Effective CEO Assessments - agb.orgagb.org/sites/default/files/u27335/forum_2018_effectiveceo... · Why Assessment Matters Good practice—set goals and assess progress, enhance performance,

Effective CEO AssessmentsRobert Fealy and Merrill Schwartz

Foundation Leadership ForumJanuary 22, 2018Palos Verde, CA

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Agenda Why Assessment Matters Boards and CEOs Foundation Context Areas for Leadership Assessment Annual Assessment Process Periodic Comprehensive Assessment Discussion and Q & A

Why Assessment Matters

Good practiceset goals and assess progress, enhance performance, improve board/CEO relationship

Fiduciary responsibility of boardhire, support, compensate, and assess the chief executive

IRS 990inform compensation decisions

Boards and Chief Executives

Select, support, and assess Board chair/CEO relationship keybut chair and

board must act together

Directors as fiduciariesact collectively (no Lone Rangers)

Regular communication, not once a year Assure shared vision, strategic goals, and priorities

Foundation Context

Public open meeting and records lawsif applicable to foundation, is CEO assessment excepted?

Foundation, institution and system/state goals

Fiscal realities for compensation

Role of university president and foundation board in hiring, compensating, and assessing the foundation CEO

AGB Policies Practices and Composition of Governing and Foundation Boards 2016, p. 53 ( see attachment)

Areas for Leadership AssessmentUniversity of Cincinnati Foundation:

Leadership Selection and Development of Talent &

Organization

Business and Organizational Acumen Collaboration Execution Person Traits Greatest Strengths/Opportunities

(see attachment)

CEO Responsibilities

University Programs &

Funding Priorities

Foundation/ Advancement

Strategy & Long Term

Goals

Assessment of Talent & Available Resources

Develop Operational

Plan & Initiatives

Establish Performance

Metrics

Secure Approvals, Funding & Additional Resources

Execute Plan

Measure & Communicate

Results

CEOCEO

CEO Responsibilities

CEO

CEO

University Programs & Funding Priorities

Foundation/ Advancement Strategy & Long Term Goals

Assessment of Talent & Available Resources

Develop Operational Plan & Initiatives

Measure & Communicate Results

Establish Performance Metrics

Secure Approvals, Funding & Additional Resources

Execute Plan

Annual Assessment:Preparation and ProcessPreparation

Board policy on CEO assessment CEO position description Annual and long-term goals, measurable &

qualitative

Process

Board committee for CEO assessment CEO self-assessment Board input Meeting with board/committee chair and CEO

Annual Assessment:Board Review and FeedbackAssessment Committee Review CEOs self-assessment feedback from other board members data and feedback from other sources, as

appropriate questionnaires and surveys: not typical

Review with CEO board chair and chair of the committee meet

promptly with the CEO to provide feedback documented oral and/or written review focusing

on the future

Periodic Comprehensive AssessmentPurposes systematic feedback leadership development reflect on leadership over time determine compensation succession planning

Timing every 3 to 5 years according to policy avoid crises and public controversies

Discussion Question

What are appropriate goals and good measurements for CEO reviews?

Performance Review (sample) Above Top Average Middle Lean Agree Disagree Neutral 1 Exhibits excellent leadership skills 8 1 3 2 Is a strong communicator 8 0 4 3 Has the trust and confidence of university

leaders, administrators, foundation board 8 0 4

4 Has a strong set of personal values and work ethic

10 0 2

5 Delivers on his promises 10 0 2 6 Works collaboratively up and down the chain

of subordinates, colleagues, superiors 8 1 3

7 Is decisive, yet open to constructive input 8 1 3 8 Clearly articulates foundations strategy and

goals 9 0 3

9 Recruits excellent foundation leadership and staff

8 1 3

10 Demands excellence from his team 8 0 4 Top Above Middle Lean 11 Relative to other not-for-profit leaders you

know, where does he rank? 3 5 4 0

Above

Top

Average

Middle

Lean

Agree

Disagree

Neutral

1

Exhibits excellent leadership skills

8

1

3

2

Is a strong communicator

8

0

4

3

Has the trust and confidence of university leaders, administrators, foundation board

8

0

4

4

Has a strong set of personal values and work ethic

10

0

2

5

Delivers on his promises

10

0

2

6

Works collaboratively up and down the chain of subordinates, colleagues, superiors

8

1

3

7

Is decisive, yet open to constructive input

8

1

3

8

Clearly articulates foundations strategy and goals

9

0

3

9

Recruits excellent foundation leadership and staff

8

1

3

10

Demands excellence from his team

8

0

4

Top

Above

Middle

Lean

11

Relative to other not-for-profit leaders you know, where does he rank?

3

5

4

0

Periodic Comprehensive Assessment

Multi-Source / 360 Reviews with Interviews/Surveys

board member(s) or external consultant(s) confidential but not anonymous individuals and/or small groups interview questions and questionnaires: aspects of

leadership

document process; send follow-up communications plan for leadership development and enhanced

organizational effectiveness

Discussion at Tables

Whats working and whats not in annual and comprehensive CEO assessment at your foundation?

How do you do it? What are the barriers? Pitfalls to avoid? Recommended good practices? Questions?

Each group will provide a brief summary of best practices and those to avoid.

Special Issues

Risk managementpolitical, financial, and reputational

Divisions within the board Differences of opinion between university

president and foundation board

Other topics?

Resources & Contact Information

Bob Fealy, [email protected]

Merrill Schwartz, [email protected]

www.agb.orghttps://www.agb.org/briefs/presidential-assessmenthttps://www.agb.org/blog/2016/03/01/presidential-assessments-that-make-a-differencehttps://www.agb.org/trusteeship/2012/1/how-presidential-evaluations-must-changehttps://www.agb.org/store/assessing-presidential-effectivenesshttps://www.philanthropy.com/article/6-Steps-Board-Members-Should/241779

mailto:[email protected]:[email protected]://www.agb.orghttps://www.agb.org/briefs/presidential-assessmenthttps://www.agb.org/blog/2016/03/01/presidential-assessments-that-make-a-differencehttps://www.agb.org/trusteeship/2012/1/how-presidential-evaluations-must-changehttps://www.agb.org/store/assessing-presidential-effectivenesshttps://www.philanthropy.com/article/6-Steps-Board-Members-Should/241779

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UNIVERSITY OF CINCINNATI FOUNDATION Performance Evaluation _________________________ Date of Review: ____________________ 3 Point Scale 1 = Acceptable

(50th percentile) 2 = Strong (50-75th percentile)

3 = Very Strong (75th percentile and above)

*Note any significant weaknesses or suggested improvement in the Comments column 1. Leadership 1 2 3 Comments a. Energizes the organization b. Articulation of strategic vision c. Articulation of annual goals d. Approachability throughout organization e. Has trust and respect of employees f. Has trust and respect of trustees, donors, educators, etc. g. Leads by example h. Connects with staff i. Connects with outside constituents 2. Selection and Development of Talent and Organization a. Eye for talent b. Employee engagement c. Effective coach and motivator d. Develops high performance organization d. Creates succession plan e. Champions workforce diversity f. Seeks out diverse views g. Actively promotes culture h. Promotes initiative and decision-making among employees

and executives

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3. Business and organizational acumen a. Business instincts and judgment b. Intellectual edge, deep thinker c. Seeks input where knowledge and experience lacking d. Development of clear strategic plan e. Vigilant of, and anticipates changes in market, or general

trends

f. Development of clear annual goals linked to strategy 4. Collaboration a. Works well with subordinates down through organization b. Works well up the chain of command c. Good chemistry with university leadership and board of

trustees

d. Seeks UC and UCF board input on key issues e. Participates actively in trade groups and other foundation

oriented organizations

f. Provides candid and timely communication to UC and UCF boards

g. Networks effectively with other executives and constituents h. Transparency 5. Execution a. Executes effectively on initiatives and plans b. Decisiveness c. Confronts reality and acts timely d. Delivers measurable results directly as a result of his decisions

and actions

e. Constantly assesses and establishes priorities f. Balance between short and long term goals g. Understands financial model and key drivers of performance

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h. Robust operating discipline i. Manages team to plan effectively j. Devotes appropriate time to cultivation activities 6. Personal traits a. Has established deep values and culture b. Ethics beyond question c. Strong work ethic d. Drives positive environment e. Likes people f. Stays current on management approaches, technical

requirements, and governance practices

Other comments: Three greatest strengths: 1. _____________ 2. _____________ 3. _____________ Opportunities:

__________________ __________________ __________________

TABLE 93: COMPENSATION AND REPORTING RELATIONSHIP OF FOUNDATION CEO BY ENDOWMENT SIZE

Relationship

Paid by foundation and institution/system and reports to foundation board and institution/system president 15.0% 20.0% 8.7% 23.5% 24.1% 0.0% 0.0%

Paid by foundation/ reports to foundation board 32.7% 13.3% 8.7% 17.6% 48.3% 63.6% 63.6%

Paid by foundation/ reports to foundation board and institution president 10.3% 0.0% 8.7% 23.5% 0.0% 9.1% 27.3%

Paid by institution and reports to institution president 19.6% 26.7% 21.7% 17.6% 24.1% 18.2% 0.0%

Paid by institution and reports to institution president and foundation board 22.4% 40.0% 52.2% 17.6% 3.4% 9.1% 9.1%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Less

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$10 m

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$10 m

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$50 m

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$51 m

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$100 m

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$101 m

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$500 m

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$500 m

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$1 b

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$1

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Endowment Size

G61432_AGB_2016BoardComp_interior.indd 53 4/5/16 2:04 PM

Reproduced with permission of the Association of Governing Boards of Universities and Colleges. Copyright 2016 All rights reserved.

www.agb.org

Binder4CEO Evaluation Blank Form2016CompositionSurvey_Extract_Table93

CEO Assessment FLF 2018.pdfEffective CEO AssessmentsRobert Fealy and Merrill SchwartzAgendaWhy Assessment MattersBoards and Chief ExecutivesFoundation ContextSlide Number 6Areas for Leadership AssessmentSlide Number 8Annual Assessment:Preparation and ProcessAnnual Assessment:Board Review and FeedbackPeriodic Comprehensive AssessmentDiscussion QuestionPerformance Review (sample)Periodic Comprehensive AssessmentDiscussion at Tables Special IssuesResources & Contact Information