Hey Everyone,
I am seeking advice on an issue that arose unexpectedly during our RFP process for a new financial advisor.
Between the board and me as Executive Director, we agreed that the Finance Committee-which includes two board members, me, and our Finance Director-would oversee the process. We developed an Investment Policy Statement (IPS), which the full board approved, and then issued an RFP for managing our endowment funds (approximately $5 million).
We received proposals, narrowed the field, and interviewed four advisors. During those interviews, it became clear that the board members on the committee favored a very different type of advisor than staff did. The point of tension centered on one candidate whom some considered "too close" to me. This advisor lives and works in our town after many years in New York, and because of our shared professional background in the art world, we have had occasional contact: 2–3 dinners over four years and one trip together to an art fair. But to be fair, we are on very friendly terms.
From my perspective, this candidate is exceptionally qualified: a former MoMA trustee with deep nonprofit experience, extensive knowledge of the art world, and a clear willingness to support our upcoming capital campaign by making introductions to high-net-worth individuals, hosting events, and attending openings. In contrast, the advisor preferred by some board members has far less experience, no art-world connections, and is not based locally.
The board members' main concern appears to be the potential perception of a conflict of interest between myself and the highly qualified advisor. While I understand the importance of optics, it's worth noting that this is a small town. Several board members also know this advisor socially, not just me, which makes the question of "closeness" more nuanced than it may seem.
My questions:
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Given the clear delineations of roles and authority in managing endowment funds, how should we balance perceptions of conflict of interest with the potential advantages of securing a highly qualified advisor?
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What is best practice when staff expertise strongly favors one candidate while board members are concerned about optics and lean toward another?
Thank you so much.
Aldy
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Aldy Milliken
Executive Director
Kimball Art Center
Park City UT
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