In the struggle to survive, you must get the basics righty

In the struggle to survive, you must get the basics of CEO and Board right - and closing a charity is not always a bad outcome, writes CCA CEO David Crosbie in Pro Bono News, 10 October.

In the struggle to survive, you must get the basics right, Pro Bono News, 10 October

Announcements about the demise of White Ribbon in recent days have provoked considerable discussion and conjecture. What does it say about the state of the charitable sector if a high-profile charity like White Ribbon can go out of business? 

White Ribbon was previously a member of CCA and I had regular meetings and discussions with the long-standing CEO Libby Davies about the organisation. I am not sure some of the viewpoints expressed in various media outlets (including Pro Bono News) and in the social media discourse reflect what I understand about White Ribbon or its role. 

At this stage, I understand there are still options being explored for White Ribbon, but the fact is many charities do wind up – for a broad range of reasons. In this case, as in many others, I think there are three important issues that merit further discussion and consideration:

1. Closing a charity is not always a bad outcome.

Some charity CEOs, their boards, and their founders would rather struggle on in desperation than accept that maybe the time has come to end the continuous battle to survive and accept that circumstances have moved on from when the charity was formed. 

There are many situations where it is in everyone’s best interest to close the organisation, but closing down a charity can be a challenging task. There are relationships and lives involved, sometimes good people will lose their job. The emotions, the sense of ownership and belonging that are often associated with charity engagement can be overwhelming at both an individual and collective level. And yet, if the charity is no longer fulfilling its purpose or becoming an obstacle to further development and progression within a community, not closing can be the wrong decision. 

As a board director, I have argued for the closure of a charity, an argument I lost. I have also helped a charity close to allow a new, much more comprehensive and effective service take over within the community. The circumstances may vary enormously, but closing is an option many charities will need to consider at some point in their lives.

The important point to make is that closure is not always about failure, in fact, it can reflect success. When a charity has delivered on its purpose, why should it keep operating?

2. The role of CEO or its equivalent is critical to all charities.

I have seen some very questionable appointments of charity CEOs. This is not surprising in an environment where many people believe the CEO of a charity is somehow less competent than a CEO or its equivalent in business or government. I have been told by some board chairs that they are seeking to step up their charity CEO role by appointing someone with business or government credentials. My response was that this is a somewhat limited and limiting viewpoint.

Having good business skills is undoubtedly a useful attribute, but that will not make the person a good CEO in a charity. The CEO role in charities is more complex than business. For charity leaders, the bottom line is often longer-term social and environmental impact achieved through strategic community engagement. It is not all about products and profits, customers and costs, markets and money. Charity leaders tend to want to make a difference, have a passion for their work, and understand through experience what it means to change people’s lives for the better.

The best charity leaders I know are courageous yet humble; display empathy but demonstrate the strength to have the difficult conversation; are insightful but willing to learn; want to have fun but know how to work hard at whatever needs to be done. Most importantly, they lead by example, are vulnerable enough to bring others with them, and have grown through their failures. 

I was recently shown the package of role requirements for a CEO vacancy. Under the required skills section there were 20 separate key requirements including: media and public speaking, change management, business and financial planning skills, understanding the specific area of work including legal and other considerations involved in the organisation, government relations, broader public affairs and stakeholder management, policy development, staff development, OHS, etc. etc. The specification of tasks and responsibilities contributed a further three pages of dot point requirements. All up, the specifications amounted to almost a dozen pages of catch-all expectations that lacked a clear narrative about where the organisation had been, where it wanted to go, and what role they hoped the CEO would play in helping it get there. In my experience this is not unusual – charity leaders are expected to be all things to all people. 

We all need to encourage and support emerging leaders in the charities sector, but if I am asked about whether someone is likely to be a good CEO, I tend to look at what they have already achieved. Successful experience in a charity is invaluable because it usually entails having made mistakes and learned how to make things work despite all the barriers. 

Regardless of how you judge who is a good charity CEO, the bottom line is that organisations with experienced and competent CEOs will invariably do better than organisations where CEOs lack the experience of what it is to be part of a successful charity. 

3. Boards need to know their role and ensure they have the best possible CEO for their organisation.

Given the importance of the CEO role, the most important task for the board of a charity is appointing the right CEO. This is not just about choosing someone they like or know, or who they think may be able to do the role. This is about having a clearly defined narrative about the best possible person, a narrative that goes beyond the all-encompassing list of desired skills.

Boards also need to recognise the distinction between their role in setting organisational direction and overseeing accountability structures; and the role of the CEO in making it all happen. All too often, board directors cross the line and become so involved in an organisation that any accountability is destroyed through their interference. You cannot hold the CEO and other staff to account in critical areas like delivering a balanced budget if board directors are making decisions about staffing and other expenditures. Being fully committed to the purpose of the organisation is a requirement for all board directors, but it is not a license to become involved in operational issues.

Charities are not a business, they are about people’s passions, their values, their relationships. When a charity loses its way, it is often because the wrong people made the wrong decisions at the wrong time.

Never has it been more critical to have people committed to the purpose involved in charities, people with experience and knowledge of the work of the charity, and the skills to deliver successful outcomes. Competition has reached a new level of intensity. A diverse board that understands its role and a CEO that knows how to deliver real outcomes is becoming the core requirement for charities now and in the future. Anything less will guarantee ongoing uncertainty and a struggle to survive.

Read on Pro Bono News: in-the-struggle-to-survive-you-must-get-the-basics-right