Executive Sessions Promote Health

Empower your Board of Directors to have effective Executive Sessions that protect the agency and maintain the trust with management. Here are 10 intel ideas to 10x your Executive Sessions.

1.??????? Protocol of Executive Sessions –

Most Board Meetings without the CEO are known by board members and CEO in advance. A lead director or Board Chair needs to report a summary of the discussion to the CEO after the Executive Session. Motions from the Executive Session need to be written and saved just as minutes from regular meetings of the Board. The best schedule is a thirty-minute meeting at the end of the regular board meeting for directors to discuss CEO performance informally. The Board Chair needs a strong hand to keep this from being a time when the loudest voice gets to say anything.? Within 48 hours, the lead director or Board Chair has a conversation with the CEO which can assist the CEO to sharpen their reports or add perspective. Meanspirited gossip is not part of the call.

2.?????? Legal and Audit Matters

Members have an opportunity to review the 990 and legal issues. If there is fraud discovered, the board has indemnified itself with a reasonable attempt through the Executive Session. Most of the agencies with TurnAround Coaching have had instances of fraud or financial misstatements. A nonprofit is an easy vehicle for fraud to occur. The Executive Session may not discover the fraud, but it shows Board attempts at internal controls. The lead director should also report the results of this meeting to management

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3.?????? Succession Planning

Boards need to plan for three positions – Who will fill in if the Executive died tonight? What is the plan to hire or groom the next Executive? What is the plan to groom the next Board Chair? These topics may require an Executive Session or a Session with the Executive that excludes the current Board Chair. The lead director should also report the results of this meeting to management.

4.?????? Discussion of CEO Compensation –

The Board should have access to Candid Guidestar, comparable 990s of other agencies, and any other reports to decide the proper compensation. I suggest adding 10% to the final number. Operating from abundance helps the spirit of the CEO and removes temptation to occasionally look at other opportunities. Of course, the Board will inform the CEO of their decision.

5.?????? Board Delegation to Management Relationship –

The Board should have an annual Executive Session on their relationship with the CEO. ?A group of two or three members should ask the CEO what is helping or hurting both the delegation process and the trust relationship with the Board and Board Chair. It is not sustainable to have a dysfunctional Board meeting where people can easily criticize CEO behavior. It is not sustainable to have a low trust relationship between the Board Chair and Executive Director. One should resign. The lead director should also report the results of this meeting to management.

6.?????? Intraboard dispute on Governance Process Policies –

These policies should be reviewed annual in Executive Session. Does the Board follow them to use the 1,000 minutes per year of board time effectively? Are there policies which should be added, dropped, or changed? This is also a great time to educate new board members on Policy Governance. The lead director should also report the results of this meeting to management. The Policies should be formally updated by the Board secretary. Board members should be aware of their responsibilities in each of the four policy areas, Ends, Executive Limitation, Board Management Delegation, and Board Process policies

7.?????? Executive Limitations Policies –

The Executive Director needs a lot of freedom to use their wisdom to execute and succeed in the three year targets of the Strategic Plan. However, there are limits placed on them by the Board. Likely the Board does not want the Executive to pay their best friend more than the others or to let other friends have services without any payment. The Executive Limitations need an annual review to see if they are just right, too many, or change is needed. The lead director should also report the results of this meeting to management and the policies should be formally edited and published. The Executive should be asked for their perspective before changes are finalized in case an unwise limitation is imminent.

8.?????? Three Year Strategic Plans –

While management has a deep review of weak signals in the environment, knowledge of the industry, and understands current agency capacity, the Board of Directors is nonetheless the final arbiter of the three-year strategy. The Board meeting on the three-year strategy and semi-annual revisions should begin the generic business questions from board members to test the strategy and contingency plans. After thorough public board discussion with the CEO, a majority of the Board members should move to continue in Executive Session where the Strategy can be confirmed, tabled pending more information, or rejected. The Board Chair should typically monitor serious editing since few, if any, board members have the depth of understanding that management possesses. The Board should reconvene with the management unless plans were simply confirmed.

9.?????? Secret Executive Sessions

After all these Executive Sessions which are reported later to the Executive Director, are there any truly secret Executive Sessions? Yes, there are two secret sessions. The first secret Executive Session is to receive whistleblower complaints –The Board Chair should declare an immediate Executive Session to respond to signed and written complaints. If the complaint is simply troublemaking, the Executive Session will be short and shows that proper consideration was given. A complaint that has merit should be kept in Executive Session and not revealed to Management until the complaint is resolved or the Executive is needed for information. ?

10.??? Discipline of Noncompliant Member Board Member

Another secret Executive Session. Occasionally board members will violate the Core Values of the agency. The CEO may notice and report this to the Board Chair, but the discussion or removal of the Board Member should remain in Execution Session unless laws were broken, or the issue creates other liabilities such as a lawsuit.

Boards of Directors can conduct effective and confidential Executive Sessions, both maintaining trust with management and safeguarding the agency's interests.

I’m Ronald Tompkins, Managing Coach for TurnAround Nonprofit and Executive Coaching. More information is on my website at TAConsulting.live. Many leaders start out with certificate training but need team coaching to support them as they lead and change their nonprofit. . If you read this as a board member, ask your Executive Director to involve the Board and team in coaching. You can contact me for Team Coaching at 646 824 4647. ?See you next week!