Tim McDermott “Effectively Working with Bad Boards
There is nothing better than a great board. A great board elevates a ministry to new levels. It provides oversight and accountability to the leadership. As a former CEO, I believe the board ultimately holds the DNA of the organization and really is the CEO’s legacy. A healthy board is a healthy growing ministry. Even if one person is off, the other members can normally ensure the organization moves forward.
But oh a bad board. Bad boards keep the ministry from moving forward. Bad boards are filled with personal agendas, control, disengagement and ultimately stifle the ministry. How does a CEO work with a bad board? Let me share some secrets to help you.
Prevention. As a CEO, I know the best time to fire someone is before you hire them. That’s what part of the interview process is about – screening out potential employee issues before you make them an employee. It’s the same way with bringing on board members. If the process of adding new board members is simply a process of “Hmm. Who do we know?” then you have a problem. For radio ministries, I highly recommend that every new board member must be a current listener and current giver. These two are non-negotiable. Even if they say “I promise I will give.” My response is to put them on the slate for next year. Also, a radio station will avoid a lot of programming problems if the board candidate is also a listener. Other musts, I believe, is someone who has served on other boards and someone who is a mature Christian. Have the board candidate meet with the Board Governance Committee. Interview them along with other candidates. Be selective based on the organization’s future needs. I also recommend not putting them on the voting board to begin with. I like an Advisory position where they serve in a non-voting position first before they get voted on the voting board.
The Disengaged Board – Now at first, this might be the CEO’s dream – not to have the board’s interference – but this type of board actually hurts the long-term impact of the ministry. A disengaged board can also lead to a frustrated staff. Boards have legal responsibilities given to them and they could actually be personally penalized for their failures. The IRS asks a lot of questions about boards each year on the nonprofit tax return to help make sure the board is doing its job. Good governance usually means a well-run organization. So how do you engage them? One way is to talk about their responsibilities from an IRS perspective and penalties they could personally incur. (This may be when they ask if the nonprofit has D&O insurance.). Another way is to make meetings worth attending. Update meetings and reading reports are boring. Instead make the board meetings more issue oriented. Invite all of them to help with strategy. That is a great place to make them feel valued. Also, send them emails (or letters) of the results of the ministry and let them know how the nonprofit is making an impact.
Boards who manage the staff. The board only has one employee – the CEO. I remember years ago a board member who called one of our staff and demanded to go on the air during Sharathon. He rambled on the air for 15 minutes while the phone calls died. I have had other board members who told me whom I needed to promote and then told the staff person they were going to be promoted. The best time to address these issues is during a board orientation. It’s a great time to tell the new board members what to do and what not to do. I also recommend creating a board job description letting the board member know the do’s and don’ts of board service. Since it can be awkward as a CEO to tell a board person they are operating improperly, I have relied on my board chair to manage the board. Most of the time this has worked out very well.
Boards pursuing self-interests. The hearts to help can be very good, but nonprofits have to be careful when it comes to using a board member’s company for services. I remember a board candidate telling me years ago, it would help his trucking business if he was on the board. I am glad that disclosure came out in the interview. The best way to handle self-interest is to have a conflict-of-interest policy. Some board members think they can’t help. They can. They just can’t be in on the vote to use their company. Also, the board member can’t benefit from the transaction in an excess way. Whatever they provide should be at FMV or below to ensure there is no private benefit.
Board wants to take the ministry in a whole new direction. I remember years ago one of the board members wanted to have us start a camping ministry. He was passionate about it and this didn’t make me a happy camper. He believed we needed to diversify and I believed we needed to stick to what God had called us to do. This went on for months and finally we resolved it by taking a vote at a board retreat on our top priorities. The camping idea didn’t make it. Sometimes ideas like this will die and you have to “trust the process” knowing what battles you will have to fight. In this case, I didn’t have to because it died on its own.
Even when the board is bad, the most important relationship is the one between the CEO and the Board Chair. As long as that is healthy, then I believe you can work through any bad board challenge.
With 40 years of broadcasting and leadership experience, Tim is now consulting leaders at radio stations and nonprofit organizations. His website his TimMcDermottConsulting.com and he can be reached at Tim@TimMcDermottConsulting.com
One thought on “Tim McDermott “Effectively Working with Bad Boards”
Having managed a number of Boards in my career I would agree 100% with your views.