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Successful foundations have successful foundation CEOs. When boards focus routinely on foundation functions and strategic goals but not on supporting the foundation CEO, they miss a powerful opportunity to advance the foundation’s success and the CEO’s leadership and potentially save the foundation a great deal of money, time, and effort.
According to the American Council on Education, the average tenure of a college president in 2022 was down to 5.9 years. Turning that trend around matters. While we unfortunately don’t have similar data to examine foundation CEO tenures, I can say confidently that the pressures and challenges that they face are larger than ever before.
Supporting the chief executive’s success and dealing with both challenges and opportunities that arise are responsibilities of the foundation board and may require close collaboration with the institution president. One powerful way to support the chief executive is through routine use of formative assessment.
Why it matters: Retention is not just for students—it’s also important for CEOs.
- The financial costs of staff turnover are daunting enough—an internal or external search process, travel costs, and other commitments for the new CEO, such as moving costs, facility renovations, or staff support. Too often, the financial costs could also include severance pay and other concessions.
- The human and organizational costs of executive turnover may well equal the financial costs. They include a year of interrupted strategic momentum for the foundation; time and resources for search, entry, orientation, and engagement logistics; and lost productivity due to distraction and uncertainty among senior staff.
- Foundation CEOs who also serve as chief advancement officers are stewards of critical relationships with donors and alumni. The departure of a CEO can interrupt donor cultivation and solicitation plans, potentially impacting gift flows and creating stewardship concerns.
The bottom line: Supporting the chief executive’s success is the most important function of a foundation board. Boards do that by making thoughtful decisions, ensuring that the new CEO gets off to a strong start, helping them meet and engage with key constituents, encouraging them to take care of themselves and their families, and giving them honest, candid feedback as well as support for any needed changes.
- Boards that take CEO assessment and board self-assessment seriously, conducting them in collaboration with the institution president or chancellor and using them for continuous improvement, are on a path to increasingly effective governance and successful foundation performance.
Consider these scenarios:
- A rural community college creates a foundation and hires the inaugural CEO. Her first order of business is selecting a couple of staff members to support her work. The new foundation board, which includes two local philanthropists, connects her to individuals and agencies that can help her operation grow.
- A foundation CEO is charged with adding real estate to the foundation’s portfolio. The foundation board supports the CEO throughout the process, but the new responsibilities prove too much for the beleaguered leader. After extensive deliberations and conversations, the institution president and the foundation governing board provide an exit for the CEO without extensively affecting his career or the foundation’s operations. A new CEO is hired, and the foundation board helps the incoming chief executive hit the ground running.
One of the most effective but often underutilized ways to support a foundation chief executive is routine use of formative evaluation, starting immediately.
Consider these questions and recommendations:
What is “formative assessment”? It is assessing performance to help the person improve, not to make summary judgments about them. For example, a teacher may write comments and suggestions on a student’s essay (formative) and then give the essay a grade (summative assessment). In the workplace, formal and informal performance reviews are often formative, while summative evaluations arise in the context of contracts, compensation, and bonuses.
Make formative assessment routine and consistent. One board chair-CEO meeting per month could be devoted to sharing information about how the CEO is doing, personally and professionally, from the perspectives of both individuals.
- Both often leave such conversations with follow-up plans to amplify the strengths and address any concerns.
- Regardless of whether the foundation CEO reports to the institution president or the foundation board, or has a dual reporting structure, the foundation board has a critical role to play in supporting the foundation CEO’s growth.
Consider when to use comprehensive formative evaluations. In the third year, or earlier if there are signs of trouble, CEOs benefit from a comprehensive, formative evaluation by a neutral person with CEO experience. The goal in all formative reviews is to increase the odds of success, not to judge. Formal evaluations end with suggestions for commendation and improvement.
- The foundation board can work with the foundation CEO and the institution president to determine roles and responsibilities for the board during evaluations.
Cultivate a continuous improvement mindset of treating mistakes as learning opportunities and focusing on accountability, not blame. Assessment avoidance is often due to fear of hearing or having to say unpleasant things. When blame is off the table and learning is the focus, the assessor and the assessed can adopt a growth mindset that benefits both and extends the lifetime of a successful leader.
Ensure that the foundation CEO’s goals are aligned to the institution and the foundation. Foundation boards can support the CEO by ensuring that any evaluations are made with institutional goals in mind. Ignoring the CEO’s responsibilities to the institution is a recipe for conflict and unnecessary stress.
Consider pairing assessment processes for the CEO and the board. Governing boards are where the buck stops in higher education. The board is ultimately responsible for the foundation, the board itself, and the chief executive officer. Boards and CEOs can both benefit from frequent self-reflection, annual formative reviews, and periodic comprehensive reviews.
Go Deeper:
- Review the AGB blog post “Foundation CEO Assessment.”
- Peruse the Foundation CEO toolkit.
- Consider engaging AGB to facilitate your next CEO assessment. AGB performs both president and foundation CEO assessments regularly.
Questions for Board and Committee Chairs:
- How can you support the chief executive’s growth, formally and informally?
- Who should be involved in the CEO’s formal assessments?
Questions for Board Members:
- What is your responsibility for supporting the chief executive?
- What resources does the board need to effectively evaluate the chief executive’s progress and challenges?
Questions for Chief Executives and Senior Staff:
- What is the chief executive’s responsibility for self-assessment?
- How does the chief executive approach formative evaluation with senior board leaders?
Until next month!
