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Values: Balancing Commercial CEOs and Not For Profit (NFP) Board’s Ethical Compass
In the ever-evolving and changing NFP world, the appointment of CEOs with commercial acumen has become increasingly common. While the pursuit of financial sustainability and growth is understandable, the question arises: have NFP boards inadvertently diminished the importance of core values in their pursuit of commercially savvy leadership? This article talks about the arguably delicate balance between commercial expertise and a strong values-driven approach, exploring the impact of this shift on NFP organisations.
The NFP sector has definitely seen a notable shift towards embracing CEOs with commercial backgrounds. The rationale behind this trend is understandable, albeit debatable, that being that commercial leaders bring a strategic mindset, financial acumen, and a results-oriented approach. This approach in turn being designed to bring, amongst other things, greater operational efficiency and a growth mindset. However, as Boards focus increasingly on commercial success, often starting with the appointment of a commercially experienced CEO, the intrinsic values that underpin the NFP sector might be at risk of diminishing in importance.
Values are the heart and soul of NFP organisations, defining the organisation’s purpose, its commitment to social impact, and its ethical framework. Values influence decisions, guide behaviour, and shape an organisation’s identity in the eyes of stakeholders. Values are also a large part of why the majority of people employed in the NFP space choose to work there in the first place. The question then arises: can an organisation truly fulfill its mission without holding steadfast to its values?
As NFP Boards prioritize candidates with commercial expertise, there is a risk that values could take a back seat. While financial growth and sustainability are important, should it come at the possible expense of the very essence that sets NFPs apart from their for-profit counterparts. Diluting values might lead to a misalignment with the organisation’s mission and erode the trust of staff, donors, volunteers, and the organisation’s clients.
The harmonious integration of commercial proficiency and NFP values is not an impossible feat. Values-driven leadership can enhance, rather than hinder, commercial success. By valuing empathy, social responsibility, and ethical decision-making, CEOs can forge meaningful connections with stakeholders, foster a positive organisational culture, and enhance long-term sustainability.
Reconnecting with Values
NFP Boards can take proactive steps to ensure that values remain integral to their organisations:
Robust Selection Process: During CEO recruitment, prioritize candidates who demonstrate alignment with the organisation’s values alongside commercial skills.
Leadership Development: Offer ongoing leadership development programs that emphasize values-based leadership, fostering a culture of integrity and accountability.
Transparent Communication: Maintain open communication with stakeholders about the organisation’s values, their importance, and how they inform decision-making.
Balanced Metrics: While financial metrics are essential, consider incorporating impact and ethical metrics to evaluate success holistically.
Board’s Role in Upholding Values: Boards themselves should embody the values they champion, setting an example for the rest of the organisation.
The marriage of commercial experience and NFP values need not be a trade-off, a values focus and commercial approach are not mutually exclusive. Rather, the two can result in a powerful synergy that drives sustainable growth while staying true to an organisation’s mission. I believe it remains important however for NFP Boards to recognize that values are not a luxury but a cornerstone of their existence. As organisation’s strive to be sustainable, Boards should strive to ensure they uphold the essence of why their organisations exist in the first place and that values matter as a key driver guiding meaningful impact.