Dear Nonprofiteer, Does the Board’s Personnel Committee control personnel?

Dear Nonprofiteer:

I’m the chair of the Board’s Personnel Committee at a small social-services agency.  We’ve routinely been involved in interviewing prospective staff members and in evaluating current ones, and have created a number of forms and procedures for doing so.  Now we have a new Executive Director, who says that interviewing and evaluating staff is his job.  How can we exercise our oversight function if we’re not allowed to oversee hiring? 

Signed, Personnel is Personal to Me

Dear Personal:

Your oversight function consists of hiring and evaluating the Executive Director.  All other personnel decisions are his, and if you don’t like them your remedy is to fire him.   

I realize this is a shock to agencies that evolved from kitchen-table operations where the Board had day-to-day management functions.  If the Board is managing the agency, it would have to be managing the agency’s personnel.  But now that you have an executive director, the Board’s function is no longer to manage but to govern–and governors do not evaluate personnel.  (If there was a previous executive director who permitted your committee to assess employees, s/he was either ignorant or unable to assert authority.) 

So what’s left for the Personnel Committee to do?  More of what you’ve already done: develop policies and procedures.  Go beyond staff evaluation issues to consider what benefit packages the agency could offer to increase staff retention and improve staff morale.  Create systems for abiding by the many laws affecting employment, including equal opportunity, overtime, labor organizing and workplace safety.  Or go even further: reinvent the Personnel Committee as the Human Resources Committee and concern yourselves with the best use of all the agency’s human resources.  Create volunteer programs.  Conduct Board recruitment.  There’s plenty to do.

What you mustn’t do is be a court of last (or first) resort for disgruntled employees.  If an employee comes crying to you or any member of your Committee, your job is to tell that person to go back and work it out with his/her boss. 

What if the Executive Director is a lousy personnel manager?  The Committee certainly has the right–indeed, the duty–to counsel the ED on ways he could better lead his staff; and, if he’s unresponsive or incurably inept, you have the right to recommend to the full Board that he be relieved of his position.  What you don’t have the right to do is tell him that Susie is discontent with the assignments he’s given her and that he should therefore alter those assignments; or that Bobby’s feelings were hurt by his tone of voice in a staff meeting.  A Personnel Committee which intervenes between Executive Director and staff is creating centrifugal force that will cause the agency to fly apart.

The democratic impulse is so strong in grassroots nonprofits that it seems counterintuitive to many people, but nonprofit agencies are not democracies: they’re hierarchies in which one person (answering to a full Board of Directors) makes the management decisions.  Key among these management decisions is who to manage–and that means personnel belongs to the ED. 

If you reconfigure your group as a Human Resources Committee, and direct its attention out into the community (as Boards are supposed to do), you will find resources for the agency that the Executive Director would never be able to secure–and leave the ED in peace to do his job. 

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11 Responses to “Dear Nonprofiteer, Does the Board’s Personnel Committee control personnel?”

  1. Gene Finley Says:

    Great advice.

    You might want to consider operating a whistle blower system. Just make sure the goal is resolution, not retaliation against management or the reporting employee.

    Also, there is no substitute for good program measures in a charity. The measures can be a very valuable tool in determining management effectiveness if done correctly. If the statistics aren’t good or are just plain not believable, elevating the oversight of the ED is usually a good idea.

  2. Nonprofiteer Says:

    It absolutely makes sense to measure program outcomes as a proper surrogate for Executive Director (and, by extension, whole-staff) effectiveness.

    I’d like to hear more about a whistleblower system: if you mean that in certain well-defined situations (suspected embezzlement, e.g.) employees are privileged to go to the Board, that seems like a) a good idea but b) incredibly susceptible of abuse.

  3. BC Says:

    Sarbanes-Oxley requires you to have a whistleblower policy in place. NFPs aren’t exempt.

  4. Nonprofiteer Says:

    Thanks for that word to the wise–I’m not as up on Sarbanes-Oxley as I should be.

  5. Anita Bernstein Says:

    BC is mistaken: Sarbanes-Oxley governs only publicly traded corporations, although some nonprofits try (voluntarily or with external encouragement) to follow its principles. Sarbanes-Oxley certainly doesn’t set up a direct conduit between all whistleblowers and the board; that would be a mad use of the directors’ time.

  6. Nonprofiteer Says:

    Thanks for the clarification. It would indeed defeat the purpose of the Executive Director’s personnel authority, and waste the Board’s time, to give everyone direct access to Board members so long as they describe themselves as “whistleblowers”–especially as every disgruntled nonprofit employee sees him/herself as such, by which s/he means “righteous avenger and preserver of the essential nature of the charity against the evil designs of the ED.”

  7. concerned Says:

    Hello,
    There is not enough space on this page to explain what goes on in the nonprofit agency I currently work for. The “ED” or president as she is now called does so many under handed things I could not even begin to tell you. “Go to the board”, you say – what board? There are about 5 of them 2 of them don’t even live in the state and one of them is thought to have a severe case of depression or Alzheimer’s. She governs the board and makes the decisions for them. They are a board on paper only. When major decisions are made, like policy changes and such, “she” does it. She changes the rules to fit however she needs them to fit at the time. She plays with people’s money. She makes salaried people clock in and out. If you miss a punch she will hunt you down to give a time. Her mother -in-law who just recently retired was third in command in the company. Her husband worked there, her father in law worked there, her Son works there, her nephew worked there and she tried to get her step daughter to work there. Do you think there is any bias situations here? She is very open about favoritism to some of the clients served and it makes for bad feelings among others. I think you can have favorites, but treat everyone the same. She recently implied to a staff person who her friends could and shouldn’t be in the agency. If there is an accounting error on payroll, which is the agencies fault, she makes the staff repay every penny. Wage and hour has been in more than once to investigate, but she always manages to squeak through without ALL records being seen. It is a sad situation that the employees come in everyday and work very hard and then are treated the way they are. We feel there is no place to turn. People need their jobs and are terrified to report anything. If she finds out you reported anything she will fire you. She has it written in the policy book that you have to go through the chain of command BEFORE going outside the agency. We had a small glimmer of hope a few months ago when the state mandated that there be a Standing Committee developed. The Standing Committee had full intentions into looking into resolution for some of these issues. When she found out – by searching out the minutes to the meetings, she put a stop to the committee real quick. She got rid of the current chair and guess who got the position – “yes” – the mother in law. The first meeting with the MIL as chair, the president ALSO sat in and gave specific instructions as to what was and wasn’t to happen in those meetings. Our hopes were then gone. Please give me some direction to turn. The president is the co-founder (the founder being deceased) but there must be someone who can step in and say – you can’t be doing this.
    Thanks for your time.

  8. Nonprofiteer Says:

    You’ve described a situation so complicated I doubt I can do it justice; but my first thought is that you should go to whatever state agency decreed the creation of a Standing Committee and report that the Executive Director has interfered with its mandated oversight function. (I don’t know what sort of state agency, in what state, could mandate such a function; is your agency a state contractor?) If there’s a legal requirement and the ED has evaded it, you can report that fact and (most likely) be protected by your state whistle-blower statute.

    If you think the ED’s activities are resulting in the filing of false reports with the IRS or the state Attorney General (for instance, if salaries are incorrectly or falsely reported on the 990 Form), you can likewise notify the regional office of the IRS or the Charitable Organizations division of your state’s Attorney General. There are definite limits on employment of family members (though not really on appointing family members to boards), so some of your complaints about nepotism may be addressed or addressable that way.

    What you’ve described, though, sounds less illegal than simply meddlesome and infuriating to work with. I presume there are other agencies working with the kind of clients you serve in your agency; why don’t you consider a job change? It’s fine to stand up to the powers that be, but only if you can actually effect change in the organization. Otherwise you’re just providing yourself with a very expensive ulcer.

    I urge you to at least examine your professional options outside of this agency. Perhaps without your hard work to hold it up, it will collapse as it so richly deserves to do.

  9. Michele Barrow Says:

    Thanks for your advise for “concerned”. I am now seeking other employment as the ED felt the need for me to no longer be employed by HER agency. I still feel very strongly that she should not be able to make $150.00 a year off the hard work of others and be so unappreciated and be under such a “Hitler” like atmosphere. There must be someone who can step in, call together the board of directors and let them know what there function is and to see if they are truly aware of what the ED is doing in the agency. Policy changes, demands on staff and overall treatment of staff should be reviewed by the board. I am POSITIVE that they have NO clue what really goes on here. There is always a nice front put on because people are terrified of the repercusions. The policy book states that she has final say on anything – then why bother with a board? Please tell me that there is someone out there that can investigate this. There is no hope on this end of anyone standing up to her.
    Thanks for your help.
    Unemployed!

  10. endorinoseKes Says:

    Nothing seems to be easier than seeing someone whom you can help but not helping.
    I suggest we start giving it a try. Give love to the ones that need it.
    God will appreciate it.

  11. Eddie Lamela Says:

    Quite properly written.

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