Should CEOs Be on the Board and Should They Have Voting Rights?
Should CEOs be on the Board?
By direction of the board, a foundation’s top executive staff person (titled CEO for this discussion) manages all aspects of the organization. CEOs typically oversee the foundation’s money, time and human resources and act as a liaison between the board and staff. Rather than keeping the CEO in a strictly managerial position, some boards award them a role in governance as well, offering the CEO full membership—and in some cases, voting rights—on the board. CEOs who sit on the board hold a position of great privilege but also great responsibility. With an equal voice at the board table, CEOs can enjoy more stature and influence among board members. Yet, at times, they may feel conflicted between the two roles—caught in a constant balancing act between day-to-day operations and big-picture decision making. In a similar debate, some boards believe the CEO should be on the board to help inform their decisions; others think it gives the CEO too much power. This board briefing will help your board consider three main questions: what are the advantages and limitations of CEOs on boards? If the CEO is on the board, should he or she have full voting rights? How do your colleagues approach this decision? Background The model for CEOs serving on the board started in the corporate world. Most for-profit corporations position their CEO as the chair or president of the board. Foundations that follow this model often call their top executive CEO (as opposed to executive director or foundation manager). Following such corporate practice is atypical for foundations. Survey data in the table below suggests only about 25% of foundation CEOs serve as voting board members and just a small percentage of foundations CEOs are voting board member while also serving as board chair.
2002 Grantmaker Type CEO is Voting Board Member 8% 30% 41% 24% 24% CEO is Voting Board Member & Chair 0% 12% 12% 3% 6% Number of Respondents CEO is Voting Board Member 10% 32% 42%
By direction of the board, a foundation’s top executive staff person (titled CEO for this discussion) manages all aspects of the organization. CEOs typically oversee the foundation’s money, time and human resources and act as a liaison between the board and staff. Rather than keeping the CEO in a strictly managerial position, some boards award them a role in governance as well, offering the CEO full membership—and in some cases, voting rights—on the board. CEOs who sit on the board hold a position of great privilege but also great responsibility. With an equal voice at the board table, CEOs can enjoy more stature and influence among board members. Yet, at times, they may feel conflicted between the two roles—caught in a constant balancing act between day-to-day operations and big-picture decision making. In a similar debate, some boards believe the CEO should be on the board to help inform their decisions; others think it gives the CEO too much power. This board briefing will help your board consider three main questions: what are the advantages and limitations of CEOs on boards? If the CEO is on the board, should he or she have full voting rights? How do your colleagues approach this decision? Background The model for CEOs serving on the board started in the corporate world. Most for-profit corporations position their CEO as the chair or president of the board. Foundations that follow this model often call their top executive CEO (as opposed to executive director or foundation manager). Following such corporate practice is atypical for foundations. Survey data in the table below suggests only about 25% of foundation CEOs serve as voting board members and just a small percentage of foundations CEOs are voting board member while also serving as board chair.
2002 Grantmaker Type CEO is Voting Board Member 8% 30% 41% 24% 24% CEO is Voting Board Member & Chair 0% 12% 12% 3% 6% Number of Respondents CEO is Voting Board Member 10% 32% 42%