It is likely that your public organization is run by an executive, such as a public college president, a director or other professional, and that your board is responsible for overseeing the executive. If so, respect the trust the taxpayers placed in you. While you do not want to interfere with the day-to-day management of the public organization, you do want to make certain that the executive’s actions align with the objectives of the public organization. The executive reports to you and is accountable to the board. Be an active overseer.
Be clear about time expectations. If the executive must devote his or her full time and attention to the public organization, make that explicit in the contract. If the position is part-time, the contract should clearly set out time and attendance requirements.
Expect the executive to timely inform the board of major projects, expenditures and initiatives. Use board meetings to discuss substantive issues with the executive, such as budget planning, capital projects and significant policy matters. Ask questions, seek clarification and get back-up documentation. Collaboration with the executive will require open communication and information sharing.
Questions to ask:
- What are the executive's objectives and priorities for the organization?
- Do these objectives align with the organization's mission and values?
- What are the financial costs of achieving these objectives?
Perform Oversight of the Leading Executive
To help both the executive and the organization, your board should conduct an annual performance evaluation of the executive. It also must establish a system to track and account for the executive’s vacation, sick and work time. Both the performance assessment and the mechanism used to account for the executive’s time should be established in writing. The board also should ensure that the organization can track other expenses and requests for reimbursements.
The board should approve the executive’s expenses and reimbursements (at least those above a certain dollar threshold). This includes reviewing the back-up documentation for the executive’s expenses and reimbursements. Staff who report to the executive are not in a position to question the executive’s performance, expenditures or conduct. The board’s independence and oversight in this regard are therefore critical.
Similarly, perform your due diligence before signing the executive’s contract – whether it is the executive’s first contract or a renewal. Your board should do its own, independent research to ensure that the salary and other benefits offered, including vacation time, sick leave and other fringe benefits, are reasonable and consistent with standard practices. Make sure that they are comparable to those of other executives with like experience and expertise who work in similar public settings. And very importantly, ensure that the compensation is consistent with the public organization’s budgetary commitments.
Finally, apply the same due diligence if you have to recruit a new executive for the public organization. Conduct an appropriate search that provides you with a talented applicant pool. As part of the selection process, speak with references and conduct a background check.
Information about state salaries is accessible through the CTHRU Statewide Payroll website.
Questions to ask:
- What is the organization's budget for the executive's salary?
- How much time is the executive required to devote to the public organization?
- How does the organization document and verify the executive's work, vacation and sick leave hours?
- What is the public organization's expense reimbursement policy? Is it consistent with the public organization's mission and objectives? Does it clearly define how the executive's expenses are reviewed and approved?
- Do the executive's reimbursement requests match legitimate expenses related to the public organization's public purpose?
Consider establishing an independent audit committee that reports to the board. Among other duties, the committee could periodically audit reimbursements and expenses at the executive level.
Boston, MA 02108
|Date published:||February 1, 2022|