Guidelines for Board of Directors Evaluation of Chief Executive

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    Guidelines for
    Board of Directors
    Evaluation of Chief Executive

    © Copyright Carter
    McNamara, MBA, PhD

    Vast majority of content
    in this topic applies to for-profits and nonprofits. This book also covers this topic.


    Developing, Operating and Restoring Your Nonprofit Board - Book Cover

    Sections of This Topic Include

    Benefits of Evaluating the Chief Executive
    One Process to the Chief Executive (with Sample Schedule)
    Special Considerations
    Sample Form for Board’s Evaluation of the Chief Executive

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    Benefits of Evaluating the Chief Executive

    Evaluating the Chief Executive is a primary responsibility of the Board. There
    are several key benefits from this evaluation, including that the process:
    1. Ensures the Board is meeting its duty to effectively lead the organization
    2. Ensures organizational goals are being met
    3. Ensures continued development of the Chief Executive to more effectively
    conduct his or her role
    4. Ensures a formal and documented evaluation process that meets standards of
    fairness and practicality
    5. Ensures the Chief Executive values his or her role, is benefiting from it
    and therefore is more likely to stay (finding good Chief Executives is increasingly
    difficult)
    6. Leaves written record of the Board’s impression of the Chief Executive’s
    performance in case this record is needed for future verification, e.g., for
    salary increases, probationary activities, firing, etc.

    One Process to Evaluate the Chief Executive

    A Sample Schedule

    Note that, more important than doing an evaluation at a certain scheduled time,
    is doing an evaluation at all, so do the evaluation when the Board believes
    is the best time for its members.

    Activity:

    Approx. # of months before
    start of next fiscal year
    Evaluate the Chief Executive, by referencing
    his or her progress towards last fiscal year’s organizational
    goals and responsibilities on their job description

    10

    Board self-evaluation

    9

    Board retreat to address results of
    Board self-evaluation, conduct any team building and begin strategic
    planning

    7

    Strategic planning to produce organizational
    goals and identify resources needed to accomplish the goals

    7

    Establish Chief Executive’s goals for
    the next fiscal year, by referencing goals produced from strategic
    planning

    6

    Establish next year’s revenue goals and budget by referencing
    resources needed to reach strategic goals

    6

    Meets revenue goals

    6

    Fiscal year begins

    0

    Special Considerations

    1. Don’t worry about specifics of the process as much as being sure that the
    evaluation is conducted yearly.
    2. Be sure the process is fully documented in a procedure so the process is
    well understood and carried out consistently year to year.
    3. If staff members are involved in evaluation of the Chief Executive, be sure
    this procedure is clearly specified and understood by the Chief Executive.
    4. The evaluation should be carried out by a Board committee, not by one Board
    member. Committees might be the Executive Committee, a Personnel Committee or
    an ad hoc committee.
    5. If the Board perceives the Chief Executive to have performance issues, Board
    members can initiate an evaluation. DO NOT initiate evaluations only when there
    are perceived issues — this is abusive. Be sure these perceptions are based
    on seen behaviors rather than on personality characteristics.

    (See “Sample
    Form for Board’s Evaluation of the Chief Executive
    “)

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    Evaluation of Chief Executive


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