Lessons learned: Risk‐taking and the board's role

• Date: 01 March 2017
• Published date: 01 March 2017
• DOI: http://doi.org/10.1002/ban.30415

Editor: Jeff Stratton

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Lessons learned:

Risk-taking and the board’s role

Executive Director Susan Buchanan (susan@

bvwhc.org) said she and her board took a risk sev-

eral years ago that ultimately paid off but almost

cost her job. She considers it a lesson learned. “It’s

an example of how not to approach risk,” she said.

The organization had a large grant available

to it, Buchanan said. “Historically, I was the one

responsible for accepting grants and then advis-

ing the board,” she said. This time, the grant was

quite large (more than $1 million) and initially

extended over a three-year period.

Buchanan kept her board apprised of the grant

from the time she knew of its availability. “Over

the course of three months, the board knew this

process was underway,” she said. When Buchanan

shared the budget for the grant, however, sev-

eral board members became concerned about the

grant’s long-term implications because they real-

ized some of the grant would be used to support

salary. “They were concerned about the sustain-

ability of paying these salaries after the grant term

concluded,” she said.

While Buchanan knew that the intention of the

funder was that an expansion of government funding

would backfill the funding loss from a private grant at

the end of its term, some members of the board were

worried permanent funding would not come through.

“So, I ended up in a high-conflict situation

where some members of the board became overly

cautious in my opinion,” Buchanan said. “The

members were riling each other up and creating

tensions.” Much of the conversation was occurring

out of Buchanan’s presence and it escalated from

the issues surrounding acceptance of the grant to

disagreement about the CEO’s authority and when

an operational decision should include the board.

Buchanan understood the board’s concerns but

felt the grant was significant and the programs it

would support important enough to the communi-

ty that she didn’t want to lose the opportunity. “It

became very high-conflict and I was ready to quit,”

she said.

“In hindsight, I learned a lesson, even though I

felt strongly that this was an operational matter,”

Buchanan said. “Some operational matters are so

significant that the board needs to have input even

though the CEO signs on the bottom line.”

Tempers on all sides eventually cooled over this is-

sue, particularly when Buchanan agreed that every-

one whose salaries were impacted would be required

to sign a statement that if backfill funding did not

happen, salaries would revert back to the prior level.

This grant ended up being transformational for

the organization because it eventually turned into

expanded funding for eight years. The program

received national headlines, and the salaries board

March 2017 Vol. 33, No. 7 Editor: Jeff Stratton

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