Should a CEO sit on the board of his/her own directors' companies?

Showing posts with label boards. Show all posts
Showing posts with label boards. Show all posts

Tuesday, June 25, 2013

Boards Risk the Future of the Arts When They Ignore the Youth of Today


I’m an arts buff. I love the theater, live music, dance, and the visual arts. You will often find me attending two or three plays in a weekend, or going to a museum and then on to a performance of jazz or modern dance. The more I dive into the arts, the happier I am personally, but the more fearful I am for the future of the arts. Why? I’m in my 60s, and I’m usually one of the youngest people in attendance, regardless of the genre. (Okay, so I’m not going to the rap concerts, but still….) I constantly worry about the future. Who will occupy the seats in another 20 years, especially in our classical venues?

Yes, there will always be a few young people who love Mozart or Swan Lake. In my own family I have a nephew and niece that are classical musicians. However, while young people will continue to make art, as people have done since the beginning of time, I worry whether there will be anyone who will support their art, who will buy tickets and attend the performances, allowing them to work at what they love.

This is an issue that I feel too few boards seriously grapple with. Yes, you see organizations that open up their space after work for networking and wine and cheese, but is that going to convert generations of younger people into dedicated audiences for the future? I think not. After all, it hasn’t yet. And if I’m right, what will?

Clearly, there are no easy answers. If there were, I wouldn’t be writing this essay. But I think our boards can take a more proactive role in trying to find solutions. Here are two specific approaches they can take to mitigate the loss of the arts as we know them.

Spend Time Wrestling with Generative Questions
Generative questions deal not with the “how,” but the “why.” Instead of asking, “How do we attract Millennials?” arts boards need to first understand the underlying nature of the problem. They need to ask, “Why aren’t they coming?” Is it, for instance, a lack of money to buy tickets? A lack of exposure to what is currently being offered – after all, very few people of any age are willing to spend money on an unknown? A dislike of what is being offered? A “coolness” (or lack of “coolness”) factor? An issue of not having the right clothes? A discomfort with being surrounded by people their grandparents’ age?

The board also needs to pay attention to the cues it is relying on to come to its conclusion. Is it assuming, perhaps, that young people don’t have the right clothes to wear because, on the rare occasions they do come to the theater, they always come in jeans? Or, did the board focus on the fact that less time is spent teaching the classics in school, and therefore the issue must be lack of previous exposure? To get it right, directors have to challenge their colleagues and ask questions like, “Are we focusing on the on the most logical explanations? Why do we think that? What else aren’t we considering?” They might even reframe the issue by asking questions such as, “What has our experience as parents/teachers/bosses taught us?”

The more information you have as a board, the more likely your decisions will be on target. Spend a significant part of each board meeting asking questions, delving into the “why” behind the “what” before attempting to answer “how.”

Include Young People on Arts Boards
If we want to attract the younger generations to the arts, we have to hear their voices. The best way to do that is put young people on our boards. Of course, “young” is a relative term. In Florida, for instance, “young” is often defined as under 60! But I’m advocating for YOUNG, including, though not limited to, high school and college age youth. These people are our future. They are the ones you want to attract as audience members. And, nobody knows better than they what is important to them.

Young people can serve on boards, even if state law prohibits them from are voting. Organizations like the Girl Scouts have been including them on boards for years. They serve next to adult directors and have all the same responsibilities for preparation and participation. In such organizations the adults have learned to respect the input of their young colleagues because they see the young people taking their job seriously and providing valuable insights to the group. (To learn more about how the Girl Scouts have successfully incorporated youth, read “Preparing the Board Leaders of Tomorrow by Involving Youth in Governance Today” by Olivia Selinger and Deb Walters, p. 187 of YOU and Your Nonprofit Board: Advice and Practical Tips from the Field’s Top Practitioners, Researcher, and Provocateurs, Terrie Temkin editor, CharityChannel Press, 2013)

Be sure to bring enough young people on the board to ensure a cohort. Nobody wants to be the only one “under 30” on a board. Typically recruiting three of anything – 20-somethings, Latinos or people with a dance background – ensures a comfort level for the directors, leading to better input and, ultimately, the best decisions for the organization.

These two approaches take work and neither is a magic bullet. However, invest the effort in experimenting with both and you will see a definite change for the better. Doesn’t your arts organization deserve the chance to enrich and extend its life?

Thursday, March 1, 2012

Is a Strong Conflict of Interest Policy Enough? A Morality Play, Act I

The University of Miami and its president Donna Shalala got an early but ugly Valentine on February 13 when the community woke up to a front-page article in the Miami Herald entitled, "Shalala’s side job stirs up concerns." It turns out that Dr. Shalala has been sitting on two corporate boards with her trustees’ blessing. The fact that she is making for her board service more than $360,000 each year – on top of her greater than $1 million annual salary from the university – in a time of upset with the One Percent wasn’t the biggest shock. It was that the corporations are owned by university trustees.

First, I must say that I have always held Dr. Shalala in the highest regard and I trust that her ethical standards and those of her trustees Roger Medel (Mednax) and Stuart Miller (Lennar) are above reproach. I’m confident, too, that all three organizations involved here have strict conflict of interest policies to which they adhere. But that doesn’t mean that those who care about the University of Miami shouldn’t be apprehensive.

When working with clients I always suggest that the litmus test for any decision is how you will feel if you wake up one morning to find the resulting situation on the front page of the newspaper. Tuesday the 13th, it was. And the response wasn’t pretty, if the Herald’s Flashpoint comments on the Opinion page were indicative. This is a private university that relies on big donations, a number of which Dr. Shalala has personally influenced. The university is just kicking-off a $1.6 billion – yes, with a “b” – campaign. I have to wonder if this publicity won’t, at least in the short term, negatively affect charitable giving and consequently what the university can offer.

I worry about the independence of a board where there is so much overlap of leadership. The university and the community are not well served if, even at a subconscious level, trustees and/or the university president hold back from sharing their most creative ideas or raising challenges and critical issues – responsibilities inherent in good governance – because they are afraid that showing vulnerability in one setting will impact their role in another. Moreover, any other trustee who hesitates to speak his/her mind because s/he isn’t part of a perceived inner circle ultimately cheats the university of his/her best efforts.

A related concern is that by going back to the same small group of community leaders to sit on so many of our boards, we are getting only one, relatively homogeneous view of what the community needs. While presumably an intelligent view, it is still an insular one. More diversity on our boards could only benefit the university and the community as a whole.

I can appreciate why any CEO would want someone of Dr. Shalala’s caliber on his/her board. But she doesn’t have to sit on a board to offer insights. If she is going to sit on a board, she’d be wise to steer clear of the boards of her own trustees. The University of Miami Board of Trustees should insist on this. After all, that group is responsible for ensuring the health of the university. It can’t risk the loss of independence, diverse thought or potential donations.

The university has been rather quiet about this flap. Time will tell what the fallout might be. But in my mind the situation serves as a morality play for other organizations. Having a conflict of interest statement is an important first step. But in scientific terms, while necessary it is not sufficient.

What are your thoughts? Is this a lesson other organizations should learn from? Or, is it much ado about nothing? Perhaps Dr. Shalala, with a lens already on her football team, is just too big a target and others don’t have to worry. Are there situations where it is appropriate for the CEO of a nonprofit to sit on the corporate boards of his/her own trustees?

Wednesday, December 21, 2011

Is the Arts and Culture Community on Your List of Potential Collaborators?

Few would argue the value of arts and culture. The vibrancy of arts and culture within a community has long been a key indicator of its livability. Individuals and companies looking to move into an area frequently evaluate the number and diversity of offerings as part of their decision-making process. Art therapy has proven helpful in treating a wide variety of conditions, from Alzheimer’s to physical and emotional trauma. And, a great deal of attention has recently been paid to the substantial economic impact of arts and culture. According to the 2010 National Arts Index, a report issued by Americans for the Arts, economic activity in the U.S., while losing ground during the recession, is still a $150‐$160 billion a year business that puts more than 2 million people to work and increasingly attracts cultural tourists (the number of foreign visitors who attend cultural events or venues has increased 23% since 2003).

However, today we have another reason to value arts and culture. It’s being used “in increasingly diverse ways to engage and build communities and address the root causes of persistent societal problems, including issues of economic, educational and environmental injustice as well as inequities in civil and human rights.” (“Fusing Arts, Culture and Social Change: High Impact Strategies for Philanthropy” by Holly Sidford for the National Committee for Responsive Philanthropy, 2011) Artist-activists are pulling us in, forcing us to examine our assumptions and the way we do business.

To-date, most of this work has emerged from and been centered in the art world. Just one example from my community is the Center for Folk and Community Art, which involves the community’s residents in story-telling, using a combination of written work, murals and public presentation. In the past it has focused attention on societal issues such as gang culture and violence, bullying, abuse and violence in teen dating relationships, the environment and homelessness.

But, arts and culture could be so much more. It could be totally integrated into the fabric of social change, where artists sit at the same table as nonprofits, private businesses and governmental agencies committed to creating a healthier place for each of us to live. This is particularly important as the artistic voices of those who have previously often been disenfranchised – i.e., those making art outside of the better supported and recognized Western European, “classical” art forms – break through, since there is much to be learned from these voices.

According to the Animating Democracy’s 2010 report, “Trend or Tipping Point: Arts and Social Change Grantmaking” there are currently more than 150 funders nationwide that have recognized the value of supporting coalitions that are dedicated to social change and are inclusive of artists. I am proud that our own local community foundation is one of them. But what of the many nonprofits currently putting together coalitions to more successfully tackle community issues that are at the heart of their mission?

If your organization is contemplating collaboration, I would like to know if your board is considering the contribution artists, arts and culture could make in your success? How intentional is your board about including artists, especially those outside “mainstream arts and culture”? How are you going about finding the appropriate partners? Please write in and share your experiences and learnings.

Monday, July 18, 2011

Succession Planning: Is Your Board Prepared for Transition?

Everyone is talking about succession planning today. Much of the conversation is motivated by the large numbers of baby boomer executives expected to retire in the next few years. While this is a real concern deserving of our strategic attention, I have to wonder why so little attention is paid to succession on our boards of directors. After all, turnover is virtually an everyday occurrence on boards. Term limits and life’s challenges move people out of office or off the board altogether on a regular basis; and fewer and fewer individuals are stepping up and into the vacated leadership positions. The result is that boards are often forced to choose creative approaches to filling the empty chairs, such as allowing people to share the leadership responsibilities or conferring key positions on inexperienced talent. Unfortunately, experience tells us that such solutions typically result in a loss of organizational momentum or effectiveness. But, this needn’t be the case if we will commit to adequately preparing our boards for transition.

I doubt there is anything we can do to bring back the days where people will spend a decade or more working their way up to a coveted leadership position. But a strong succession plan is within reach of every organization. To see how, we must first consider what a succession plan really is, and what it isn’t. It isn’t about knowing who the next three board chairs will be. It is ensuring that you have a strong board with clear procedures in place, where everyone understands the big picture, is engaged and knows his or her role. In other words, the best succession plan is having a board that regularly operates under proven practices because a board like that will be able to continue to perform effectively regardless of what position may turn up empty tomorrow or the next day.

To determine if your board is prepared for the inevitable expected – to say nothing of sudden – transitions, answer the questions below.
 Does your board have criteria for membership?
 Does your board maintain a current pool of good prospects for board membership by continuously identifying and cultivating potential members?
 Does your board “test out” potential board members by encouraging committee or other participation first?
 Does each individual on your board have a job description?
 Does your board chair have a job description?
 Has each individual on your board gone through an orientation?
 Does your board share a collective vision for the community?
 Does your board share a passion for the mission of the organization?
 Does each individual on your board have ready access to a copy of the bylaws?
 Do the bylaws indicate how the transfer of power will operate under both normal and extenuating circumstances?
 Does your organization operate according to its bylaws?
 Are the expectations of your board members clear?
 Are board members that fail to live up to their expectations asked off the board? (Is this a given, regardless of the person’s affluence or influence?)
 Are your board members provided board education at every meeting?
 Does each individual on your board understand the issues critical to the organization’s mission?
 Do your board agendas encourage participation around substantive issues?
 Are decisions consistently made on the basis of your organization’s mission, vision, guiding principles as well as defined criteria for success?
 Is every individual on your board offered opportunities for leadership?
 Do your board members know each other well enough to look forward to working with one another?
 Does your board take time at most meetings to evaluate what it is doing well and what it could do better?
 Does your board do an annual self-evaluation?
 Does your board make changes in its behavior on the basis of its evaluations?
 Does each committee have a purpose?
 Does each committee have goals?
 Are your committees held accountable for achieving their goals?
 Does your board have a crisis management plan in place?

If you answered “no” or “only sometimes” to most of these questions, you may be left wondering if there is a future for your organization when one or more of your key leaders leave. Don’t let that happen. Make a commitment today to begin working on those conditions to which you were not able to answer a resounding “yes” and soon you’ll realize that succession is no longer an issue because your board is functioning efficiently and effectively no matter who is in the driver’s seat.