The CEO and the board
The most healthy board/CEO* relationships occur when both parties work
closely together with a common aim of furthering the organisation's
goals and broadening its financial and membership support base.
While the board and the CEO are on the same team, they do not have the
same roles. The board's job is to govern, the CEO's is to manage. It is
important not to confuse the two.
Defining the roles and the relationship
The CEO and the board share responsibility for leadership within the
community group but they fulfill this responsibility in different ways.
While the board has ultimate power and carries most of the legal
responsibility for the community group's actions, the CEO's power is
more immediate, involving day-to-day influence.
It is important that both the board and the CEO are fully aware of
where their roles begin and end. If there is any confusion in an
organisation about roles and responsibilities, it can lead very quickly
to conflict, inefficiency and low morale.
A close and trusting partnership between the board and the CEO is also
essential for good governance. Board members need to have enough
confidence in the CEO to trust that the operational micro-issues are
being looked after. This frees board members to concentrate on their
ultimate role of looking after the "big picture". One of the worst
things a board can be accused of is micro-management – paying too much
attention to detail and managing people unnecessarily, while neglecting
their governance role.
You should read the
Who does what?,
What are boards? and
What do boards do? help sheets to clarify where board and CEO roles
begin and end.
The CEO's role
Although there is no textbook definition of what a CEO's role should
entail, there is clear agreement that the role is critical in developing
and maintaining the sustainability and effectiveness of the
organisation.
It is up to the CEO to help set the agenda, assemble the information
and make recommendations that shape the board's discussions.
Specifically, the CEO's tasks will include:
- Human resource management
An effective CEO will know how to attract, retain and motivate talented
and enthusiastic staff and volunteers. The CEO is also responsible for
managing paid and volunteer staff according to approved personnel
policies and procedures that conform with current laws and regulations.
- Planning
This involves identifying aims, objectives, strategies,
responsibilities, timelines and the resources required to achieve the
organisation's mission. The CEO oversees design, marketing, promotion,
delivery and quality of programs, products and services. Responsibility
also includes developing evaluation strategies and adjustment of
systems, processes and structures in response to evaluation
findings.
- Financial and physical resources
management
It is the CEO's responsibility to present the yearly budget for board
approval and to manage the organisation's resources within those budget
guidelines according to current laws and regulations. This includes
undertaking regular risk management analyses and implementing strategies
to prevent and deal with perceived risks. The board is ultimately
responsible for ensuring that these tasks are carried out to its
satisfaction.
- Fundraising
The CEO of a community group also oversees fundraising planning and
implementation, including identifying resource requirements, researching
funding sources, establishing strategies to approach funders,
submitting proposals and administering fundraising records and
documentation. Again, the board must have systems in place to ensure
these things are done in a timely and effective manner.
- Providing a link between the
staff and the board
It is the CEO's role to manage the staff – not the board's. The board
should never undermine the authority of the CEO by instructing a staff
member. The board can give an order to the CEO, but not the
receptionist.
- Representing the organisation
The CEO needs to consistently present the organisation and is mission,
programs, products and services in strong, positive images to relevant
stakeholders and the general public. Board members, particularly the
chair, may also need to carry out this role occasionally, but this
should generally be left up to the CEO where possible.
- Setting standards
The board and the CEO have a dual role in setting the standards for the
organisation. This includes setting a good example when it comes to
ethical behaviour, loyalty, commitment, efficiency, and so on.
- Articulating the vision
The CEO is responsible for creating the right internal climate for the
organisation. This is something that cannot be done by the board. An
effective CEO is able to articulate the organisation's vision to staff
and volunteers so that they know exactly why they do what they do – and
feel great doing it.
- Board meeting roles
The CEO is responsible for ensuring that that the board is presented
with clear and logical recommendations for action, preferably well
before every board meeting to allow time for clarification and proper
consideration. Most often the board will follow the advice of the CEO
and the staff, not because the board is simply a rubber stamp but
because the staff is being paid to get it right and most of the time
they do. However, the CEO should not run the show; this means that the
board should be given options where there are options, not simply
presented with a single decision to approve.
The board's role in overseeing the CEO
One of the most important roles of a not-for-profit organisation board
is the selection and monitoring of the CEO. The ability of the
organisation to survive and thrive may well depend upon this choice.
- Selection
It is up to the board to ensure that it recruits the best CEO possible. The Recruiting a great CEO for your community group help sheet deals with this process in more detail.
- Setting the CEO's pay
An important part of the recruitment process involves setting the CEO's pay
– the package the board offers must be capable of attracting a suitable
candidate but must not demand so large a proportion of the
organisation's resources that it compromises its ability to realise its
plans and programs. Setting the pay must be a board matter; you cannot
allow the CEO to set their own salary or give the job to any of his or
her subordinates.
- Monitoring & Reviewing the
CEO
The board, in partnership with the CEO, should decide the
process, time and form of the CEO's performance reviews. Reviews must be
based on the CEO's job description and the objectives that should have
been included in with it. The CEO's salary package will also need to be
reviewed on a regular basis.
* In this help sheet we use the term "CEO" but it is intended to
apply to whatever name your group has for its head person (coordinator,
general manager, chief executive, etc.)
