August 30, 2018; Daily Times
The ousting of the top executive from a small United Way in Wicomico County, Maryland might not seem newsworthy beyond the pages of local newspapers and television affiliates, but for anyone who has made an investment in a nonprofit organization, be it as staff or volunteer, the story likely generates a mixture of strong emotions.
The split in question—between Salisbury-based United Way of Lower Eastern Shore (UWLES) and its long-serving CEO, Kathleen Momme—is filled with reminders about the uniqueness of the nonprofit world. When a CEO departs a nonprofit, there’s no ownership stake, no shares, and with rare exceptions, no golden handshake that stays with them. No matter how long or how important their service, the minute it’s over, it’s over. When investing and becoming attached to a cause through a nonprofit career, something frequently cited as one of the main attractions of the job, the fear of losing that connection is going to result in significant personal and professional hardship. In being dismissed by the UWLES board, Kathleen Momme described this as “painfully heartbreaking.”
Of course, these feelings apply not only to paid staff, but also to volunteers, including the peculiar arrangement that is the nonprofit board of directors: People who typically meet for a couple of hours a month and are fully accountable for a broad range of fiduciary responsibilities, not to mention mission-oriented imperatives (and how they come together with financial planning) to ensure appropriate service to many stakeholders.
The board-CEO relationship has tension built right in, fueling a robust consulting industry in the world of nonprofit governance. The chief executive oversees the daily operations and decisions, but the board, collectively, is the boss, reliant to at least to some degree on the CEO for acquiring facts and evidence about the organization’s performance. This unique CEO-board dichotomy and the importance of a healthy leadership team cannot be underestimated.
With statements now in the public domain—and Momme and the board of directors offering distinctly different versions of events and assignment of blame—there are a myriad of obvious lessons to be learned. First and foremost, given both the CEO and the board obviously care about their United Way, the causes it supports, and some 80,000 individuals in their community impacted or potentially impacted by this split (for example, donors going elsewhere), they should have worked harder to avoid a public spat. The board did attempt (through the legalese of a General Release and Covenant Not to Sue) to manage the possibility of Momme discussing her dismissal in public forums, but clearly this only served to fuel rather than defuse the tensions associated with the relationship wreckage.
The board chose to take the path of a separation agreement, rather than an exit agreement.
The principal motivation to negotiate a separation agreement and release is the desire to reduce the likelihood of a legal claim against the nonprofit, whereas the motivation to negotiate an exit agreement is to reward a founding or long-term executive and ensure a fair and appropriate ending to a long-term employment relationship.
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Taking the latter perspective might not have proved successful, but the downside to attempting it seems limited, especially when the upside is eliminating the public displays of anger that got the media talking about the United Way of Lower Eastern Shore in ways that clearly don’t evoke public confidence.
Momme choosing to describe the board’s proposal as a “payoff…in exchange for my silence” is certainly unfortunate if not extreme—it’s a common separation practice—and for her part, she would likely have done better for herself, the UWLES, and her community to take some time to reflect before releasing a public statement.
Momme’s dismissal is clearly related (as acknowledged by both parties) to issues with staff, including four out of nine staff members having left their jobs in the spring of 2018. A board that did not take such a circumstance seriously would be derelict in their duties. That’s not an issue that any board can ignore—a healthy work environment is a fundamental duty of care.
Momme does herself no favors, and perhaps provides a peek into the core of the problem, when she writes in a public letter that she is older than the other staff and her “more traditional notions of hard work and accountability perhaps were inconsistent with the expectations and work-related objectives of a new generation of employees.” This kind of belief system almost never remains hidden and often is repaid with a less-than-enthusiastic sense of engagement. She then went on to include the board in the same characterization.
It is widely agreed that a board should not interfere in the daily management of staff by the CEO, but that doesn’t mean that the board’s relationship with the CEO should not involve performance measurement that considers recruitment, retention, and professional development of staff. How to go about this is always a topic for debate, but without having such a process in place, we get the likes of a UWLES scenario: A dismissed CEO claims to have “communicated with staff openly, honestly, and constructively,” while the board hired a consultant to investigate staff complaints, the findings of which led directly to her termination.
If mass staff departures are the first clue that something is seriously amiss with the workplace culture, that is a collective failure of leadership—CEO and board together.
Reasonable people in the nonprofit community may look at this story and consider themselves above the fray, but they would do well to consider that this is a 75-year-old organization with an elected board of community leaders and an ex-CEO with 24 years of documented and celebrated positive results.—Keenan Wellar