It was not necessarily my intention to mine any further the situation put forth in my August 2016 blog post, Executive Transition: Cautionary Tale #1 – Settling for Less. I had a completely different topic in mind for the December blog post. However, it turns out that the last lines of the August post are haunting me now.
Fiduciary Responsibility: Serious Business
“By hiring the “best of the bunch” instead of holding themselves to a higher standard, the board failed to take seriously their fiduciary responsibility. The future of the agency was in their hands and they let the agency down, with potentially long-term damaging effects.”
At the end of this month, the organization will close its doors after over a century of providing its services to low- and moderate-income families.
Reasons cited for closure are decreasing numbers of clients resulting from changing demographics, heavy reliance on state and federal funding that has been cut, and several years of significant deficits. All true. And yet, I can’t help but wonder whether the situation would have been different if, years ago, the board of directors had not settled when selecting a new executive director.
Decisions, Decisions
That single board decision – the hiring decision – served as the catalyst for hundreds of subsequent decisions: Decisions made by the executive director. Decisions made by the board of directors. Decisions made by the executive director and the board together as the stewards of the organization. Perhaps even decisions not to make decisions or contemplate crucial issues because of an absence of true leadership and strategic thinking.
The definition of fiduciary – to hold something in trust for future generations – is something I share with every board of directors as part of every engagement. It is fundamental to a board’s responsibility. Sometimes, though, thoughtful, well-meaning individuals who care about an organization and believe in the mission don’t do enough.
How did the leadership team of executive director and board of directors let this happen? It is an executive director’s job to raise issues with the board – even, or especially, troubling ones. It is the board’s responsibility to probe and ask questions of the executive director to gain deeper understanding of the issues facing the organization. Neither party can be asleep at the wheel. Each has to hold the other accountable. And if the executive director isn’t up to the task or the board of directors doesn’t have the right complement of members around the table…what then?
All In!
This seems such a dismal note on which to end the year. So, looking ahead to 2017, let’s each of us resolve to be all in as nonprofit executives, board members, funders, donors, contributors, and consultants. Let’s promise ourselves, each other, and the clients we serve, that we will not shy away from the hard work of making difficult decisions and thinking boldly about the future.