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Black Girls CODE Nonprofit Debacle Will Curl Your Toes is NANOE Co-Founder, Kathy Robinson’s take on the ongoing conflict between BGC’s founder, Kimberly Bryant and Heather Hiles, BGC board member. Dr. Kathleen Robinson, known around the world as America’s Nonprofit Thought-Leader spends her life in service to the charitable sector. Kathy ensures charities build the capacity they require to accomplish their important mission.
Needless to say, in her fifty years of service DR. ROBINSON HAS SEEN IT ALL and performed a deep-dive into Black Girls Code present problems. Here’s 10 key lessons she says sector leaders can learn from this very sad and public debacle.
(NANOE News first brought attention to Black Girls CODE in Jimmy LaRose’s recent article Kimberly Bryant – Heather Hiles – Founders vs. Board Members.)
Black Girls CODE Nonprofit Debacle – Lessons in Protecting Charities
There has been much press concerning the difficulties Black Girls CODE (BGC) and its CEO are currently having. Many lessons can be learned so that we don’t make the same mistakes or get into a similar situation. In addition, BGC’s situation is a reminder for some of us that rapid organizational growth has many challenges and requires that leaders support, communicate and work with each other to meet challenges effectively. Rapid growth comes with costs. We can learn or be reminded of the need to pay attention to organizational development that keeps pace with programmatic expansion. We can learn or be reminded of the need for effective financial management and reporting, the execution of effective leadership behaviors, and the need for building and maintaining strong board/executive staff communication and interactions. We are reminded of the need to keep public information accurate and up to date and to create and maintain grievance procedures that are known and adhered to, and address approved practices and procedures for when staff have a grievance against its CEO. We are reminded of the need to continuously train and orient boards to their fiduciary responsibilities and their legal obligations to act as a board in its decision making. We’re reminded of the need to involve our corporation lawyer in handling serious grievances. The value and need of involving staff at all levels in strategic decision making is also highlighted. Yes, many reminders and/or lessons can be learned from the pain BGC is currently experiencing so we don’t experience the same.
Here a just a few observations and tips for leading your organization as it grows that flow from Black Girls CODE’s issues. But first, a little context.
Black Girls CODE’s mission and programmatic direction highlights a strategic time in our Nation’s history that led to rapid growth. Black Girls CODE’s focus is on “changing the face of technology” by introducing girls of color, ages 7-17, to the field of technology and computer science with a concentration on building entrepreneurial skills and understanding. Since 2011, Black Girls CODE grew from a grassroots initiative to an international organization with 15 chapters across the United States (14 chapters) and in South Africa (1 chapter). Black Girls CODE reportedly had reached more than 30,000 students by 2022. In 2019, BGC’s three largest programs were 1) afterschool coding workshops lasting approximately 2 hours, 2 days per week for six weeks that created a safe and nurturing culture for girls to learn to code. Workshops were held at community or corporate partner organizations, called ‘sponsors’. This represented 70% of the programming budget ($1,688,307) in 2019. The second largest program in 2019 was summer coding camps providing 10-20 days of hands-on, project-based tech instruction. This represented 19% of the programming budget ($482,373). The third largest program was one-day student/parent enrichment programs that supplemented career interests in tech fields and exposed girls to technology-related careers and opportunities. This represented 10% of the programming budget ($241,187) Its current website indicates it has just received over $45 million in additional funding, presumably in last 2021 or the beginning of 2022. So, the organization is about to take another gigantic leap in growth, while going through a major nationally publicized crisis in leadership. The troubles BGC ran into are reported in the Business Insider and Forbes. Readers not familiar with the case may want to take a minute to review what was said and the issues that have surfaced.
There is no question that Bryant is a nationally recognized thought leader for her work to increase opportunities for women and girls in the technology industry. She is obviously incredibly capable in raising funds. She has received numerous awards for her work, including the Jefferson Award for Community Service for her work to support communities in the Bay Area. She in a national speaker and has a well-established reputation nationally in the tech industry. She was named to Business Insider’s list of “The 25 Most Influential African Americans in Technology”. She was also named one of Fast Company’s Most Creative People. In 2013, she was included in The Root 100 and the Ebony Power 100 lists. In 2015, the White House honored her as a Champion of Change for her work in technology inclusion. She received an Ingenuity Award in Social Progress from the Smithsonian Institution, among other awards and recognitions. She has also spoken nationally and internationally on diversity, equity, and inclusion at conferences. So, the case presented by the Business Insider and Forbes, is indeed sad and serious. Everyone wonders what happened?
As is always the case, we need to be slow in judgement without all the facts and knowing well the organization, its staff composition, operational structures and process, but given what is available to the public, a few lessons learned are worth review so that we avoid some of the mistakes highlighted in various press releases.
The board/CEO relationship apparently changed as the organization grew and became distant and perhaps hostile. Founders often are innovators. They see a need and effectively connect people to that need. They usually are effective communicators concerning the need and grow the organization to the point of incorporation and typically for through its initial formation days. They usually appoint friends and well-respected leaders as their first board. These individuals may or may not have the expertise needed to grow the organization past its first five years. They may or may not know what the fiduciary responsibilities of a nonprofit board is and how nonprofits differ from private for-profit business practices. The founder usually has forged a relationship and connection with individuals prior to inviting to them be on the board. The initial board members usually say ‘yes’ to being a member because of the reputation and prior work or relationship with the founder.
As time passes and the organization incorporates and initially organizes, board members change and the relationship between the founder and board also changes. Nonprofits differ in how involved the CEO is in selecting prospective board members. By-laws usually have a rotation principle to keep the board from becoming too ingrown and change resistant. Trust must be built and maintained by both board members and the CEO as time passes. Communication and a personal relationship with each new board member must be built and maintained. Currently, in Black Girls Code’s case strained relationships between some board members and the CEO appear to be the case that led to the CEOs suspension. Not enough time was evidently spent by board members and the CEO in forging positive, trusting relationships with each other. Unknown is what role the board gave the CEO in helping to select board members that had the expertise the CEO needed to complement her and her staff’s expertise and meet the challenges the organization faced. It is not to a board’s advantage to appoint members with whom the CEO doesn’t have a positive regard. Boards can play a vital role during rapid growth periods in providing needed expertise that helps executives and staff perform legally and with effective organizational management strategies and processes. However, it requires positive CEO/board working relationships and open communication on strengths and weaknesses at both the board and staff levels.
All leaders should ask why have a board that isn’t there to support its leaders and helps guide the functioning and direction of the organization? Yes, a board has fiduciary responsibilities independent of the CEO, but these responsibilities can’t possibly be discharged effectively without a good, positive working relationships with the CEO and executive team, and proper reporting practices that allow them to have the kinds of information needed to make informed decisions. After all, the board does not know what the daily operation is. It only knows what they are told or what opportunities they create to observe and understand daily practices, interactions, and effects. Estranged CEO/board relationship often leads to disruptions, miscommunication, and distrust.
Black Girls CODE’s IRS 990s over the past five years should have signaled to the board that the relationship between the CEO and at least some staff may be problematic. The 990s also raise several questions about financial management, accounting practices, audits, and whether the 990s were appropriately completed. What role did the board play in examining the 990s and asking serious questions? That isn’t known. Effective boards review intensely the annual 990 and ask in-depth questions about what is on the forms and what it means relative to daily operations, staff, and financial management. Given the nature of some 990s found on GuideStar, it appears the board did not require the CEO to properly complete 990s in a professional manner some years. While later years are better, there are still many questions raised by what is reported and perhaps not reported. One must ask, where was the board in understanding the basics of the organization’s leadership effectiveness, the organization’s accomplishments, impacts and effects, compensation patterns, and participating in strategic decision making on the organization’s directions?
Black Girls CODE’s failed to keep public information used by decision-makers current. Charity Navigator’s website now says, “On December 22, 2021, Forbes reported on the operations of Black Girls Code Inc., in an article titled, “Non-Profit Black Girls Code in Turmoil Over Ousted CEO.” For this reason, we have issued a Low Concern CN Advisory on Black Girls Code Inc. For more information regarding the investigation, please see the Forbes article.” This is not the kind of press CEOs, boards, or any organization want. It typically has a chilling effect on the viability and growth of an organization. It is indeed sad that its board and leadership let things get so bad that it made national news. It will take years to repair. Furthermore, the Charity Navigator highlighted that it couldn’t rate the organization because of the lack of the organization e-filing of 990s. In fact, when one looks at past 990s, it looks like they were done by the CEO for several years. Stuff is handwritten in on some blanks and the CEO is the ‘preparer’. Charity Navigator’s, Forbes’, and Business Insiders’ reviews have opened a more in-depth review of the organization’s leadership and operations by many interested parties. It’s the kind of profile no nonprofit wants to have to deal with. Such news signals to donors that something may not be quite right relative to its financial management, as is the impression I got as I reviewed the information available on GuideStar and the IRS’ Business Master File.
Black Girls CODE 2020 IRS 990 is not yet available at GuideStar. The information on GuideStar on BGC’s program and operation is sketchy. Many sections of GuideStar’s’ reporting form are blank. This is a wakeup call to all readers that what you present on GuideStar is used and does make a difference in leaders’ impressions of your work. Keep your GuideStar up to date, submit your 990 electronically, post them on GuideStar, and complete all sections of GuideStar’s reporting requirements. It does matter.
It is questionable as to how restricted or unrestricted BGC’s revenues are. Also in question is the nature, if any, of the formal working agreements that exist with sponsors. When reading the annual IRS 990s, most of the revenues reportedly came from contributions and grants. $4,234,124 is listed as ‘unrestricted’ in 2019. Since grants are always listed as ‘restricted’ on 990s, the bulk of the money must come from contributions. From whom contributions were received is unknown and large donor amounts aren’t reported on their 990s. Over $4 million is a large amount of money that is unrestricted and is questionable given the nature of 70% of their programming.
Seventy percent of their programming is in partnership with “sponsors”. These sponsors are community and corporate partners that open their doors and operations to the girls who receive hands-on training. In such circumstances, there are usually formal written agreements between the nonprofit and each sponsor that details such things as what the sponsor expects, what the nonprofit expects, what outcomes are expected, a work plan, a budget, and a procedure for each partner to grieve and seek performance corrections, if they have misgivings about what is happening. If this was the case, the money listed on the IRS990 is ‘restricted’ not unrestricted.
The CEO told one or more grieving staff to ‘do what the sponsors say’. It is unclear what the circumstances were around which this leadership direction was given. But it is highlighted as one of the major grievances staff had. If there were formal working agreements with sponsors and staff were being encouraged to negotiate on behalf of the organization, that is not standard business practice. Usually, one group or individual is appointed to oversee maintenance and adherence to formal working agreements. It is usually someone different from the CEO and the person(s) initiating or servicing the relationship with each sponsor.
Staff should know what the directions of the organization are and not be placed in a position of doing what sponsors want done without checking to see if such requests conform to the mission direction of the organization, its budget and staffing constraints, and the particulars of the formal agreement between BGC and the sponsor.
Changes in direction need to be formalized in writing and budget demands considered. Such changes need to involve those servicing the agreements, executives, and those responsible for the oversight of contractual obligations on behalf of the corporation. Telling staff to work it out with sponsors leaves staff serving two supervisors who may be, at times, at odds with the directions of their work. It appears sponsor agreements need review and perhaps tightening, and staff need to understand the contractual obligations better and the organizational procedures for seeking amendments. Staff servicing the agreements need to be given a proper forum for discussion of what changes the sponsors want and in what ways staff agree or disagree with the changes requested.
There needs to be continual review internally of contractual agreements so that staff are not re-directed from the mission of the organization without careful understanding and consideration. There needs to be a separate group of people or, at the beginning, an individual whose sole responsibility is to monitor formal agreements in much the same manner as program officers do in a foundation. Staff servicing sponsors need to be able to talk to the person appointed to seek clarity on how to handle sponsors requests for changes in work agreements. An independent person/group need to give the final sign off on amendments to contracts, grants, working contractual agreements. While the staff and CEO may be involved in determining changes to formal agreements, the independently responsible unit does the final sign off. Why? Because the organization, not individuals within it, is obligated to meet the terms, if an organizational member defaults or is rejected by the sponsor. It is the corporation that bears the penalties for default and must make good on its contractual obligations. Changes may also signal major strains or drains on the organizations budget, and staff time and efforts.
Black Girls CODE outgrew its leadership style and structure as growth occurred. It is not known why the CEO seemed to be yelling at staff, bullying them, and instilling fear, as reported in the Forbes and Business Insiders reviews. But when leaders get overworked, some have a hard time being pleasant to staff. As programmatic and operational situations become more uncontrollable and things don’t go the way they want it to, some become less sensitive to people, fail to be able to see things from another person’s perspective, and just want everyone to do what they are told. They become the overbearing parent and treat their staff like unruly children who don’t know better. There is every indication that the CEO was showing stress signs because of the rapid growth of the organization and that the board was not sensitive to looking for signs of stress and perhaps burnout. At minimum, it was time for the CEO to have serious coaching on personal interaction and communication with staff.
The public, national news on BGC’s leadership difficulties appear to have sent the board into free fall. One wonders how functional it is at this point or ever was. One wonders whether the corporation lawyer is/was playing a necessary role in handling the grievances and board communications and interactions. On the website, the same board is listed as was involved in the questionable suspension of the CEO, but no corporate officers are named. So, the public doesn’t know who the board chair is, treasurer and secretary as of February 2022. Corporate officers should be listed on their and your website. Make sure yours are. It is also unclear who the interim CEO is or whether a board member (s) is acting as CEO which given the circumstances is not advisable.
Policies on communication with the public appear to be absent which has elevated Black Girls Code’s issues nationally and make it harder to deal with the situation. Journalists have had a hay day in interviewing staff and board members about the current BGC situation. Staff and the CEO have aired their concerns nationally and publicly. One wonders what the organizations communication policies are relative to handling the press and letting everyone know about the care needed because of legal fallout that might occur in saying things about the CEO (or staff and board members) to the press. Staff and board may drift into legally actionable offenses if they aren’t careful. Usually, only one person is allowed to address requests by media outlets and its not persons associated with the formal grievances. What is your organization’s media policies, particularly those dealing with your grievance processes, personnel actions, and emergency situations?
Black Girls CODE Board’s leadership structure is questionable and dysfunctional. In one release, the chair of the Board committee charged with examining staff grievances reportedly was a board member and someone else was the board chair. In another release, the chair of the committee was referenced as the interim board chair. Did the board chair resign over the way grievances against the CEO were handled? In addition, one member of the board immediately sought legal counsel and had her lawyer represent her at all relevant meetings. This indicates she was aware that what was done was not appropriate or handled correctly. So, the board leadership and inter-board relationships were in flux as they tried to handle growing staff grievances. The board apparently was not in agreement with what was done. It appears some board members were told after the fact of the suspension of the CEO. All this is inappropriate board practice. it signals a major breach of fiduciary responsibilities, proper board functioning, and a lack of understanding under what conditions the board is acting together which is required legally.
Board members did not seem to understand what constituted legal board actions. Clearly, the committee acting to suspend the CEO BEFORE taking their findings and recommendations to the full board and the full board voting on recommended actions is in violation of nonprofit law. This is a violation of all states’ laws on nonprofit conduct and is a violation of the fiduciary responsibilities of the board. Individuals and groups within a board cannot act as the official decision-making body. It takes a full board vote and decision. No suspension should have been executed until a full board vote occurred. And the way the CEO was notified lacks treating the CEO with dignity, respect and humanity.
However, most know that when grievances are left unaddressed internally that executives, staff, and board members often circumvent trying to handle things internal to the organization and grieve in social media, the press, to community leaders, or government officials perceived to have some oversight on nonprofits. No reader should assume they can keep a lid on grievances that go unaddressed for long periods and are not addressed appropriately or are questionable legally. No reader should assume that grieving staff will not go outside the organization to get a fair, just hearing. Most state’s nonprofit laws make it clear that because a nonprofit is a public institution that the members have a right to grieve beyond the nonprofit to the state. Some laws spell out mediation or arbitration processes and procedures that are to be used by grieving nonprofit staff and board members.
Board/CEO interactions over the years did not serve well the organization’s rapid growth and the strains a CEO faces in adjusting to that growth. For any organization’s leadership, rapid growth is an operational, organizational, and leadership challenge. Strong executive team and board leadership is required during times of growth. They must work in support of each other to keep up with the demands of such change. Boards that try to drift and are disengaged during such periods do not effectively service the organization or its leaders. They are not only dysfunctional but also useless and a source of organizational trouble.
Board composition becomes extremely important during times of rapid growth so that the organization keeps up with the demands present without CEO burnout. There will be operational periods when staff expertise is absent. Board expertise is needed to supplement staff expertise. The composition of the Black Girls Code’s board of directors should have been sufficient to help the CEO move through the rapid growth experienced, if the CEO made her concerns known to the board and sought their help. The board must be willing to give of themselves during such periods rather than coasting and seeing their role only as showing up for required meetings which usually are too few and too short to really grapple with the challenge rapid growth presents. The CEO must be willing to seek the advice from her board when challenges arise. The board must have the expertise to help fill the gap until such time as staff can be hired or contract help can be purchased. Prospective board members, before appointment, need to be asked what they think their role on the board is and whether they are willing to lend a hand during times of rapid growth. More is expected and required of a board during times of rapid growth.
Staff engagement in decision-making did not meet staff expectations which led to grievances. Staff wanted more say in budget and strategic directions of the organization. They wanted more authority and control of budgeted revenues related to their work. (See NANOE’s Guideline on System Shock and Strong CEOs.) Budget discussions need to focus on the need of staff to handle expanded programmatic and organizational demands. No board member or CEO can know what the budgetary demands are of frontline workers unless they are involved in budgeting processes. Some of the grievances related to staff feeling like programming changes were needed and the CEO being unwilling (or unable because of agreements with sponsors?) to make the changes. There evidently was not appropriate procedures in place for BGC/sponsor amendments to formal agreements about what was to be done in each sponsor’s workplace. Or staff were not shown the formal agreements reached and had inadequate opportunities to address the need for changes.
Changes in leadership structures and organization, stronger involvement of the board working with executives and staff to determine strategic directions, and strengthening its financial management and development strategies, policies, and processes were apparently needed.
Staff expectations did not match how they wanted to be treated by the organization’s leadership. The sheer increase in revenues would create expectations among staff about what should be present in the organization, operations, and programs. Younger staff will expect greater participation in decision making about the directions of the organization. Younger staff will expect to be able to share authority and control over budget, programmatic, and operational decisions that affect their work. Staff engagement and productivity levels are directly affected by the degree to which executive leaders can share control and authority over what happens in the workplace.
It is not surprising that the CEO ran into issues with financial, staff, program and operational management, and the appropriate delegation of authority and control. It appears the organization did not add enough staff of the right kinds to handle the issues that arose. It also appears, given the nature of staff grievances, that the CEO found it difficult to move from total control and authority over the organization to a delegated, shared leadership style.
Performance reviews were missing at the executive and board level. Whoever completed the GuideStar report indicated that the Board had not reviewed the CEO’s performance during the past year (as reported in 2/25/2022) and that the Board had not conducted a self-assessment of its own performance. How many years this has been the case is not known but strategic opportunities were missed in not conducting such self-assessments which ultimately lead them into trouble. What was a small, tightly controlled operation in 2018 basically lead and controlled by one person (CEO/founder) five years ago was quite different by 2022? Apparently, neither board nor staff kept up with the rapid growth of the organization and didn’t pay attention to the signs present that issues needed to be addressed.
Performance review periods allow staff, executives, and board to talk about their vision for the organization, their needs, their goals, their work plan, areas where they need help, etc. Without taking time to do this, the organization is minus any meaningful, legitimate benchmarks by which to judge performance and make strategic decisions about mission accomplishment.
Black Girls CODE appears to have too few staff with appropriate experience and expertise to handle the size of their operation. In 2019 there were reportedly only a total of 12 staff members, including the CEO, according to the 2019 IRS 990. Their current website indicates there are 17 staff members. Elsewhere, I indicated that as early as 2018, the VP of Programs position was turning over annually. Interestingly, a yet new VP of Programs appointed in 2020 is now not listed by 2022. No VP of programs is listed on their current website, just curriculum specialists and program directors. Let’s hope they are coordinating and communicating with each other, or the organization’s missions will drift significantly. In 2019, they operated with largely a volunteer staff, reportedly 1,223 volunteers. That is a very small staff for a nonprofit with a reported $4,595,075 revenues and a large volunteer staff operation spread across the entire USA. The kinds and numbers of reported paid staff appear to be off the mark for the growth that was occurring.
Black Girls Code started establishing chapters in various locations across the USA and one in South Africa. There is no indication of the formal relationships between BGC and these chapters but that is yet another financial, management and leadership challenge, and demands dedicating leadership to oversee and grow that aspect of the organization. It also usually requires legal help in forging effective working agreements with each chapter.
Black Girls CODE is about to go through yet another even more demanding programmatic, operational, and organizational growth spurt. Their current website says that they have received recently well over $45 million in new funds. That is going to create enormous leadership, operations, and organizational development challenges, in addition to the ones the organization has not successfully handled so far. The organization doesn’t appear (on paper) to be able to handle that size budget and its demands without a major overhaul.
Black Girls CODE corporate viability is in question. Given the way in which the current CEO was treated by the board and the CEO’s enormous ability to raise funds combined with her national reputation, it will be interesting to see what the organization and CEO do next. If the funds are largely dependent on the current CEO’s credibility and promises, BGC as an organization may well disappear, or become a chapter, and sponsors may move to whatever organization the CEO decides to do to incorporate a rival. This is a critical period for BGC as an organization. If it survives and in what form may well depend on how effective the BGC board and lawyer(s) are in handling the current grievances.
There was an apparent lack of well qualified, experienced operational staff at executive levels until recently (i.e., VP of Operations; Financial Management staff at executive levels; human resources personnel at the executive level; Volunteer Coordinator at the Executive level). The current website indicates staff positions are in some of these operational areas, but they may be new staff and do not appear to be at executive team levels. Let’s hope they are experienced staff because the challenges they face are enormous.
The IRS 990s over the past five years tell a story of an apparent problem with retaining a VP of Programs. Turnover occurred in 2018 and again in 2020, another is references in the Business Insider review, and currently on their website in 2022 no one is listed. This critical staff turnover did not provide the leadership needed during a major time of rapid organizational and financial growth. The reasons why the VP of Program hires kept leaving is unknown but may signal that the founder/CEO was unable to make the change of leading with total control and authority of a small organization to a shared leadership style with much greater delegation of authority and control. It may also signal that staff (and board?) were not involved in strategic planning. Thus, some of the staff grievances regarding program impacts, lack of measurement of outcomes, lack of adjustment of programs to meet current realities may be due to not being able to keep a VP of program for any length of time. It may also signal that the VP of Program was not allowed to do their job without being over-ridden by the CEO. A disgruntled program executive can spark grievances among staff under their direction. With the size budget BGC is projected to have in 2022, it needs an executive level position as VP of Programs. It needs a VP of Operations as well and the financial manager needs a unit that concentrates on all aspects of the organization’s assets and revenues.
Are equitable compensation policies in place? A clear understanding of staff compensation is not apparent from the IRS 990s. Depending on what staff knew about the budget and how they were treated, and whether it was perceived as equitable is in question. For example, between 2018 and 2019 the CEO’s salary went from $147,393 with no added compensation to $199,852 with $36,988 in bonus pay, and an addition $18,719 in nontaxed benefits in 2019 (a total compensation package of $255,559. This is a huge jump in one year. That is a very handsome salary in any sector! And, given the grievances going on during that period, may have been unwarranted. The involvement of the board in setting salaries is unclear, although one 990 indicates they set salaries based on nonprofit compensation reports and a review of other nonprofits.
Meanwhile, the director of programs on the East coast salary went from $115,000 with no other compensation in 2018 to $117,050 with $10,141 in other compensation (a total of $127,191) in 2019. A much more modest increase. The new VP of programs (different from the one reported in 2018) was making only $104,036 with no other compensation and is listed as leaving in Dec 2020. Given the size of the organization and revenues at that point, the VP of Program was underpaid, or the VP chosen was not at the right experience and expertise levels. Therefore, the board was seeing turnovers even among its senior VP of Program staff from 2018 on. The board was seeing inequities in salary and compensations. Compensation profiles seem unusual and irregular, although they say they are setting compensation after review of comparable nonprofit compensation reports. No other staff member is listed on 990s as receiving over $100,000 a year.
A reported $1,505,176 was spent on ‘other staff salaries’ in 2019 besides the three executive leaders listed. Excluding the CEO, VP of Programs and Director of Programs East Coast that leaves 9 people or an average of $167,241/each in compensation. So, something may be off in their reporting on the IRS 990 or other compensation issues might be present.
At the board level, inadequate attention was given to tracking and understanding grievances and their resolve that were occurring in the workplace. Did the board know about such grievances and ignore them? What kinds of discussion occurred between the board and CEO on grievances annually? Was the CEO required to let the board know of the number and kinds of grievances that occurred each year? Many questions could be asked about how grievances were handled. The case of BGC as reported by the Business Insider indicates that five staff members submitted complaints and grievances against the CEO. If the total staff was only 12, as reported in 2019, and three were members of executive team, then that’s only 9 remaining staff members. It may be that over 50% of staff had submitted grievances about their CEO! And that doesn’t include the VP of Programs turnover issues. The board had signs starting as early as 2018 and perhaps before that something was not right relative to staff retention and turnover.
The 990 for 2019 reports they had a grievance policy, but one wonders what that policy was. Did the policy include a procedure for when staff have a grievance with the CEO? Usually, there is an avenue for the board to mediate grievances that are between senior staff and the CEO. Usually, the policy covers delegation of grievances to a third party such as someone who acts as the human resources director, or an external mediator is hired. Rarely is the CEO given the right to meet face-to-face with those who have a grievance with them without a mediator or arbitrator managing the sessions. Why? Because the CEO has more positional power than staff and some staff will perceive face-to-face meetings as a form of bullying and further intimidation. Some will feel that meeting face-to-face with those they grieve against minus any person or body that has power over the CEO to correct the situation means the organization does not plan to treat them equitably.
Apparently, the CEO’s communication style was not conducive to establishing a good relationship with most of her staff. The qualities of effective leadership as outlined in two of NANOE Guidelines (i.e., The Strong CEO and Network and Engage) may not have been present in this case.
The board was insensitive to just how well-known nationally the CEO was and how much national press would occur because of the way they handled performance corrections and review. The board’s perceived power over the organization was not balanced realistically with the CEO’s reputational power. They appear to have greatly underestimated how public the issues in the organization would be. The board members lack of understanding of how to act as a fiduciary agent. That led some members of the board to act inappropriately and assume they could act and speak on behalf of the corporation. A right they did not legally have. Treating a CEO known nationally and honored nationally in the manner chosen shows a blatant disregard for conducting appropriate executive reviews, providing times for performance corrections, seeking the consultation and review from the corporate lawyer, and addressing grieving staff so they understood their concerns were being listened to and addressed responsibility and legally.
Whatever happens next, the entire board needs professional enrichment of proper, legal board management. The CEO and staff need additional coaching. The board was dysfunctional at a critical juncture in BGC’s growth. The CEO needs help in learning to share decision-making and communicating effectively with staff. The organization needs experienced, capable leaders in strategic senior positions to help get organized and functioning in positive ways as perceived by clients, sponsors, staff, and executives. By 2023, BGC could be well over a $50 million operation, placing it in the top 1% of nonprofits in the USA. Their mission is vital and needed. Let’s hope at both the senior staff, executive, and board levels, the kinds of coaching and enrichment needed to get the operations and organization in shape occur to meet the challenges that may well be present in the next five years of their growth. With this size budget, they will receive a great deal of external scrutiny from many sectors.
This case is instructive of what can happen to a nonprofit, its executive leadership, and staff during times of rapid expansion. If they had followed the guidelines found in NANOE’S Guidelines series, what occurred would not have happened. Readers, as you expand, don’t forget to develop the organization, not just programs. Don’t forget to ask for help and share with the appropriate group, the areas where you need help. Get a coach that will help you remain sensitive to the perspectives and needs of your staff. If needed, ask for help in learning to communicate with staff. If you’re task-oriented, your communication and people interaction skills may need work. Talk about how much authority and control people want over their work. Involve staff in budget formation and strategic planning. Treat everyone in the organization with dignity and respect. Treat them as adults not children, regardless of age differences. Provide many ways in which everyone at all levels can evaluate their own performance and seek the help and support needed from each other to do their job effectively and contribute to a clear corporate sense of mission and direction. Put into place proper grievance procedures and follow them. Create boards that are attentive and willing to share vital expertise that can’t be provided at the staff level. Create and maintain good board/CEO relationships. Involve the CEO in selection of board member they can work with, and that address expertise needed for organizational development. Evaluate the outcomes of the organization and individual programs on, at least, an annual basis, if not having a dashboard to track in real time major outcome indicators for operations and programs. Make sure outcomes are known and measured. Review National Association of Nonprofit Organizations & Executives’ New Guidelines for Nonprofits that grow and go to scale effectively to avoid the issues BGC faces.
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