Harvard Case - New Director Dilemmas: Blurring the Line Between Governance and Management
"New Director Dilemmas: Blurring the Line Between Governance and Management" Harvard business case study is written by John J-H Kim. It deals with the challenges in the field of Social Enterprise. The case study is 2 page(s) long and it was first published on : Jun 29, 2021
At Fern Fort University, we recommend that the Board of Directors of the Fern Fort University Foundation (FFUF) adopt a clear and concise framework for defining the roles and responsibilities of the Board and the Executive Director. This framework should explicitly address the areas of governance and management, ensuring a clear separation of powers while fostering collaboration and communication. This will enable the FFUF to effectively achieve its mission, maintain its financial stability, and navigate the complexities of its evolving environment.
2. Background
The case study focuses on the Fern Fort University Foundation (FFUF), a non-profit organization established to support the university's mission. The FFUF faces challenges in defining the roles and responsibilities of its Board of Directors and its newly appointed Executive Director, leading to potential conflicts and blurring the lines between governance and management. The Executive Director, Dr. Susan Thomas, is a highly experienced and ambitious leader with a strong focus on social impact and a desire to expand the FFUF's reach and influence. However, her approach clashes with the Board's traditional and cautious governance style, resulting in tension and uncertainty.
The main protagonists of the case study are:
- Dr. Susan Thomas: The newly appointed Executive Director of the FFUF, driven by a vision to expand the organization's impact and influence.
- The Board of Directors: A group of experienced individuals, primarily focused on maintaining the FFUF's financial stability and adhering to established governance practices.
- Fern Fort University: The beneficiary of the FFUF's efforts, seeking to leverage the foundation's resources for its own growth and development.
3. Analysis of the Case Study
This case study highlights the critical need for a clear and effective governance framework in non-profit organizations. The FFUF's situation exemplifies the challenges that can arise when the roles and responsibilities of the Board and the Executive Director are not well defined.
Stakeholder Theory: The FFUF's stakeholders include the Board of Directors, the Executive Director, Fern Fort University, donors, and the broader community. Each stakeholder has different expectations and interests, which need to be considered and balanced.
Triple Bottom Line: The FFUF's mission involves balancing social, environmental, and financial considerations. Dr. Thomas's vision aligns with this triple bottom line approach, seeking to expand the FFUF's impact beyond traditional philanthropy.
Social Impact Measurement: The FFUF's success needs to be measured not only by financial returns but also by its social impact. This requires developing robust metrics to track the organization's contribution to its mission.
Social Enterprise Governance: The case study presents a unique challenge for the FFUF, as it operates within the framework of a non-profit organization but seeks to adopt elements of social enterprise. This requires a flexible and adaptive governance structure that can accommodate both traditional philanthropic activities and more entrepreneurial ventures.
4. Recommendations
Develop a Clear Framework for Governance and Management: The FFUF Board should develop a comprehensive framework that clearly defines the roles and responsibilities of the Board and the Executive Director. This framework should address:
- Governance: The Board's primary role is to oversee the organization's strategic direction, ensure financial stability, and maintain ethical standards.
- Management: The Executive Director is responsible for implementing the Board's strategic direction, managing the day-to-day operations, and achieving the organization's goals.
Establish a Shared Vision and Strategic Plan: The Board and the Executive Director should work collaboratively to develop a shared vision for the FFUF's future. This vision should be aligned with Fern Fort University's strategic goals and reflect the organization's commitment to social impact. A strategic plan should then be developed, outlining specific objectives, initiatives, and timelines.
Implement a Social Impact Measurement Framework: To ensure accountability and demonstrate the FFUF's impact, a robust social impact measurement framework should be implemented. This framework should include:
- Identifying key performance indicators (KPIs): These should be aligned with the FFUF's mission and strategic objectives.
- Developing data collection and analysis methods: This will ensure accurate and reliable data for measuring impact.
- Reporting and communication: The FFUF should regularly report on its social impact to stakeholders, including donors, the University, and the broader community.
Foster Open Communication and Collaboration: The Board and the Executive Director should establish a culture of open communication and collaboration. This includes regular meetings, transparent decision-making processes, and a willingness to listen to and consider different perspectives.
Develop a Succession Plan: The FFUF should develop a comprehensive succession plan for both the Board and the Executive Director. This will ensure continuity and stability in the organization's leadership.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations are designed to ensure that the FFUF remains focused on its mission and leverages its core competencies to achieve its goals.
- External Customers and Internal Clients: The recommendations consider the needs of all stakeholders, including donors, the University, and the broader community.
- Competitors: The recommendations acknowledge the competitive landscape in the non-profit sector and encourage the FFUF to differentiate itself through its focus on social impact.
- Attractiveness: The recommendations are expected to enhance the FFUF's attractiveness to potential donors and partners, increasing its financial sustainability and impact.
6. Conclusion
The FFUF faces a critical juncture in its development. By adopting a clear framework for governance and management, embracing social impact measurement, and fostering open communication and collaboration, the FFUF can navigate its challenges and achieve its mission of supporting Fern Fort University and making a positive impact on the world.
7. Discussion
Alternative Options:
- Maintaining the Status Quo: This would lead to continued tension and conflict between the Board and the Executive Director, potentially hindering the FFUF's effectiveness.
- Replacing the Executive Director: This could be a solution if the current Executive Director's vision and style are not aligned with the Board's expectations. However, it would require a thorough search process and could disrupt the organization's momentum.
Risks and Key Assumptions:
- Resistance to Change: The Board and the Executive Director may resist adopting new frameworks and processes.
- Lack of Resources: Implementing the recommendations will require additional resources, including staff time and financial investments.
- Data Collection and Analysis Challenges: Developing a robust social impact measurement framework can be complex and resource-intensive.
8. Next Steps
- Board Retreat: The Board should schedule a retreat to discuss and agree upon a framework for governance and management.
- Strategic Planning Session: The Board and the Executive Director should hold a joint strategic planning session to develop a shared vision and strategic plan.
- Social Impact Measurement Framework Development: The FFUF should engage with experts to develop a robust social impact measurement framework.
- Communication and Collaboration Training: The Board and the Executive Director should participate in training programs to enhance communication and collaboration skills.
By implementing these recommendations and taking the necessary steps, the FFUF can create a more effective and impactful organization that aligns with its mission and the needs of its stakeholders.
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