If a CEO/ED is providing terrible leadership and the Board has not done the yearly evaluation required by the by-laws, is there anything an employee can do to get the Board to evaluate the CEO? When is it possible to oust a poorly performing CEO?
A Board can normally terminate a CEO at any time, although it may have to pay significant severance and, if there is a contract, buy out many months of service. You should understand, however, that it is psychologically very difficult for a Board of volunteers to cut off the livelihood of a CEO who has given years of dedicated service, even if it has not been the most exemplary service. How to get the Board to consider such action, or even start a review process, can be a really tricky question.
I assume that the leadership is, in your opinion, merely poor or wrong-headed, and not illegal. I also assume that the issues have not been – or cannot be – resolved when raised in private meetings, staff meetings, or meetings with Board committees that are evaluating programs. If so, my next question is whether your view is shared by others on the staff. A group has a better chance of effecting change than a single employee.
With a Board that has a few people paying attention to operations, questions or complaints to the right people on the Board (or if you have members, to the right members) may be enough to start the review process. If the process does not include talking to staff, however, it may not pick up the issues that concern you.
If there is a group of employees who feel as you do, it may be possible to talk “off the record” to a Board member you feel would be sympathetic, but I would not count on maintaining confidentiality. Anonymous complaints to internal “hot lines,” if you have them for issues such as whistleblowing or harassment complaints, may also initiate an inquiry. A request for a strategic plan may be a way to raise the issues indirectly.
You need to remember, however, especially if you are an at-will employee, that the CEO may deem any questions about his or her leadership to be a form of corporate treason and decide that your services are no longer needed. A firing or two of staff, who, from what I infer from your question, would have no protection from any whistleblower laws, may eventually hurt the CEO in the eyes of the Board, but you may be long gone before that happens.
If a few judicious questions about a review do not start the process, you may have to bide your time until the Board gets around to it. If nothing is happening and the failure of leadership is seriously compromising the effectiveness of the organization or you are simply not happy with the situation, you may want to find another place to utilize your talents.
I would be interested in readers’ suggestions of what you might want to do in this situation.
Comments from our Readers
Interesting question. I handled a similar situation twice in a single nonprofit, though it was my manager, not the CEO. I kept written records of their blatant lies (to the media) and misdirection. One was fired, the other promoted, but I didn't have to deal with either one again. -S. Perloff
A lot depends, of course, on the size, complexity and formality of the organization in question.
I think you are right to suggest that the writer check her/his impressions with other employees in a careful and discreet way. If the dissatisfaction is widespread, then attempting to cure the organization is appropriate. If, on the other hand, few co-workers have the same impression, then finding a different place to work may be the best course for all.
Assuming there is widespread dissatisfaction, I think finding a trusted intermediary might be a better course than approaching current board members directly. One path that might be open and less fraught would be to talk with a recently retired board member who inspires confidence and who is still in good stead with the currently sitting board. Such an individual would be in a good position, if so inclined, to bring the message to the board in a way that didn't provoke any of a wide variety of possible mistaken reactions.
A professional advisor who has some connection to the organization but who does not currently have any sort of client relationship might also be willing to be the messenger, but finding such a person might be harder. There might also be professional ethical issues that would get in the way in such cases. That would need to be explored in frank confidential discussion. - P. Barber
As a sitting board member on two non-profits - of course not. But a good board will institute 360 degree CEO yearly evals that can help with executive transitions. Like employees, CEO reviews with the Board Of Directors should be a standard - and if performance is falling behind on agreed to metrics - than increase them to every 6 mos or sooner. Just a thought. - R. Schwartz
Don's comments are right on the mark. This will, most likely, be a losing battle. I know from personal experience that, even if an Executive Director is endangering grants by not doing what we said we would do, missing grant deadlines, is having multiple grievances filed against him/her, staff turnover hits 50% in two years, and s/he shows up whenever s/he feels like it, a board will still not do anything. The only time I have seen boards act to remove an executive director is when s/he has been caught stealing money from the agency. It is best to take your talents elsewhere. What goes around comes around. I have seen this happen multiple times. You just have to be patient. (Also,when God shuts a door, He opens a window. I am now Executive Director of my own agency. Of course, I cannot joke that the fish rots from the head down anymore.) - Anonymous
I just read your column in the most recent issue of NonProfit World "Can and Employee Get Rid of the CEO? My concern is that your response might fuel a coup attempt with a group of employees going to governance authority members believing they can get rid of the CEO. After seeing my predecessor run out of this organization 24 years ago, I think your suggestions are dangerous. In our organization, employees may not access board members. We have 270 employees and if board members begin giving ear to employee concerns it can lead to chaos. I just came off nine years serving on the board for a local hospital. About two years ago and an employee sent letters to every board member essentially trashing the CEO and alleging incompetence. Some of my fellow board members wanted to hold a meeting with the employee. Perhaps part of the reason was that the employee happened to be a physician. My point was that we hire the CEO to manager the employees. I like the hourglass model!
with the governance authority at the top, the CEO at the neck and the employees at the bottom. Contact with governance members by the employees goes through the CEO. If we were going to hear the concerns of the employee, we could potentially be having hearings all the time with employees. In this case there were more than 700 employees. I felt so strongly about this that I said I would resign if the board wanted to get into micro managing employees. The board agreed not to meet with the employee.
Because I witnessed firsthand what can happen when board members give ear to employees, I had certain requirements when the board offered me the position after my predecessor left the organization. One of the requirements was that the board would not give ear to employee concerns and that if employees did contact them they would re-direct them to the grievance procedure. There simply has to be an orderly means for addressing employee concerns.
If board members do give ear to concerns, there will be no stopping this train. All employees will learn of this event, and anytime someone doesn't like a decision by the CEO, they will contact one or more board members. The CEO will find it impossbile to effectively lead the organization.
While I'm a big believer in the board doing an annual performance evaluation of the CEO, there should be no role for employees. When I have had new board members suggest that they contact employees regarding my performance, I warn them of perhaps the unintended consequences of doing this. I often have to make difficult decisions that are in the best interests of the organization's mission but may not be popular decisions with employees. If I'm going to be evaluated by subordinate employees, do you as a board member want me to make decisions that are best for the organization or that make me popular with the employees so that they give me a favorable review? --R.B. via e-mail
I appreciate your concern about staff going to the board and would not want it to be a regular event. But just as a good whistleblower policy or sexual harassment policy should allow reporting where a complainant is most comfortable because the board needs to hear things before they get out of hand. I would be very hesitant about prohibiting staff from speaking with board members. I would give the board a little more credit in being able to separate pique from damaging mismanagement. --Don Kramer
With pressure mounting on nonprofits to consider affiliations with other organizations, this workshop is designed to help you better navigate the world of mergers, acquisitions and affiliations. Unlike the corporate world, there are no financial "matchmakers" to help nonprofits identify successful partners for a merger. Learn more in our pre-recorded webinar.
Weekly question and answer
Notice of each full edition
and its free stories
Report on 501(c)(3) electioneering
What our readers say about Nonprofit Issues
Once again you've tackled a tricky question and explained it so we all can understand the issue.--M.V.
Thank you for your informative and keen advice on nonprofit matters. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. --R.T.
Have a question?
Other ways to
Talk to the Editor
Next Conference Call:
Thursday, March 20, 2014
Participate in this bi-monthly telephone seminar conference call and ask your questions directly to Editor Don Kramer.
Access the entire site
($9.95/24 hours, $17.95/3 months).
Full Day Program
A well-received full-day program that covers the current hottest topics in nonprofit law. Qualifies in Pennsylvania for Continuing Education credits.
Don is available for programs and speaking engagements ranging from a one-hour presentation to a full-day primer on nonprofit law. Contact us if you are interested in having him speak at your program.