Board Roles in For Profit Vs Nonprofit’s

According to a new book by John Gillespie and David Zweig,  “Money for Nothing: How the Failure of Corporate Boards Is Ruining American Business and Costing Us Trillions “No one can reasonably expect a person to oversee himself or herself,”
the authors say. “The C.E.O. works for the board, not the other way
around; the continuation of combined roles inhibits the board in
exercising its responsibilities because it creates an insurmountable
imbalance of power,” they write. In their view, "underworked, overpaid corporate boards are doing serious harm to
the shareholders of public companies and the economy as a whole.

We know that there are massive failures on the part of corporate boards…do you think we have the same failures on the part of boards of not for profit senior living providers? I would say yes. One example: Recent bankruptcy of Erickson Retirement Communities. Were these board members simply "rubber stamps" for whatever John Erickson and his team wanted to do?

Leaving a good legacy

Of all the responsibilities of a board of directors, none has a more
dramatic effect on the organization’s success or failure than
succession planning for the CEO position.

Achieving
financial stability, initiating creative programs and creating a
culture of integrity and accountability are directly tied to the
leadership of the CEO.

Roughly
one-third of the top CEOs in the AAHSA Ziegler 100 will be at
retirement age in the next three to five years, according to studies by
the Rodeghero Consulting Group.

Research by Jim
Collins in How the Mighty Fall indicates that in companies that made
the leap from good to great, 90% of the CEOs came from inside.

On the other hand, two-thirds of the CEOs hired from outside failed to make the same leap….Click here to read more about developing a succession plan

Its all about the revenue

In these days of financial stress, where should you place your
organization’s focus? Should it be on cutting costs or maximizing
revenues? I would propose focusing on the revenue side: census, census,
census. Satisfied clients equal high census, and high census means
revenue!

A common issue I hear boards raising is this:

 “We need to know how our costs compare to other, similar organizations.”

The
thinking is that if only we can cut costs a little more, we will be
able to survive the downturn. Well, that’s not going to do it. Yes,
look at every expense, but in most cases, you simply cannot save your
way into success….Click here for the full article

Give Boards an F

I recently obtained the copy  of a sales contract of a not for profit nursing home to a for profit company. The sale price of the 58 bed nursing home with 20 apartments sold for less than $50k.

For more than 30 years, this organization had been serving the elderly of the community. They were full and enjoyed a good reputation.

I met with the board about two years ago. They were in dire financial straits with less than enough cash to make two payrolls. Help us, they pleaded. I did offer to help them, but first i asked: “how did you get into this fix?” I never heard from them again.

I now see their answer.  Total abdication on the part of the Board. Why did they let this happen?

Greetings friends.