AGB President & CEO Update: Assessing Your Chief Executive Officer (Foundations)

You are viewing the Institutionally Related Foundation version of this CEO Update. System and Institution versions are also available.

Last month, I shared leading practices for strategic governing boards to assess their processes and practices to strengthen alignment with foundation priorities. In the spirit of continuous improvement, it is also critical to assess the performance of foundation chief executives to ensure that same alignment with established expectations, priorities, and outcomes.

Responsibility for Foundation CEO Assessments

Unlike their institutional peers, foundation CEOs often sit at an intersection between an institution president and the foundation board. According to the 2022 AGB and SEI Study on Operations and Investment Practices of Institutionally Related Foundations, respondent foundations indicated that:

• 43% had CEOs report to an institutional leader such as the president or vice president
• 40% had CEOs report directly to the foundation board
• 17% had CEOs who dual report to both an institutional officer and the foundation board

Digging deeper, the survey revealed that foundations with smaller endowments usually have the CEO report to an institutional leader, whereas foundations with larger endowments tend to have a more independent reporting structure.

For those foundations where the CEO reports or dual reports to an institutional leader, it is critical for the foundation board and said leader to determine how to best engage in the assessment process.

Types of CEO Assessments

Foundation boards can use several different types of assessments to evaluate their chief executive.

• Periodic and annual assessments can function as regular “check-ins” designed to give both chief executives and boards information they need to be more effective moving forward. Such assessments early in a chief executive’s term can also serve as an “early alert system.”
• Comprehensive assessments typically occur every three to five years and should be designed to achieve a greater level of understanding about the chief executive’s growth, leadership qualities, and performance. These evaluations are often used to inform contract renewal and compensation discussions and may include 360-degree input from various stakeholders, including board members, direct reports, and other key participants.
• Focused assessments can also be a valuable response to a specific set of circumstances, such as a crisis, a state investigation, or financial distress. Done well, this type of an assessment can transform a tense situation toward positive change and advancement. Focused assessments can help strengthen leadership during times of incomplete information and major consequences.

A common thread is that assessments can also strengthen the vitality and effectiveness of the institution-foundation partnership.

Essential Attributes of an Effective Assessment of Your Chief Executive Officer

While assessments vary in scope, depth, and level of engagement, it is essential that they are future-oriented and used to align anticipated performance with foundation priorities.

As with board assessments, determining what metrics will be used is critical. Additionally, assessments are a terrific launching point to identify development opportunities to improve and enhance leadership.

Many AGB members engage with the association to provide tailored support to strengthen boards’ efforts to assess and prepare the chief executive for the years to come. As a member of AGB, you have exclusive access to a proprietary array of resources to assist in conducting chief executive assessments.

Questions for board and committee chairs in planning an assessment of the CEO

What is the optimal cadence to assess your chief executive, and what type of assessment should be used?

• Regardless of the desired cadence and assessment type—and as a leading practice—the chief executive should annually write a self-assessment to summarize performance versus goals and objectives.

Who from your foundation board and leadership team, institution’s administration, and campus community should participate in the assessment?

• For foundations whose CEO reports or dual reports to an institution leader, how should the board provide support for assessments done by institutional leaders?
• For foundations whose CEO reports directly to the board, should a particular board committee lead the assessment of your chief executive before going to the full board? If yes, which committee?

Have you discussed with your chief executive the role of focused assessments, the circumstances when this type of assessment may be warranted, and the process to be followed?

Questions for board members

How will the board measure your chief executive’s progress toward your foundation’s strategic goals, such as endowment management, gift policies, or fundraising?

What does the board expect to learn from its chief executive’s assessment—whether periodic, annual, comprehensive, or focused on a specific issue?

Questions for chief executives and leadership teams

How can the results of your board’s own assessment influence your self-assessment and your actions going forward?

How can this assessment help you identify areas for further professional development?

In closing, effective assessments lead to development opportunities. I encourage foundation board chairs and/or chair-elects and CEOs to attend the Institute for Foundation Board Leaders and Chief Executives (June 12–14, 2022) to strengthen the partnership between the foundation CEO and their board’s leadership, and in turn, strengthen the foundation and the institution it serves.

Thank you for your commitment to exemplary board leadership and engagement with AGB.