Thursday, January 9, 2014

Why do association boards do what they do?

In 36 years of association management, I can’t tell you how many times I’ve said “why do smart business people become so dumb when they become board members of nonprofit organizations.”

As an association professional, it can be frustrating to watch (or guide) association volunteers through decision-making.

This is especially true when it comes to hiring a new association chief executive. 

I was reminded of this when I read the Wall Street Journal article about Microsoft’s struggles to find a new CEO.

The Microsoft case involves the challenge of a new CEO wanting to work for a Board that includes the company’s founder (Bill Gates) and current CEO (Steve Ballmer). “To appreciate why Microsoft Corp. is having trouble choosing a new chief executive, consider these awkward boardroom dynamics: a founder who believes he knows best, a CEO who stepped down under pressure for a faster change in strategy, and, soon, an activist investor pushing for big changes.”

While many large associations use a professional firm to aid in the search and selection of a new CEO, many association boards fail to get help and thus drop the ball in one of their most important roles as board members. 

Here are four key areas where their short-comings create long-term problems for the association:

  • Volunteer boards seem ill-equipped to conduct searches and interviews. For example:
  • An association flew me to its HQ city for an interview to be its CEO. The board served as the search committee. And, they had just two questions. Fortunately, I had three pages of questions so for the remainder of the hour, I interviewed them!
  • During a different CEO interview, I learned that the search chair had just landed from all night flight from the West Coast. He clearly was not focused on the interview. So, I was not surprised when the search firm called to say the association was flying all candidates back for a second interview.
  • For a third association, a person assisting in the search asked all the questions (search committee members were not allowed to ask questions). 
  • Perhaps my most rewarding interview came during a session where each board member had been designated to ask three to five questions in a specific area of the association’s needs. This could be a model other associations might use.
  • Many boards don’t know when or how to negotiate with finalists for a compensation package. 
  • ASAE Collaborate discussion about “Asking/Answering: ‘What's your current salary?’”
  • One association advertised a salary and added “negotiable.” But, when the job was offered, the chair said “oh, we meant it was negotiable up to that amount.”
  • Once during an interview, the board chair asked if I was comfortable with its salary range. He was stunned when I responded that no one had shared the salary range! So, he shared it. And, immediately, the board member seated next to me whispered “the last guy made ‘x’” (which was more than the chair told me they wanted to pay!)
  • Too many association boards have no idea about how to transition from the outgoing to the new CEO. This may not be an issue if the prior CEO was fired or moved on. It happens most when the CEO retires and gives a six month or year notice. Then, boards seem to think it is beneficial to have a long transition period. This is a mistake!
  • A colleague was hired to be CEO and then co-located in the retiring CEO’s office for four months.
  • Another was hired “above the existing executive director” and told “you decide whether you want to keep him on or fire him.”
  • When being considered for a CEO position, association professionals should probe about the transition plan. Don’t be surprised. And, avoid lengthy overlap with the outgoing CEO.
Monitoring & Evaluating
  • “I can’t get my board to evaluate me” was a #1 complaint I heard from colleagues and from affiliate chapter CEOs. 
  • Association boards should evaluate their CEOs at least annually. And, CEOs should ensure that it happens. Visit with your board chair to be sure it is scheduled. Provide sample evaluation tools. Assist them by providing the objectives they set and your progress toward achieving those goals.

Association professionals need to help volunteer boards improve their skills in these four areas. We must not assume that board members know what they are supposed to do nor should we assume they know how.

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