic production of a strategic plan” (Morrill, 2013, pg. 14). Every plan that is put in more requires way much more than just coming up with the plan, it requires that there is no steps left out of the final decision and that things are handled in the proper manner. Overall, the governing board has a great responsibility along with the CEO when it comes to handling things in an ethical manner.

In any organization the personal and professional relationships between board of directors, CEOs, management and staff play a critical role in how effectively an organization’s operational goals and objectives will be fulfilled. Personal relationships between the board of directors and CEOs can be especially problematic when personal perceptions and emotions are influencing decisions of the organization. Singleton and Nail (1986) indicated in some situations professionals are able to handle business and personal relationships with the same individuals while others see the relationships as dichotomous. Board members that are family or long-time personal friends can create personal bias based on incentives to individual members rather than pursuing the best interest of the organization.

One of the things that I have seen happen repeatedly is that some Executive Directors truly “fall in love” with their agency and fail to adjust to the needs of the stakeholders. One of the things that nonprofits need to do is to learn from the

Schafer and Bell (2005) discuss some of the things a Chief Executive Officer must do in order to provide strong financial leadership. One thing a Chief Executive Officer must do is hire a financial staff that is knowledgeable about not only basic finance practices but those that are specific to nonprofit needs such as the ins and outs of restricted and non-restricted funds and the use of the Statement of Accounting Standard 117. The CEO must also hire an appropriate amount of staff to make sure everything is being done in the most efficient manner and allow for accountability. Schafer and Bell (2005) also talked about following a standardized set of financial practices that help keep the organization in line with everyone else so if new staff do come in they are able to come into a system that they are more than likely familiar with. The other thing that Schafer and Bell (2005) talk about is having a uniform accounting system. To do this an organization must have a chart of accounts which helps keep track of all financials and makes it easy for non-finance staff to interact with. Most of all, whether an organization’s CEO has a finance background or not it is their responsibility to develop that skill so they are able to successfully navigate that aspect of their organization and have a strong financial presence so they are able to lead in that

The CEO of an organization has a responsibility to the organization that it serves. According to Worth (2012), there are 10 primary responsibilities of a CEO. Some of these responsibilities include, but are not limited to: committing to the mission, engaging the board in planning and leading implementation, ensuring the quality and effectiveness of programs, and supporting the board. It is for these reasons I disagree that an organization’s CEO should lead the strategic planning process. As Zuckerman stated, within a healthcare organization, there is typically an internal facilitator and possibly an outside consultant during the strategic planning process. It should be the duty of the facilitator or Chief Strategic Planner to lead the planning

Joshua Kennon (2007), stated that “The board of directors is the highest governing authority within the management structure at any publicly traded company and is usually made up of the directors who are elected for a specific number of years by the shareholders”. According to Wikipedia,” A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization”.

The Key point of this case study is to identify and promote effective relationships between the board and the executive director. Clarity of roles and expectations is critical to having a successful board and executive director partnership. Regular communication is also an important component of a successful

All Foundation staff are RRCC employees and the Foundation considers their salaries as an in-kind contribution from the College each year. So technically, the Foundation does not employ any staff. As a result, while the Foundation Board of Directors sets and monitors policies, unlike most nonprofit organizations, the Executive Director isn’t supervised by the Board. Instead the RRCC President is his direct supervisor. The RRCC President is a sitting member of the board, holding a permanent position on the Board’s Executive Committee so there is a significant relationship between the Board and the President, but ultimately the RRCC President reserves the right to make the decisions regarding the Executive Director’s hiring, firing, pay and promotions. Due to the employment structure, the Foundation’s HR activities are conducted by the RRCC Human Resources (HR) department. The RRCC HR department has a practice of charging each department with developing the department/organizational structure and the necessary skills that are related to each position. The Director of Operations, together with the Executive Director, conducts the majority of hiring and personnel management in alignment with the policies and procedures of the RRCC HR Department. While HR policies and procedures are developed and monitored by the RRCC HR Department, succession planning is a departmental affair and consequently must be

This board of directors shares the governing influences upon the MCO as a whole. As Kongstvedt reveals, “the final approval of corporate bylaws rests with the board. It is the bylaws that determine the basic structure of power, both that of the plan officers and that of the board itself. Because significant liability issues around the Board of Directors each board member must undertake his or her duties with care and diligence” (Kongstvedt, 2009). This governing board of an MCO is imperative, as the capital that is often times required is controlled by this specific governing body. Furthermore, the governing board also has the obligation to release the necessary financial statements to stockholder (Kongstvedt,

Differences between the management styles of founding executive directors (ED) and managing executive directors exist because the two positions essentially have different job descriptions. Because the founding executive typically establishes the nonprofit organization, he or she brings a unique perspective. The founding ED usually is the chief visionary for an organization, with the responsibility to establish the organization and guide it to early success. Taking an organization from start-up to established operation usually requires someone with a strong and passionate personality, with a management style that makes fast decisions and motivates people to action. The managing ED, on the other hand, usually takes over an organization with an already established structure in place. The decision-making needs of the organization have evolved to the point that the organization needs mechanisms for shared responsibility and authority (Gottlieb, 2005).