The CEO vs. the Board Micromanager

By: Lisa Junker, CAE

A new board member takes his fiduciary responsibilities very seriously, but perhaps he is going about his oversight in the wrong way. How should the CEO respond?

Editor's note: See guest commentary by scrolling your mouse over the speech bubbles that appear in the text. This month's commentary provided by John Feather, CAE.

"It's great to see you." Craig shook Laurel's hand. She had arrived at NSTS just barely in time for the beginning of board-orientation day. "We're just about to get started. Was your trip OK?"

As he listened to Laurel's story about her delayed flight, Craig helped her stow her luggage in a coat closet and encouraged her to grab some breakfast. He waited for her to start chatting with Natalie, another new board member, before stepping aside to refresh his own coffee.

As NSTS's CEO, Craig always enjoyed board orientation. He appreciated the opportunity to spend time with new board members, particularly those he didn't know well already. And every year he saw them leave orientation with a better understanding of their role than they'd started the day with.

Craig took the opportunity to observe the new directors through the morning. Laurel seemed shy but asked good questions. Natalie, a long-time volunteer, was completely at home and relaxed. Stuart, the third and final new board member, was the hardest to read. He took extensive notes but rarely spoke up unless asked to.

The morning went so smoothly that they broke for lunch a few minutes early. Craig took the opportunity to step out and check for any urgent messages. He didn't see anything pressing, other than a text message from his daughter about her plans to study at a friend's house that night. He texted her back and returned to the conference room.

By the time he got back, everyone else was munching on salad and sandwiches. Bob, Natalie, and Patricia, his COO, were chatting while they ate. Stuart was speaking with Kate, NSTS's CFO. Craig smiled at both groups as he walked by them to fill his own plate.

Stuart joined Craig at the buffet as he was debating whether or not to take one of the oversized cookies. Noticing that someone had broken an oatmeal raisin in half, Craig took the half that remained.

"Hi, Stuart," he said. "How's lunch? Did you find everything you need?"

"Oh, everything's fine," Stuart said. "But were you expecting more people?" He motioned to the remaining sandwiches on the platter. Here is a situation that will make every association ED groan in recognition: the infamous board micromanager. They come in all shapes and sizes but share the characteristic that they ask insistent questions about things that we on the staff know are our responsibility, not the board's.

Hasn't this guy read John Carver? I sent him that brochure from BoardSource—why didn't he look at it? Why does he have to drive my best staff members crazy?

The answer of course is that he hasn't read Carver (even if you sent it to him) and the BoardSource material was a nice theory, but what does that have to do with spending too much on lunch?—John Feather, CAE

"We tend to order for one or two extra people," Craig said. "You never know if someone's going to eat more than you expect, or if an unexpected guest will arrive."

"What happens to the leftovers?" Stuart asked.

"Here in the office, we give them to the staff," Craig explained. "When we're meeting offsite, hotels usually donate leftovers to local nonprofits."

"Ah," said Stuart. "That's good to know." They walked together back to the conference table.

"What have you thought of orientation so far?" Craig asked as they sat down.

"It's been great. I haven't been surprised by anything, but it's all good information."

"That's good to hear. We really appreciate how eager you and Laurel and Natalie have been to dive in."

"I'm especially interested in the committee assignments," Stuart said.

"Is there a particular committee you're interested in?" Craig asked. "Definitely let Joanna know if that's the case. Or tell me and I can tell her."

Joanna, as board chair, made the formal committee assignments.

"I'd like to join the finance committee," said Stuart. "I've served as a treasurer before, at a nonprofit back home, so I have some experience that could be helpful."

"I'll let Joanna know," Craig promised.

A Closer Look

A month later, Craig heard his phone ring as he walked into his office. Recognizing Stuart's number, he answered with, "Hi, Stuart. How are you?"

"Oh, doing well. And yourself?"

"Couldn't be better."

"Is now a good time? I had a couple of questions, and I thought they would be easier to answer over the phone."

"Of course."

"Great." Craig heard some papers rustle before Stuart continued. "I've been going through the financial statements and background material from last year's finance committee meetings, just to get up to speed."

Craig was impressed. He was sure Kate hadn't asked new finance committee members to do that, so it must have been Stuart's own idea. "That's great," he said. "I'm happy to answer any questions I can."

"First, I was wondering where I can get a more-detailed breakdown on salaries," said Stuart.

"Well, if you look at the department-by-department budgets, you'll see salary applied under each of them, depending on how staff time is allocated," Craig said.

"But that doesn't show us individual salaries," said Stuart.

"It doesn't, you're right," Craig said. "We keep salary information confidential, besides mine, of course, and the other staff listed on our Form 990. It's part of my responsibilities to hire the best staff possible and to make decisions on salary and benefits."

"But isn't the finance committee supposed to oversee how the organization's money is being spent?" asked Stuart. The most important lesson of many years of interacting with intelligent, committed board members who make us insane is that this is not what they do every day. They are (usually) not trying to make us crazy; they just have a different understanding of how nonprofit governance should work. It is so simple that it took me years to fully absorb the implications. Without clear and consistent messages about how the board and staff should work together, it can easily fall apart.

The board member may have no real experience in nonprofit governance, or, as in the case of Stuart, a bad experience with another organization that he is now carrying over. A recent board member of mine who owns his own business thought that model applied to our association, and he was surprised and confused that I did not tell the board what it should do, as he would in his business. Stuart is basing his actions on some model, and the sooner Craig learns what it is, the better. Starting out with a question like "How do you see us working together most effectively?" would be useful to open a dialogue.—JF

"If you're concerned about our spending on salary or benefits overall, I'm happy to provide you with some industry ratios, if that would be helpful," Craig said. "We actually spend a little less on salary than the average association, as compared to expenses. I can also provide you with a salary analysis we did a few years ago. It doesn't list individual salaries, but it does show how we compare with other associations in the area."

"I'd definitely like to see that information, if you don't mind," said Stuart.

"I'll get it to you right away." Turning away new board member questions, as Craig recognizes, is inherently dangerous. You have nothing to hide, and the more objections Craig and the staff raise, the more alarms it will set off.

I faced similar questions about staff salaries and benefits when I first arrived, being told that they were "outrageous." Just scanning them assured me that they were not out of line for the DC area, but we took two concrete steps to maintain the balance between the board's fiduciary concerns and the confidentiality needed by staff. The first was to hire an outside compensation consultant who looked at comparables for every position in the organization and found (surprise!) that overall we were 10 percent below the market but 30-40 percent below on specific positions. The second was to create a board-level personnel committee (in our case consisting of the officers) that reviews actual salaries and benefits once a year. These two actions calmed the waters.—JF

Details, Details

"He is driving me crazy, Craig," said Kate. She had come into Craig's office first thing that morning, with a printout of yet another email full of questions from Stuart.

"There's a line between taking his fiduciary responsibility seriously and tracking every dime we spend," she continued. "I keep trying to refocus him on the big picture—like, a $500 supply budget isn't material when compared to the overall publishing budget—but he keeps coming back to whether $500 is a reasonable amount to spend on supplies."

"Is it just supplies he has an issue with?"

"No." Kate shook her head and sighed. "He goes over every line item, point by point, to see if we could save money."

"Saving money's never a bad thing," Craig pointed out.

"You know I've never in my life objected to saving money," Kate protested. "But the amount of time I've spent with him probably cost us more, just in person hours, than we've saved. And besides, I want to keep the finance committee and the board focused on the big picture."

"I think his experience as a board treasurer elsewhere is coloring the way he sees his duties here," Craig said. "It was a volunteer-run organization, so he was actually doing the financials there."

"That might be part of why he keeps coming back to salaries, too," said Kate. "If he's used to financials without a salary line at all, he might be surprised to see what staff cost."

"He's still asking about individual salaries?" Craig asked, startled.

"Just last week. I know you explained to him that salaries are confidential, but he asked if he could see a list with names removed."

"Let me talk to Joanna," Craig offered. "She and I can brainstorm a bit on how to refocus Stuart's energy."


"I've noticed the same thing," said Joanna. Her voice crackled slightly with static; she was calling Craig from the road. "There's been some frustration from other members of the finance committee, too. Stuart takes up so much time on their calls." At some point, the discussion inevitably and rightly involves the board chair. Joanna tries to intervene and at least direct Stuart in a more positive direction. Execs are reluctant to move too soon in this direction, but since other board members are complaining, she has already heard about it.

Having an ongoing board mentorship program with new board members is also very helpful, not only for the individual discussions that can take place but also so that a "call from the chair" is not perceived as a trip to the woodshed.—JF

"I think his questions are well intentioned," said Craig. "It's just that he feels the need to know every detail. Kate's tried speaking with him separately, to get those questions answered before the committee calls. But the amount of time she's been spending with him is a concern."

Craig leaned back and shifted the phone to his other ear. "I'm hoping there's a way to help him look up and focus on the big-picture impacts of our spending. But the last thing I want is to give any board member the idea that he can't question choices staff has made. Or choices the board makes, for that matter."

"Of course," agreed Joanna. "We want to redirect him without discouraging him."


There was a pause. Finally, Joanna said, "I'll give him a call tomorrow, once I'm back in my office. I can ask how he feels things are going with his committee assignment so far and take it from there."

"I really appreciate you talking to him, Joanna."

"All part of the job," she said. "I'll let you know what I find out. And maybe for next year we should take a look at the board orientation and see if there's a way to provide more training on how board members should read financial statements. Or maybe that's training just for the finance committee."

"That's a great idea," said Craig. "I'll follow up with you about it."

Statement of Purpose

Craig wasn't surprised when Stuart called a few days later. He answered the phone on the second ring.

"Good morning," said Stuart. "Do you have a few minutes?"

"Of course," said Craig.

"I spoke with Joanna yesterday. Our conversation gave me a lot to think about, and I wanted to call to clarify a few things."

"Sure," said Craig. "How can I help you?"

"First, I wanted to make sure you know that I've been really pleased with all of the help Kate's given me," Stuart began. "She's so knowledgeable, and she and the rest of the finance staff have been really helpful and responsive." One part of this fictional case study is a bit unrealistic in my experience: Stuart seems like a basically nice guy. Maybe the demon will emerge later, but for now he is asking questions in ways that are not too destructive. That is not always the case. As executive director, Craig has the responsibility, if the situation turns more volatile, to try to separate the message from the messenger. Stuart may actually be right—the association does need to change its financial paradigm—and that insight could be lost as the board and staff increasingly tune him out.—JF

"That's great to hear."

"I just didn't want you to have the impression that I question Kate or her team's competence."

"I honestly hadn't considered that at all," Craig said. "But I appreciate you letting me know."

"Talking with Joanna made me realize that I need to speak with you more directly," said Stuart. "I had some concerns about NSTS's spending when I joined the board—that's actually why I ran in the first place. What I've seen since then has made it clear to me that I was right, and we haven't really adjusted our attitude to the new economic environment. I want to help make that happen."

"What do you think is missing?" asked Craig.

"I think NSTS needs to make a cultural shift," said Stuart. "We're still living like we're in a boom economy. We have these expensive downtown offices, we order in catered food, we gave staff salary increases last year despite the fact that we've had layoffs in the industry. We have to adjust to the fact that some kinds of spending just aren't appropriate anymore."

Craig blinked. "I hadn't realized where you were coming from, Stuart. I'd definitely like to discuss—" Hearing a buzz on the line, he broke off.

"Oh, I'm sorry—there's a call on my other line that I have to take. Can I call you back later today?"

"Absolutely," said Craig. He had a lot of thinking to do before speaking to Stuart again. And now for the little secret every ED knows: When it gets ugly, it is critical for Craig to be able to vent in appropriate ways. Every gathering of association CEOs (especially if there are cocktails involved) at some point turns to stories about the outrageous antics of inappropriate, micromanaging board members. No, this is not the right answer for the CAE exam, but it happens and it is healthy and essential. Craig should not beat himself up over it, and he needs to let the staff have appropriate channels to do the same. We all have different tolerance levels for criticism—there is a reason that Mother Teresa is a saint and I am not—and recognizing when he can no longer work effectively with Stuart is important.

Sometimes, board members with the best intentions are not able to channel their energies in ways that help the organization, but Stuart is not at that level yet. With guidance, he may be able to bring his insight and experience to bear on the organization's needs.

Craig indeed "has a lot of thinking to do before speaking to Stuart again." I wish him luck!—JF

Lisa Junker, CAE, is editor-in-chief of Associations Now. Email: [email protected]

John Feather, Ph.D., CAE, is executive director and CEO of the American Society of Consultant Pharmacists in Alexandria, Virginia. He is also currently chairman of the board of directors of the American Society on Aging and treasurer of the National Hispanic Council on Aging. Email: [email protected]

This article is part of a series of fictional case studies developed for Associations Now. All people, places, and financial statements contained herein are hypothetical and based entirely on the imagination of the author. No real events are intentionally reflected.

What Should Craig Do Next?

This case study is the fourth in a six-part series of articles that will focus around the (fictional) staff of NSTS. Is there a way for Craig and Joanna to redirect Stuart's energies in a more positive way—or should they be listening to Stuart more closely? Leave a comment with your thoughts. Also see: