For many not-for-profit organizations, the resignation of a long-time CEO is seen as a reason to panic rather than an opportunity to take stock of the agency’s current situation and make a strategic hiring decision. Often the Board of Directors feels daunted by the task of replacement – especially if they have relied very heavily on the outgoing CEO for leadership – but their first response is to get that hiring process underway as quickly as possible. This is a missed opportunity – particularly if the sector in which the agency operates has evolved during the tenure of the departing CEO or if the organization has experienced significant growth or upheaval of any kind. It is in fact quite risky to move quickly on the replacement hiring as the costs associated with a “mis-hiring” can be very high.

An alternate response for a thoughtful Board would be to bring in an interim leader to give them time to reconsider what the organization really needs in its next CEO at this particular point in time. Instead of the steady administrator that has run the place for the last 20 years, perhaps the current need is someone who can take the organization to the next level of development in terms of mission accomplishment?   The right interim leader can also provide a Board with an objective opinion of what the organization needs going forward, informed by the unique perspective of having actually done the job for some period.

With the retirement of so many Baby-Boomer CEOs in the next decade, Boards are also going to have to try new strategies as the smaller size of the replacement pool will make the hiring timeline much longer, if they can find a replacement at all!

Contemporary models of non-profit policy governance are all clear on one issue - the Executive Director is the only employee who is hired by and answers to the Board of Directors. Ensuring that an organization has the right Executive Director – someone who is competent to run the day to day operations, can engage effectively with the Board in their strategy and governance work, and move the organization forward in accordance with its mission and values – can present a Board with a real recruiting challenge at the best of times. Now consider the difficulty when the talent pool shrinks dramatically over the next 10 years as the Baby Boomers retire. Most sectors have not even begun to think through the implications of that massive retirement and the majority of organizations have no idea where their next ED will come from. It’s time for the Boards of Directors to step up to the task of ensuring that their organizations are contributing to the development of the next generation of Executive Directors – if not for themselves, then to replenish the pool. 

Jane Rounthwaite

You’ve got a business to run.  You’re busy.  Everything is running smoothly.  As the Chair of the Board (or the CEO, Executive Director, or Board member), you’re feeling pretty confident that everything is under control.  No need to complicate life with Board meetings, Committees, policies and endless reporting. 

Or is there?  By ignoring the importance of good governance, have you left yourself open to risks that could pose a threat to your business?  Or to you and your directors personally?  Do you know the extent of your personal liability?

Does your Board meet regularly?  If not, you are probably not in compliance with your  ByLaw.  Are you in compliance with Bill 168?  If not, you are placing your organization and your Directors at risk of lawsuits and fines.  (Do you know what Bill 168 is?)  Are your policies sufficiently rigorous to withstand a lawsuit?  Are your Directors sufficiently well informed so as not to be held personally liable in the event of legal action?

But it’s not just about avoiding costly lawsuits.  Good governance also contributes to the bottom line – it builds social, human and financial capital in your organization.. 

Good corporate governance is not just for big business.  In fact, one could argue that it’s more important for smaller organizations, who can gain tremendous advantages from the effective use of their Boards and Directors.

Melodie Zarzeczny