Time for the CEO or Executive Director's Annual Performance Review by the Board Note: This is my100th Post!

Hiring, evaluation, setting compensation and firing the Executive Director of a nonprofit are all responsibilities of the Board. According to the 2007 BoardSource Nonprofit Governance Review, 74% of nonprofit boards give their ED a formal annual review. My guess is that the percentage is much lower for small organizations and even lower for Founder led organizations. But the Boards of these organizations have a responsibility to provide oversight too. This post provides some basics on providing a formal evaluation for your ED. First of all it is always best to start with what were the goals, objectives for the preceding year as the basis for evaluation. Even if the Board was not involved in setting those goals, most EDs start the year by sharing their goals with the Board so I am going to assume you have something to start with. If you have a Governance or Board Development Committee they can lead the process.

I have used an adaptation of the questionnaire for developing an ED evaluation from Compass Point's, Board Cafe. See the link to the article with questionnaire below. The evaluation form is broken into categories - Program Development and Delivery, Financial Management and Legal Compliance, Fundraising, Administration and Human Resource Management, Community Relations, and Relationship with the Board. We added a category upfront called Strategic Direction since there were major strategic issues that should be an important part of our ED's evaluation. You may have other adaptations that are important for your organization. Okay, Okay, it is a long questionnaire but it is multiple choice (excellent, satisfactory, unsatisfactory and don't know) and doesn't take that long. Ask the executive committee(Board Officers) and the ED to review the questionnaire and suggest any changes. The changes can be incorporated into the questionnaire and add two questions:
1)Add your comments. Provide examples for anything exceptional that should be included in the performance review.
2)Are there specific performance objectives which you would suggest for this year?

You will want to have this open ended feedback in addition to the multiple choise responses. The questionnaire should be distributed only to Board Members who were active during the year being reviewed. This is a very important caveat in seeking input for the review.

Deciding what questions to ask and turning the feedback into a formal review are the key elements of the evaluation process.

The results are summarized and the executive committee meets to prepare the formal review. The summarized data is very helpful in seeing the strengths and weaknesses as a composite and capturing a summary of what the Board sees as the goal for the coming year. The written review includes what the goals are for the coming year and a statement that this year's performance review will be based on achievement of these goals. The executive committee then meets with the ED and provides the review. At the review the president and ED both sign two copies - one for the ED and one for the Board.

An evaluation developed and delivered this way is not punitive nor just "You do a great job - just keep doing what you have been doing" fluff. It is an important process whereby the Board takes stock of how things are going and the ED gets formal feedback about the Board's satisfaction with their work. We take the time to formally praise the ED for accomplishments, establish and re-inforce what the Board's priorities are and let them know what areas we think they need to improve.

This open, honest, comprehensive approach to developing and conducting an ED evaluation is not hard to do and can reap strong benefits in establishing a professional board-staff relationship. A professional approach with clear goals should also provide motivation for excellent performance.

Of course, if there is to be a change in compensation an evaluation is a MUST. Change in compensation should always be based on a formal review.

This is my 100th post on this blog. Thanks to all of you who read this blog - your interest and visits have kept me motivated to keep posting. Thanks to all of you. I really enjoy blogging. It makes me think and stretch my interest and knowledge. Give it a try!

Here's wishing you well with conducting the annual review of your ED.
Board Cafe Article - Annual Evaluation of the Executive Directoring
Marion Conway Consulting