Below is an extract from a recent conversation I had with Anthony Bolton, President of Investments at Fidelity International and the City of London’s most successful fund manager of the last thirty years. He was commenting after reading the section on leadership in The little blue book.
“I think the ceo is absolutely the most important aspect of a charity … A good or bad ceo makes or breaks a charity. I think the role is even more important than that at a company. A company can sometimes succeed by say having a great product or discovering a big oil field regardless of how good the ceo is in a way a charity can’t.”
Anthony has spent decades analysing and investing in public companies, so his comments carry considerable weight. His first point is perhaps not surprising and a view shared by many. But his comparison with commercial companies is fascinating.
Everyone who works for a charity knows how important their chief executive is. Charities depend on their vision and passion, and commitment to the cause. The CEOs of charities work hard: not only do they set the strategy and lead their organisations on a day-to-day basis, but they are also invariably the biggest fundraisers and are expected to get involved in the front-line operations of their organisation.
Unlike the bosses of many companies, there are tasks that he or she cannot delegate – even small funders usually want to deal directly with the CEO, the board often does not provide the support it should, and invariably resources constrain what back-up is available. A CEO needs to inspire people and cultivate close relationships with whimsical donors, alongside having a solid grasp of the machinations of the business.
In contrast, a CEO of a successful company can often get away with being simply competent. As Anthony notes, a company can sometimes succeed by having a great product or making a discovery in a way that a charity cannot.
Anthony’s observation is striking and makes me feel fortunate to have met lots of charity chief executives during my time at NPC. For their tireless work for the public’s benefit, I think we should all be thankful.
To read a follow-up to this post, see here.
I've now worked for three charities and volunteered extensively for two others, and I have to say that this analysis is only right up to a point.A small charity is definitely very reliant on the CEO in all the ways that John suggests. But once it gets above a certain size – I'm talking about the those with income in the tens of millions – the CEO becomes progressively less important.He or she is not going to be filling the role of inspiring staff, because the vast majority of the staff will rarely if ever get to meet the CEO. In my current role, there are four layers of management between me and the CEO, who I have seen in person once in three years, and never spoken to.Large charities will also almost certainly have multiple income streams, reducing the importance of "whimsical donors". Moreover, once you have a whole department focusing on legal compliance, another department managing public awareness, another forecasting future income, the CEO (hidden behind their impregnable PA) will inevitably be less able to shape what goes on.Truthfully, I think that in whether in business or the not-for-profit world, there's an inverse relationship between the size of an organisation and the importance of chief exec. Many charities do fantastic work despite, rather than because of, the person at the top
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