Paul Ayoub has served as the chair of several boards, including two significant nonprofit organizations, and is about to become the chair of the board of the largest nonprofit health care organization in the country, St. Jude Children’s Research Hospital. In this episode he shares his views on board composition, the relationship between the board chair and CEO and the critical importance of diversity, equity and inclusion to the effectiveness of the organization.
Thanks for listening!
We love our listeners! Drop us a line or give us guest suggestions here.
On being chair of the Board
First, you have to remember you are not the CEO -- you're the chair. So what does that mean? It means that you're really the coach; you're the producer. It’s not your vision. It’s your job to bring forth the collective vision and the collective wisdom of the people who are on your board and to help the CEO be the best he/she can be. You also have to remember that you're really just the temporary steward of that position. I'm sure you've both experienced this, but sometimes people will start to own their titles and own their positions and it becomes their identity.
When I have become a board chair, my first principal is that the CEO’s success is my success and so I have no desire to be out front from a management/organization point of view. The Chair represents the Board and there are speaking opportunities and public-facing events where the chair represents the organization on behalf of the board and the organization. The chair may sit at the head of the table, but there can be no ego of the chair. The meaningful reward the chair receives is knowing in his/her heart that the organization is successful and the CEO is successful.
How important is board composition and what's the best way to approach it?
Board composition and culture are everything. I think of it much like a sports team . You can have a really talented team with a weak culture or you can have a great culture and a weak team and, in either case, you're only going to get so far.
So, I think that the composition is critical. It's actually not just a good thing, it's an essential part of the fiduciary duty of a board to have the right mix of diversity of skill, talent, thought, background and, of course, critically, diversity in terms of women and people of color. It is not opinion, but proven fact, that diversity makes a board stronger and better . Also, it takes a dedicated investment in time to recruit, build, train and integrate a diverse board.
What have you found as effective strategies with respect to off-boarding board members?
Off-boarding begins with onboarding. So, when you are bringing people onto your board, it's important to tell them what the expectations and responsibilities are in every respect such as meeting attendance, doing the reading, and serving on committees. One of those expectations also should be being prepared to leave the board when their term is up, regardless of whether you have limits. I think the culture of term limits is more powerful than a bylaw that sets term limits .
Serving on the board of a nonprofit organization
If you're going to be involved in a nonprofit, you should understand why. In my view, it's a combination of duty, privilege and responsibility. I think we all have a responsibility to give back to our community, whether it's our immediate neighborhood or the larger community of the country of the world, and it's a privilege to do so. But, upon beginning serving, understanding and fulfilling the fiduciary responsibility of being a board member is critical.
Progress toward diversity, equity and inclusion has been slow - shamefully slow. It's been better of late, because world circumstances have dictated that it has to be better. There's a heightened sensitivity and deeper understanding that diversity means strength. People understand that even if you don't approach diversity from the moral point of view or that it's the right thing to do, studies have shown that a diverse board is a stronger board and makes for a stronger organization. As Justice Louis Brandeis, the founder of my firm, Nutter, said: "In the frank expression of conflicting opinions that lies the greatest promise of wisdom."
Also, keep in mind that you can't be a board member and support diversity, equity and inclusion unless you are willing to rotate off a board to make room for someone who is diverse. So, in driving diversity on boards I’ve chaired, I use that approach and it's rare to get a “no” when asking someone to rotate off of a board to make room for others.