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Wednesday, April 9, 2014

What boards do

After several months of discord and financial disarray at St. Augustine's University in Raleigh, its Board of Trustees removed from office the university's President, effective immediately. I don't have any unique insight into this situation, but I am impressed that the trustees of St Aug's took action. That's what boards are supposed to do.

It is natural for the public to recognize the person hired to run an organization -- its president, CEO, executive director, or whatever the title is -- as the leader of the organization, the person in charge. 99% of the time, that's true. But as we have seen at St. Aug's, the ultimate power is held by a board of directors, board of trustees, or some similar body that hires or fires the executive.

The power of the board is not always apparent because in most cases the members of the board defer to the executive. Particularly in non-profits the board tends to turn over every three to six years as volunteer members of the board cycle through their terms. It's common, therefore, for the executive to have been on the job longer than any of the board members. Often it was the executive himself or herself who recruited the board members, who feel a degree of loyalty to the executive as a result. The executive is a full-time and salaried person, whereas board members are usually allocating no more than two or three hours per week to board duties and, in the case of non-profits, are seldom compensated. The executive knows far more about the day-to-day actions of the organization than any board member, even the chairperson of the board.

But I have served on boards, and although I recognized that under most circumstances my role was to support the executive and help him or her succeed, I also accepted that circumstances might materialize when my underlying responsibility to the organization would have to take precedence. If things go badly wrong, or preferably before things get that bad, the board must step up.

Decisions to replace the leader, to merge with or to acquire another organization, to spend or to borrow large sums of money, to file or to settle major lawsuits, to file bankruptcy or to dissolve the organization... these are the big decisions that boards make. When offered an opportunity to serve on a board, bear in mind that you might be called upon to make tough decisions. If you're not willing to do that, stay off the board.