What Corporate America Could Learn From the Nonprofit Community
In last week’s Wall Street Journal front-page article How Jeffrey Immelt’s ‘Success Theater’ Masked the Rot at GE, it seems that GE’s Chairman and CEO wouldn’t surround himself with anyone willing to say that the emperor has no clothes.
The famed management guru Peter Drucker once said that America’s corporations could learn from the nonprofit community and specifically pointed to the separation of the board chair and CEO role and noted how well the nonprofit community executed this (What Business Can Learn from Nonprofits, HBR July/August 1989).
When unpacking failures of Enron and other major corporate debacles, governance expert Jeffrey Sonnenfeld noted that without the ability to challenge management, corporations were in for a big problem. He related this key element to culture in the boardroom (In the Boardroom, Culture Counts, Nancy R. Axelrod, Journal of Association Leadership, Fall 2004).
Nonprofit expert Nancy Axelrod has published repeatedly on the subject of culture and Texas A&M’s Will Brown talks of culture as one of the two critical factors driving organizational performance in the nonprofit space.
So how do we instill an environment of balanced conflict in the boardroom? How do we capture the best and brightest from introverts who may be reluctant to speak up? How do we ensure that squirrels don’t become commonplace and lead to poor decision making?
Setting the stage for critical conversations and constructive conflict improves the capacity to make wise consequential decisions. Overcoming these issues is a passion project at Association Management Center, where we work with and develop boards to ensure they’re high-functioning and making the right strategic decisions that drive their associations further.
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