2020 July

Considering the Role of the Board and the Role of the CEO

by Karen Lehman, President/CEO

A collaborative and trusting relationship between the board and the chief executive is an important indicator of a healthy board and organization.  Cooperation, transparency, accountability, respect, and frequent communication are foundational for creating a positive board and chief executive relationship.

I am often asked to clarify the role differences between the board and chief executive.  Boundaries can become unclear, particularly when the organization goes through a transition or has difficult times.  Each are expected to have leadership knowledge and experience, both have a high level of responsibility, and both the chair and the chief executive are held at the highest level of accountability in the organization.  It’s very important to know what is expected in each role and stay as much in your lane as you can! 

BoardSource has a one-page checklist of the board role and responsibilities that is to the point. Essentially, the board is responsible for:

  • Establishing identity and direction (strategic plan, mission & vision statement, budgets, etc.)
  • Ensuring the necessary resources (fundraising, board recruitment/succession planning, chief executive performance, stakeholder input, etc.)
  • Providing oversight (outside auditor contract, risk management policies, achievement of goals, financial oversight, chief executive review, etc.)
  • Board operations (board assessment, board policies, committee work, board agendas, etc.)

The board hires the chief executive and delegates the daily management of the organization to that person.  This is typically the only position that the board hires and is responsible for their performance and compensation.  The key to this relationship is communication.  The chief executive must keep the board informed about the issues and activities in the organization.  The board monitors the organization’s reporting such as financial reports that provide financial ratios and budget goals, operational dashboards and other reports that provide information on risk management, quality, surveys, etc.  There are continual checks and balances – listening, evaluating and matching what is reported along with the data and reporting.

The board is responsible for the overall health and success of the organization. The chief executive is also responsible for the same, but their focus is on the operational aspects they are managing such as the right leadership, the best systems, proper procedures, etc., while the board focuses on the results and outcomes; looking at what the data says, achieving strategic goals, obtaining financial balances, fundraising goals, etc.

Over time, board and executive leadership practices and relationships turn into organizational culture.  These cultural expectations, whether good or not so good, are often hard to change and typically are not addressed until there is a transition in either the board chair or chief executive role. Experience tells us that there are many grey areas in the board and chief executive roles and while there are best practices to be followed, there is no one right way to govern an organization and is hopefully a relationship that is always open for learning and growth. 

Together the board and chief executive’s roles are to advance the mission and strive to achieve the vision of the organization.  This requires a healthy culture and trust that allows for testing responses, verifying information and the ability to challenge assumptions. 

There is no greater sense of achievement that boards and chief executives can have when their work results in high stakeholder satisfaction, low employee turnover, meeting financial targets, providing high quality service/care and reaching strategic goals.  This can only happen when there is high trust between the board and the chief executive, and together they have a passionate mutual commitment and focus on the mission. 

MHS supports your work in strengthening the board and chief executive’s work by providing faith grounded tools and resources.  We serve and support you in advancing your effectiveness, and ultimately your mission!  For more information about our board and chief executive assessment tools please contact Twila Albrecht, MHS Program Associate.

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