Not-for-profits are a unique breed, with their CEOs facing very different leadership challenges to their publicly listed and privately-owned counterparts.
I’m still recovering from my stint as a charity CEO reporting to a board of volunteer directors. I led two separate international aid charities through rapid growth after two decades as the managing director of an advertising agency. The change from leading a privately owned business to a not-for-profit gave me a severe case of leadership whiplash. In one step, I went from running a tight, fast-moving ship where I held the purse strings and drove strategic direction, to reporting to a slow-moving, risk-averse Titanic of thin-skinned, sometimes inexperienced, volunteer board members.
The constitution of almost all NFPs prevents the remuneration of a professional board. This means the entity can be led by a high-performing CEO who is reporting to a volunteer board of well-meaning but unqualified directors. An inexperienced board can terminate a highly-skilled CEO – and they do. Cue the fireworks and a downturn in revenue.
Many CEOs in my network have observed the same problem of the lack of experience among their board of bosses being one of the most difficult challenges.
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