There are many reasons boards find it challenging to set goals for the Chief Executive Officer/Executive Director. The board may not be familiar or understand all the nuances of running a nonprofit organization. Although the CEO reports to the board, the board isn’t usually on-site to see the day-to-day operations or the CEO’s daily functions. Even though it can be difficult, setting annual goals for the CEO is a necessary and important board responsibility.
The first and perhaps most important consideration when defining the CEO’s goals is to ensure they are tied to the organization’s vision and mission. As the CEO, their primary objective is to help to advance the mission of the organization. Often boards set goals concentrated on activities or strategies, but it is important to remember the activity is a means to an end. The focus should be more on the outcome of the activities and the impact it had on successful fulfillment of the mission.
What this means is to measure the CEO’s performance, boards need to develop goals that get results.
In many small organizations, the CEO wears many hats and takes on many responsibilities. However, not all those tasks should be the CEO’s responsibility. This is an important consideration when developing CEO goals. It should be recognized that some tasks and strategies need to be completed by others for the CEO to accomplish their goals. If nothing is getting done by staff or volunteers, then perhaps leadership development is needed for the CEO.
As part of the work in setting goals for the CEO, a proactive board will also scan the landscape to identify challenges and obstacles that may be on the horizon for the CEO and or the organization. As part of this process, the board then needs to implement specific strategies to support the CEO to ensure their success.
Clearly explain the goals and expectations to the CEO, as well as the goal achievement timeline. Too often boards set goals but fail to provide a tangible way to measure progress. Most of us know all too well that what gets measured gets done. For large goals, provide benchmarks along the way to help both the board and the CEO see the progress that is being made.
Establishing annual goals provides the board with an objective way to measure the work of the CEO. Using a clear, objective process will also make performance evaluation time significantly easier. Bottom line is having goals tied to the mission and vision of the organization helps ensure the organization is moving forward toward its strategic goals.