Foundation CEO Assessment

Governing boards are typically responsible for oversight and assessment of their chief executives’ performance. AGB’s Higher Education Governing Boards: An Introductory Guide for College, University, and System Boards (AGB, 2018) identifies presidential assessment as one of the essential responsibilities of governing boards. AGB senior fellow Terry MacTaggart has enumerated the potential benefits of a presidential assessment, which include that it:

• Honors a fundamental board responsibility for evaluating board performance;
• Reinforces the leadership partnership of the board chair and president;
• Supports “raising the bar” for already able leaders who can still do better;
• Highlights warning signs and provides opportunities for course corrections;
• Deepens trustees’ understanding of the complexities of higher education leadership;
• Identifies future challenges and opportunities for the president and board to consider; and
• Contributes to board deliberations on contract renewals, extensions, and compensation.¹

Foundation CEO assessment processes can be similarly beneficial but can also pose complex challenges for the boards and CEOs of public college and university foundations. Unlike institution presidents, who report to a single campus or system board, almost a third of foundation CEOs report to both the foundation board and institution president (see Policies, Practices, and Composition of Governing Boards of Colleges, Universities, and Institutionally Related Foundations, AGB 2021). Not unrelated to reporting relationships, foundation CEOs may be employees of the institution or foundation and may receive compensation from either or both. Even in cases where a foundation CEO is an employee and wholly compensated by either the institution or foundation, both the institution president and foundation board will, inevitably, have an important stake in and potentially different perspectives on the priorities for and performance of the foundation CEO.

It seems obvious, but it bears mentioning, that foundation CEOs want—and deserve—to receive a fair, thoughtful, and comprehensive annual assessment.

CEO assessment was among the topics explored in the August meeting of AGB’s Council of Foundation Leaders and at the 2022 AGB Institute for Foundation Board Leaders and Chief Executives. Foundation CEOs raised the following concerns about their assessment processes:

• Institution-led assessments of CEOs, who also served as institution chief advancement officers, tended to focus on fundraising outcomes and associated metrics and didn’t account for the enormous amount of time and work CEOs invest in supporting and engaging their board, overseeing the endowment, and other foundation functions.
• CEOs with dual-reporting relationships experienced disparities in the goal-setting and priority-setting process, especially in an environment where campus presidential transitions are increasingly common and new presidents may lack experience with foundations and the oversight of advancement programs.
• Informal assessment processes or lack of clarity regarding annual goals and associated metrics may make it more difficult for foundation CEOs and board leaders to advocate for increased compensation or other incentives to retain high-performing CEOs.

The CEO Assessment Process

Unsurprisingly, given the complexities outlined here, no single model for foundation CEO assessment is best. That being said, the following factors should inform the process:

• The reporting relationship of the CEO;
• Whether the CEO is an employee of the foundation or the institution;
• The role and functions of the foundation;
• The structure of the advancement operation;
• Established strategic goals/key performance indicators and other metrics; and
• The HR policies of the institution or regulations regarding assessment of state employees.

Foundation CEO assessments can take different forms, but the foundation CEO and board chair should always discuss and agree upon in advance the process and metrics to be considered. For CEOs that have a dual reporting relationship to the institution president or chancellor, annual goals and metrics set by the institution should be considered among the determining factors informing the board’s assessment. Whether the CEO reports only to the foundation board or jointly to the board and the institution’s president or chancellor, the foundation board chair and institution president/chancellor should meet annually to discuss the foundation CEO’s performance. This helps to ensure that the foundation and the institution remain aligned in their efforts to advance the institution’s mission.

Some foundations rely on an assessment conducted by the chair alone while others have a more inclusive process that solicits feedback from other board leaders or the board as a whole via questionnaires or surveys. Even in cases where the foundation CEO reports exclusively to a campus president or chancellor, it can be tremendously valuable for the foundation chair to set aside some time at the end of each year to engage the CEO in an informal assessment process and discussion about their goals for the year ahead. Just as with any employee, regular feedback loops are valuable in advancing strategic priorities and correcting course if needed.

CEO Competencies for Assessment

Factors considered in a foundation CEO assessment might include:

• Strategic leadership

• Has the CEO provided vision and inspiration in leading staff and volunteers in fulfilling responsibilities and advancing strategic priorities?

• Fundraising and stewardship

• Has the CEO met agreed upon fundraising goals?
• Has the CEO built fundraising capacity and grown the portfolio of new and prospective donors?
• Has the CEO demonstrated exemplary donor stewardship?

• Financial performance

• Has the CEO established appropriate annual and long-term financial targets and managed to achieve those goals?
• Has the CEO demonstrated good judgment and prudence in oversight of foundation assets and operations?

• Board relations

• Has the CEO worked closely with the board, engaging its members as strategic partners, keeping them well-informed about issues relating to the institution and foundation, and supporting them in the fulfillment of fiduciary and oversight responsiblities?

• Talent management

• Has the CEO created a positive workplace culture and ensured that the foundation is effective in recruitment, professional development, retention, and succession planning?

Questions Foundation Boards Should Ask

• Do we have a formal process for assessing the foundation CEO? If not, does the foundation board chair provide regular informal feedback to the CEO?
• Does our CEO assessment process appropriately reflect the structure of our foundation-institution partnership and the reporting relationship of the CEO?
• How are goals for the foundation CEO established? Are they aligned with the strategic priorities of the institution and goals developed by the CEO and institution president?
• What metrics and other inputs do we rely on in the CEO assessment process?
• How will we support the professional development and success of the CEO and address any concerns identified in the assessment process?

In the months ahead, AGB will be developing additional resources on foundation CEO assessment, including a discussion at the AGB Foundation Leadership Forum that will take place January 28-30, 2024 in Los Angeles, California.

If you are a foundation CEO or a foundation board leader, we would welcome your input on this important topic. Please email me at DBass@agb.org with a brief description of how you are assessed as a CEO or the assessment process you use as a foundation board and share your perspective on principles and best practices for the assessment of foundation CEOs.

David Bass is AGB’s executive director for philanthropic governance.

¹ Terrence MacTaggart, Assessing and Developing College and University Presidents: An Enterprise Leadership Approach (Washington, D.C.: AGB, 2020).