Two Questions NPR’s Board Should Ask

The forced resignation of Vivian Schiller as NPR’s chief executive offers a sobering case study for nonprofit-board watchers everywhere and raises at least two questions that should be asked more often by every nonprofit board.

In light of the potential problems outlined in my post “When Executive Directors Disappear,” there’s much to be praised in the way NPR’s board handled Ms. Schiller’s departure.

The board acted quickly and openly in asking for her resignation following the release of a covertly videotaped meeting in which NPR’s senior fund-raising executive made damaging and inappropriate comments.

The board then issued a relatively gracious statement acknowledging Ms. Schiller’s contributions and expressing “genuine regret” over her departure. NPR had an emergency succession plan in place to help smooth the transition and ensure continuity of leadership.

Beneath the surface, however, the episode raises at least two fundamental questions about NPR’s mission and governance—questions that all nonprofit boards should consider as the organizations they lead grow and change over time.

Question 1: Are we clear about our mission?

The question may seem overly basic, but almost every nonprofit has competing elements within its mission and faces choices about what is most important when difficulties arise. For example, an organization that provides government-funded social services and also seeks to influence public policy may at times find those two functions incompatible, forcing the board to make hard decisions.

In the case of NPR, the organization’s mission statement reflects at least two competing elements. NPR accomplishes its mission by producing and distributing “programming that meets the highest standards of public service in journalism and cultural expression.” But NPR also represents its members “in matters of their mutual interest.”

One of the most significant matters of mutual interest for NPR’s 268 member organizations (which operate more than 750 radio stations) is federal government support for the Corporation for Public Broadcasting, which passes federal money on to public television and radio stations. In 2010 the corporation made grants of more than $65-million to support local NPR stations and another $28.5-million to support public radio programs. NPR itself receives very little direct government support.

If one of NPR’s jobs is to keep federal government support flowing to local member radio stations, the most recent scandal could not have come at a worse time.

NPR’s October 2010 firing of the news analyst Juan Williams over remarks made on Fox News had already led many political conservatives to renew longstanding allegations of liberal bias at NPR.

And Republicans in Congress, many of whom were elected with Tea Party support, were already calling for the total elimination of government funding for public broadcasting. A sting video showing NPR’s top fund raiser describing the Tea Party as racist and xenophobic and suggesting that NPR would be better off without government money weakened the position of public-radio advocates at a critical moment.

Both incidents were unfortunate. But if they had not unfolded in an atmosphere of growing uncertainty over the future of government support for public broadcasting, would they have reached such seismic proportions?

In most nonprofit organizations, management’s lawful termination of an employee’s contract, or poorly chosen private remarks by a senior executive who promptly resigned, would not be considered grounds for dismissing a chief executive who was otherwise doing an good job.

By asking for Ms. Schiller’s resignation, the board may inadvertently have given credence to the allegations of NPR’s critics by implying that the organization’s problems run deeper than an isolated incident and the bad judgment of one or two employees.

NPR’s board may also have created the impression that with $100-million in federal funding for member stations hanging in the balance, it is unwilling to stand behind its chief executive or defend the editorial integrity of NPR’s news operations.

Any board’s response to crisis should be grounded in a basic question: What actions will best serve the organization’s mission? To answer that question, the board needs to have a clear shared understanding of the mission and be prepared to make hard choices when aspects of the mission are in obvious conflict.

Question 2: Given our mission, do we have the right board?

Almost all nonprofits evolve over time. Missions shift and community needs change. Organizations grow in size and complexity. As organizations evolve, the role of the board and the skill sets and perspectives needed from board members also change.

Over the past 40 years, NPR has grown from a scrappy experimental start-up to a major international news organization. It has 18 foreign news bureaus—more than any other major broadcast network. At a time when the audience for daily newspapers and traditional network news is dwindling, NPR’s audience continues to grow.

NPR is, of course, more than a news operation. It is a membership association of public-radio stations, a producer of cultural programming, and a provider of satellite services to the entire public radio system. Its members are also its customers and its suppliers. In a nonprofit world that is full of complex organizations, NPR stands out as unusually complicated, and its governing structure reflects that complexity.

NPR’s 17-member board of directors includes the presidents or senior executives of 10 NPR member stations, the president of NPR, the chair of the NPR Foundation (the organization’s fund-raising arm), and five “public” members—prominent individuals elected by the board and confirmed by NPR’s member stations.

The fact that a majority of board members are representatives of member stations is significant given the dual nature of NPR’s mission —serving the interests of member stations and running a world-class news operation.

The governance problem arises when the interests of NPR and its member stations are in conflict, which is likely to happen increasingly often in the future.

As an example, NPR no longer relies exclusively on its member stations to reach its audience. Through a robust Web site, satellite radio, and podcasts, listeners can now get news and programming directly from NPR—which is good for NPR and its listeners but not necessarily beneficial for its member stations.

Another example of conflicting interests, this one directly related to the events that led to Ms. Schiller’s resignation, is federal funding. The overwhelming majority of federal funds for public radio go to local stations. If federal support is eliminated, the big losers will be member stations—whose leaders dominate the NPR board.

NPR’s current board structure suggests that when the interests of member stations are in conflict with those of the national organization and brand, member stations will prevail. And since continued federal funding is such an important issue for member stations, under the current organizational structure, it will continue to be an important issue for NPR.

This may not ultimately serve the best interests of NPR or its member stations.

NPR is now, among other things, a major international news organization.

As such, might it be better governed by a board whose members had less obvious conflicts of interest and were recruited specifically for the skill sets needed to oversee a such a complex enterprise? A board that could objectively consider whether it would indeed be better off without government funding, separate from the larger question of government funding for public radio?

For that matter, public radio stations might find it easier to make the case for continued government support without NPR as a constant lightning rod.

Doesn’t NPR also need a board that can circle the wagons and take a stand to defend the integrity of its product, regardless of threats to funding? Under its current board structure, that seems unlikely.

For outsiders, it’s impossible to know exactly what goes on in nonprofit board rooms or to understand all the issues that contribute to an executive’s departure, and these questions are not intended to second-guess the recent actions of NPR’s board.

But all nonprofit organizations need different boards at different stages of their growth and development and need clarity about their missions. Failure to answer these questions head-on leads to organizations that are hard to govern and difficult to lead.

Just ask Vivian Schiller.