When their executive resigned, the board of a family counseling nonprofit (Agency A) decided to seek a leader (and enhance its mission) through a merger. They chose a partner, a family services center (Agency B), that had a similar mission and a CEO with a strong, positive reputation. Fast forward nine months. The board chairs and board members from both agencies, with the CEO, had been engaged in merger negotiations. Though expectedly challenging at times, all had gone well. The legal agreements were approved and ready to be signed. I remember it was a Wednesday and the Negotiations’ Committee had had its celebratory lunch the prior week. Then the call came I will never forget.

On the other end of the line I heard the CEO say “They fired me.” How could this happen? How could the troubles brewing between him and his board been hidden from the Negotiations’ Committee (both the CEO and his board chair were at all those meetings)? In one moment, with the loss of this key leader, the deal died. Only those closest to the situation know how this happened but it’s an example of how important the board’s role in this process is. Indeed, how important boards are period.

I was reminded of this experience by a recent article published in the Stanford Social Innovation Review (www.ssireview.org). The authors’ (Milway, Orozco, and Botero) research identified three common hurdles in nonprofit mergers. One is the board: it’s critical to get alignment among all the key leaders in the nonprofits involved. My experience, having helped numerous nonprofits with alliances and mergers, resonates with this finding. The process has to address this “soft stuff”—the relationships among the board members and between the boards and executive leaders. Often board members and staff want to stay at the familiar and comfortable level of dealing with data—focusing on due diligence and other objective information (financial, programmatic, etc.)  While that’s important, going deeper in exploring relationships and emotional responses to the idea of a merger also has to happen. People don’t join nonprofit boards because they are passionate about governance! They join for personal mission-related reasons. The implications of a merger for the mission they care about evoke emotional responses. It takes strong and trusting relationships to surface the hurdles and surmount them.

I’ll share more about the other findings in the article next time. What are your reactions? Do you have stories about alliances, mergers, collaborations etc. that you could share here to help others?