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Dueling Boards: A Cautionary True Story

March 12, 2015 0 Comments

iStock_000020585606Large(1)The tension in the conference room was palpable, as the superintendent and her board president at one end of the table glared at the educational foundation CEO and his board chair at the other end.  I sat in the middle between the two “camps,” having been enlisted to facilitate a discussion about the school district-foundation working relationship.  The school board president kicked off the discussion on a positive note, expressing the district’s appreciation for the foundation’s efforts to raise money for district educational initiatives and to build wider community support for the district.  Then he homed in on the issue that’d led to this pretty dramatic negotiating session:  that the foundation CEO and his staff had started making innovation grants directly to faculty applicants, without going through any kind of district vetting.  I recall the president saying something along these lines:  “We really need financial support, and we think it’s great you’re bringing new resources into the district, but it’d be really chaotic for your staff to deal directly with our faculty and put money into projects that don’t fit into our educational priorities and plans.”  The foundation board chair, clearly offended, responded by pointing out that the foundation had built a board of real heavy-hitters – business and nonprofit CEOs with access to substantial financial resources – who were passionately committed to public education.  “Not only should you appreciate what we’re doing for the schools, you should respect the board we’ve put together,” was what I recall him saying.

I’m happy to report that this story has a happy ending:  the superintendent and foundation CEO worked out a simple and somewhat obvious solution that had proposals for funding go through the superintendent’s office to the foundation, after having been vetted internally.  And the superintendent wisely sweetened the deal by inviting the foundation board chair and CEO to attend the district’s annual board-executive strategic planning retreat, at which educational priorities were updated and high-stakes issues identified and analyzed.  But what struck me is that the dramatic confrontation in the boardroom could easily have been avoided if the district had taken the initiative in building a mutually satisfying and productive working relationship with the foundation early in the foundation’s life.

An educational foundation – by definition an independent nonprofit corporation not part of a school district’s structure – will succeed at fund raising only to the extent that it builds a truly high-level board that can access financial resources.  Of course, a full-fledged board of directors is required by law, so the only question is how high-level the board will be.  Since heavy-hitter board members rightly expect to have impact as foundation governors, the time to work out the district-foundation working relationship is very early in the foundation’s life when the situation is fluid.  What I’ve seen work very well is for the district’s board president and superintendent to produce a formal relationship document, spelling out the district’s expectations and ground rules vis a vis the new foundation, before lines have hardened.   Such a document, which, of course, could easily be turned into a formal district-foundation agreement, should map out how proposals for foundation funding will be developed within the district structure and submitted to the foundation.

Of course, since a foundation is an independent corporate entity, a school district can’t simply tell it what to do, but by suggesting the terms of a workable working relationship during the foundation’s formative period, and negotiating those terms with the foundation CEO and board, the kind of dramatic meeting I described at the beginning of this article can be averted.

Doug Eadie

President & CEO of Doug Eadie & Company, Inc., Doug Eadie assists superintendents in building rock-solid partnerships with their school boards.
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President & CEO of Doug Eadie & Company, Inc., Doug Eadie assists superintendents in building rock-solid partnerships with their school boards.