In 2014, TMC celebrates the delivery of our 85th interim engagement. We have learned a lot from those experiences and watching organizations that made other choices. While I believe that the use of a professional interim executive is the best course for most organizations, not all of them with choose that path for a variety of reasons.
Certainly, having a board member serve as the "acting" executive presents its own unique opportunities and challenges.
- While a board member may have intimate knowledge of the organization, typically, s/he is not a nonprofit or association management professional. Further, a board member may not have experience working with organizations in transition – a critical role for someone working in a transitional executive position.
- Boards of directors have a responsibility to provide oversight of executive management. Many boards find it difficult to navigate the challenging dynamics created by having one of their own at the helm. This may create an unintended situation in which the board micromanages the “acting” executive or, more likely, abdicates its oversight function entirely. This dynamic may be difficult to undo and may negatively affect the organization and its successor executive.
- Board members serving in the executive role may be seen as having an inherent conflict of interest since they are also responsible for hiring and evaluating the performance of the chief executive.
- Some stakeholders may see the appointing of a board member into a paid position as personal inurement.
- Board members may bring "baggage" with them in the form of pre-existing relationships or positions in other organizations and industries that may limit their effectiveness as the acting executive. The individual also may be aligned or associated with one faction within the membership, which may alienate other factions.
Regardless, some boards will still choose to place a board member as an acting executive and that is unlikely to ever change. On the face of it, it is the easy decision. Before they make their decision, however, I suggest they answer the following questions.
- Is the person fully qualified and capable of being the executive of a nonprofit membership organization?
- Does this person have the emotional intelligence and transition experience to address the needs of the organization and staff during the transition and help them prepare for the arrival of the successor executive?
- Does this person have the skills and capacity to evaluate the organization objectively?
- Can the organization weather the potential explicit or covert objections of its members, staff, or stakeholders?
- Will the acting executive be able to step back into an appropriate board role (presuming the organization has not prohibited service)?
- What impact will the detailed operational knowledge gained as acting executive have on the successor executive’s ability to lead the organization?
- Will this person be a candidate for the permanent position? If so, what are the possible implications if s/he not selected? Are there other board members or staff interested in applying for the position? Will others see this temporary appointment of a board member as favoring “one of their own” and reduce the interest of viable long-term candidates?
- What are the unintended consequences of the relationship between the acting executive and the board? How will the board provide guidance and oversight to a peer as opposed to an employee?
- Will the organization appropriately compensate this person during the interim period? If so, is the board prepared to have this information made public on the IRS form 990?
- Most board members already have a full-time job and busy life. Can this person truly commit the time needed to attend to the organization's transition and management needs?
- If this person does not live in the same city as the organization's headquarters, can the person manage the challenges of living in two places and the disruption it causes on their family and professional relationships and personal life?
When advising boards, I encourage them to be clear about their exit strategy from the relationship. Board members can find the task of disentangling board and staff leadership roles of a professional colleague challenging. The board should execute a contract with the acting executive for a defined term and a clear scope of work and authority. If a board member is appointed acting executive, s/he should recuse her or himself from the decision making process, immediately resign from the board and agree not to seek a leadership position within the organization for two years.