Assessment of the Chief Executive FAQ

Why is the Assessment of the Chief Executive Important?

While the chief executive is typically surrounded by people — board members, staff members, funders, and stakeholders — leaders of organizations are often isolated from information about their own performance. The board assessment of the chief executive is one of the most important — and sometimes the only — vehicles for the executive to obtain input into his or her performance. It is a critical process for the executive’s and the organization’s success, and an essential function of the nonprofit board.

 

What is the difference between assessing the chief executive and assessing the organization?

Often, performance on the organization’s goals (as identified in the mission, strategic plan or annual plan) are used as a de facto assessment of the chief executive. If the organization meets its goals, the chief executive is seen as having met his or her annual goals as well. While the overall performance of the organization is a critical aspect of the chief executive’s leadership role and should be considered in the assessment process, there are other skills and talents that go into the leadership and management of the organization that should be taken into account as well. These leadership and management functions are a primary focus of the ACE.

 

Should the assessment results be tied to compensation?

The outcomes of the assessment are one critical point in the discussion of the chief executive’s performance and in decisions about adjustments to the chief executive’s compensation. However, there is no “magic formula” that correlates specific ratings on the assessment to specific changes to compensation. Compensation decisions are complex and need to take into account the organization’s policies and approach to compensation, the terms of the chief executive’s contract, length of tenure, market-based benchmarking data, and specific performance metrics or bonus criteria, in addition to the outcomes of the assessment process.

 

How often should the assessment process be undertaken?

The chief executive needs regular feedback from the board on his or her performance, therefore we believe that the assessment process should be completed annually.

 

Who should lead the assessment process?

Typically, the assessment process is led by the one of the board officers (the Chair, the immediate past chair, or the chair of the Governance or similar committee).

 

Should staff participate in the assessment process?

The ACE is a board governance responsibility.  Therefore, the primary group of respondents should be limited to board members. In some cases, depending on the size, complexity and culture of the organization, it may be appropriate to obtain input from the senior staff who have a closer working relationship with the chief executive and may be able to provide important insight into his or her performance.

 

Should the CE complete a self-assessment?

We recommend that the chief executive complete the assessment and the ACE provides a vehicle for this. The ACE report presents the chief executive’s responses separately from the board’s responses, enabling the board to compare and contrast their perceptions from those of the CE. In addition, many chief executives also prepare a self-assessment narrative highlighting key aspects of their performance over the past year.

 

What is the difference between this and a 360 assessment?

The ACE is a board-run undertaking designed to carry out its governance role of ensuring that the chief executive is effectively carrying out his or her responsibilities. Typically, only board members and the chief executive participate in this process. While the results of the ACE have clear implications for the chief executive’s professional development, the ACE is primarily a vehicle for performance review. A 360 assessment is a tool for leadership and professional development and typically involves the person’s supervisor, peers and direct reports. The 360 assessment process is typically undertaken and “owned” by the individual being assessed. The individual is free to accept, reject or ignore the feedback received. A 360 assessment is primarily a vehicle for performance development and enhancement.