Constructive Partnership

Case law has defined the responsibilities of tax-exempt boards. Normally referred to as the 3D’s (duty of care, duty of loyalty and duty of obedience), the board’s actions primarily are centered on organizational oversight and policy setting. The chief executive is responsbility for managing the organization’s operations and resources. If the board oversteps and becomes too involved in operations, the organization’s executive management may become stiffled or feel threatened. If the chief executive does not openly communicate critical issues to the board, the board becomes apprehensive that resources and mission may be at risk.

So what is the solution?

Each party (board and chief executive) must understand their missional roles and responsibilities. Governance is the exercise and assignment of power and authority. Boards have a unique opportunity to partner with the chief executive in missional objectives.

Think about the following if, then statements:

IF the board delegates the operations to the chief executive…AND trust, candor and respect exist between both parties…THEN the board operates at the “exceptional level”, able to face and resolve problems early.

IF the board annually evaluates the chief executive, communicating the good and bad news “in and between meetings”…THEN exceptional boards can retain talented executives longer.

IF the chief executive provides tools and information to the board…THEN exceptional boards make timely decisions, resolving problems.

IF boards ensure that executive compensation is fair and competitive…THEN exceptional boards can attract more qualified chief executives.

IF missional objectives are at risk…THEN replacing the chief executive must be considered. Timing and communication play critical roles internally and externally to the organization.

Does your organization have a strong relationship with the chief executive? Accountability works both ways in creating a constructive partnership.

For more information about Constructive Partnership, see THE SOURCE12, a publication of BoardSource.

The above used by permission from BoardSource.