A new national study of nonprofit executive leadership provides a keen insight into and useful benchmarking statistics on the state of nonprofit leadership. Daring to Lead 2011 is a joint project of CompassPoint Nonprofit Services and the Meyer Foundation. The report is based on responses from over 3000 executive directors and follows similar studies completed in 2001 and 2006.
I am writing companion pieces here and at my blog at http://marionconway.com about the study. This piece discusses the results from the perspective of the Board and the other one from the perspective of Executive Directors. As always, I add my two cents along the way.
The last report, in 2006, caused quite a stir with its projection of the number of executive directors who planned to leave their position in the next five years and the need for succession planning. The magnitude of the exodus was somewhat delayed but it is definitely upon us now as 20% of the respondents were over 60. In this study 67% said they expect to leave their present position within five years. Retirement isn’t the only reason that EDs leave an organization. Planning for it remains important.
The talk is all about succession planning and developing employees to move up in the organization. But, in fact, in smaller organizations this may not be realistic. If it isn’t Boards still need to be prepared for executive turnover. The likelihood of executive turnover is much higher than most Boards realize.
I think that one of the most important things a board can do to be prepared for executive transition is to have a performance evaluation process in place. I say this because developing an evaluation process forces a board to think about what are the skills and performance criteria which they think are most important. It also causes the Board to be more knowledgeable about what is involved in being an ED of your organization. I was surprised that 45% percent of EDs said that they didn’t have a performance evaluation and an additional 8% said that their evaluation was not useful. Boards definitely need to do better in this area.
68% of EDs expressed satisfaction with their boards – not that bad a grade although it should be much higher. After all, one of the main responsibilities of the Board is to support the ED. This chart shows what EDs have to say about the areas of Board support.
An important issue for Boards and EDs is financial management. An amazing 42% of executive directors say that they don’t thoroughly understand the financial underpinnings of their organizations. At the same time boards of directors are evermore focused on financial oversight. In my experience financial management issues can be a key point of tension between a board and an ED. In addition to being a primary contributor to executive director burnout, financial instability can threaten an organization’s ability to carry out its mission and its very existence. EDs definitely need more training and development in this area and Board members with skill should think about providing skill development and not just oversight to EDs in this area. One of my favorite biographies was that of Kathryn Graham of the Washington Post. When her husband died, she became Board Chair and was ill prepared for the job. Warren Buffett was on the board and he would meet with her before each Board meeting and basically trained her on financial management. We need more Board members who are willing to step up to this task.
Fundraising, a basic Board responsibility, does not fare well at all. This is so important – for Board members to engage actively in fundraising – I just don’t understand these consistently poor results.
There is a multistack chart showing how satisfied EDs are with their Boards in relationship with the number of hours they spend on Board work. It seemed pretty spread out to me but bottom line satisfaction peaks if it is 5 -10 hours a month. If your ED is spending more time than that on Board work per month, it probably is too much.
I highly recommend that Board members read this whole report. You will get good insight into what makes EDs tick and Board-ED relationships.
Read the companion piece, “All About Executive Directors – Results of a New Daring to Lead Study on Nonprofit Leadership” on Marion’s blog here.
Marion Conway
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