Board Members, Not Headhunters, Deserve Blame for Timid Hiring Practices

To the Editor:

Your stories about executive searches at foundations (“Inside the Searches for Filling Philanthropy’s Biggest Jobs” and “Increasing Clout of Recruiters Stirs Debate Among Philanthropy Experts,” April 7) included comments from critics who express concern that the influence of search firms results in the selection of foundation CEO’s who are not daring, lack diversity, are not edgy or unusual, lack grant-making experience, and are disproportionately from outside the foundation world.

But complaints about foundation CEO selection should really be directed at trustee boards, not search firms.

Trustee boards appoint individuals they believe possess the skills and experience to find the right CEO. Search committees are charged with collecting input from foundation constituencies, assessing their relative importance, and developing a profile of the kind of CEO sought.

Search committees decide whether to solicit candidates themselves or hire a search firm capable of recruiting CEO candidates with the desired characteristics.

Search committees can reject unsatisfactory candidates submitted by search firms. They can redirect a search firm toward more suitable candidates and terminate the services of firms that fail. Search firms thrive by satisfying CEO search committees and trustee boards. Dissatisfied clients will not use firms that repeatedly perform poorly.

It is fair to conclude that foundation trustees hire CEO’s they want and are proud to stand behind. Hiring a CEO is one of the most significant governance responsibilities of any board. Purposely hiring CEO’s who do not meet the best long-term interests of a given foundation due to search-firm influence is a major leadership and governance failure.

Trustees drive the CEO-selection process. Trustee boards that want future CEO candidates to have grant-making experience or be more racially and ethnically diverse would require CEO’s to implement succession planning, recruiting, and talent-development initiatives that create talent pipelines to match future CEO needs. Search committees can hire and direct search firms to seek candidates who are “bold,” “edgy,” or possess any unusual combination of characteristics, experiences, and skills desired by the board.

The core question is whether trustee boards, search committees, and critics of the process can discuss their differences in a manner that results in better CEO selections.

CEO’s have a significant impact on the ability of their foundations and society to face the most challenging problems. We all benefit when trustee boards, their constituencies, and their critics work together to improve measurement of CEO performance; identify characteristics, competencies, and experiences that contribute to successful performance; and build recruiting and development processes that result in selection of the best candidates.

If strategies can be implemented to improve the quality of foundation CEO selection and increase foundation capacity to address the world’s problems, now is the time to act. The world cannot afford to wait.

Michael Watson
Senior Vice Presidentfor Human Resources and Diversity
Girl Scouts of the USA
New York

To the Editor:

The points of view expressed in your articles on recruiters avoid the elephant in the room. The impulse to blame recruiters for limiting “the kinds of candidates that boards are exposed to” and to blame boards for “long and unrealistic lists” of candidate requirements both stem from the frustration of finding skilled, visionary, and passionate leadership for nonprofit organizations in these changing times.

In our experience, many boards turn to recruiters because board members don’t believe that they will find enough talent within their field of service, and therefore, they seek to utilize the recruiter’s creativity and outreach ability in order to find prospective leaders with relevant skills from other nonprofit fields, government, and business.

As recruiters in the nonprofit sector, we are responsible for finding the best talent for our clients, and are often the ones who push boards to think more broadly about leadership by introducing them to prospective candidates with backgrounds they had not previously considered.

The real issue is not about whom or how we recruit. It is about who is available to recruit and what the sector has—or has not—done to develop a pipeline of professional leaders. Recruiters and search committees only recruit from pools of interested and appropriately skilled talent. If those pools don’t have enough talent for today’s leadership challenges, then who will assume the responsibility for doing something about it?

No one is paying enough attention to building the pipeline of leaders for the near future. We must do more to provide programs to prepare mid-managers for executive roles, develop meaningful executive programs for career changers, and think together creatively about how we can do more to attract and keep the “best and brightest” engaged and employed in the nonprofit sector.

David Edell
President
DRG Executive Search
New York

Fraud at Nonprofits: ‘Widespread’ After All

To the Editor:

Leslie Lenkowsky’s opinion (“Despite High-Profile ‘Three Cups’ Controversy, Nonprofit Fraud Isn’t Widespread,” May 5) does not comport with the empirical evidence I have seen in over five years of collecting data about fraud for Nonprofit Imperative, a twice-monthly newsletter.

While there may be some softness to various studies about charity fraud, one cannot come to the conclusion that it is not widespread. It is omnipresent and continues to grow at a spectacular rate.

A significant jump in charitable theft can best be illustrated in just the last two years. In 2009, we saw a 50-percent rise in the amount of money stolen over the previous year.

In 2010, data showed that that trend line has not subsided, with an additional 25-percent increase to over $2-billion; and that represents only between 5- to 10-percent of all fraud, according to several members of the Association of Certified Fraud Examiners who reviewed our data collection. Most fraud is not made public and is buried in the boardroom or the executive suite, an insurance payout, repayment with no prosecution, etc. With only 25-percent of this year gone, it appears that the charitable sector will have another record-breaking year.

While $2-billion may not seem like much money given that assets in charitable coffers are over trillion dollars, it is big money to the thousands of charities and donors that are affected annually.

But an important point is missing in Mr. Lenkowsky’s article. No matter how many dollars are lost or what percentage of charities face fraud, a tremendous problem exists and it continues. Charitable fraud is having a corrosive effect on the sector.

Leaders of the sector and the media prefer to focus more on tractable, but important, issues such as charitable giving or volunteerism. Most are dismissive of the notion that charitable fraud is important and the staggering dimensions of the problem.

With no one watching the sector’s money, the issue of fraud, misappropriation, malfeasance, and mismanagement is not lost on the public, and as the practice widens it will discourage investments in the sector that are so desperately needed.

So as most shrug off charity corruption as not widespread and a topic that is hard to talk about, the sector is missing a grave warning. Until there is a full-blown discussion about its insidious nature, or at least some acknowledgment of the problem, it will continue unabated as it has over the past decade.

Gary Snyder
Publisher
Nonprofit Imperative
West Bloomfield, Mich.

Leadership ‘an Ethos’ and Not Just Skills

To the Editor:

Pablo Eisenberg’s essay “Real Leadership Doesn’t Develop in Classrooms” (Opinion, April 21) raises the important issue of identifying and supporting new leadership models to tackle the challenges of the 21st century.

We agree that the best leadership development takes place outside the boundaries of a classroom, especially those programs that engage young people in real-world community problem-solving. Developed at the turn of the 20th century by John Dewey, that approach has since been embraced by scores of educators who recognize the importance of experiential learning, reflection, and sociopolitical context in education.

Despite its popularity with many educators, however, the approach has yet to be widely accepted as a framework for leadership education. Today, the prevalent view of a leader is still of a charismatic “great man” who will show us “the way.”

The world, however, is rapidly changing, meaning that new approaches to leadership are not only warranted but required. Recent years have seen dramatic cultural shifts driven by technology, globalism, and new generations with different ideas about work and “success.”

In fact, young people—who have grown up with technology (and are comfortable with its emphasis on transparency, collaboration, and results)—are taking the lead in calling for new approaches to leadership.

A poll by Peter D. Hart Research Associates, for instance, found that 65 percent of millennials (those born after 1982) saw ordinary people as being better equipped to solve social problems than authority figures or experts. Millennials are also more likely to have ambivalent, even negative, feelings about formal leadership, preferring horizontal arrangements in which everyone is a leader, according to another study by the Girls Scouts of the USA.

And they want leadership education to reflect that notion. At a recent McCormick Foundation-supported symposium on leadership education, a diverse group of students from some of the top leadership programs in the country called for curricula that move from a focus on making money, public speaking, and deal-making to helping young people incorporate the public purposes of leadership, including civic engagement and real-world problem-solving.

Auspiciously, a small but growing number of programs in colleges and universities reflect these trends, with many offering curricula focused on the civic aspects of leadership—including service, community problem-solving, and activism—with a larger framework of leadership education that stresses relationships over position and action over attainment. We believe these kinds of efforts deserve more attention and, thus, have attempted to document some of the best in the country in From Command to Community: A New Approach to Leadership Education in Colleges and Universities (Tufts University Press, 2011).

Today’s definition of leadership education is not just a set of programs, courses, or skills; it is an ethos that many believe should extend across disciplines, departments, and individuals to permeate the way in which entire institutions function. That ethos is one that values the transparency, authenticity, collaboration, action, and interactivity that are becoming the hallmark of a new global society—one that young people are embracing and one with which older, more traditional institutions are grappling.

Given the historic and important role that colleges and universities play (and have played) in educating millions of young people, as well as the civic mission on which many of these institutions were built, we believe they are not only well positioned to play a critical role in that process, they have an obligation to do so.

Anything less risks alienating a whole generation of young people who are eager and able to work for the common good today as part of their education, and in the process become more prepared to serve as the leaders of tomorrow.

Cynthia M. Gibson
Senior Vice President
The Philanthropic Initiative
Boston

Nicholas V. Longo
Associate Professor of Public and Community Service Studies
Providence College
Providence, R.I.