Recognizing and Responding to Dysfunction in Nonprofit Board and Executive Director Relationships

A strong, healthy relationship between a nonprofit’s board of directors and its executive director is essential to achieving the organization’s mission. Both the executive director and the board of directors need to understand their distinct roles and be alert to signs of potential problems. The size and life cycle stage of the organization impact these roles. As nonprofits grow and evolve, the roles of the board and executive director may shift, but clarity around these roles and early recognition of potential red flags are key to maintaining trust and effectiveness.

When dysfunction between the board and the executive director is not identified and addressed in a timely manner, the impact can spread and cause widespread consequences. Knowing the red flags applicable to the organization’s lifecycle and addressing them in an effective manner can minimize the negative effects and associated risks to the nonprofit.

Red flag: Disengaged Board Members

What it may look like:

• Board meetings are dominated by one or two voices.
• Executive director makes the agenda and runs the meeting.
• Meeting time is primarily listening to reports and limited engagement in active discussion.
• Board members do not participate by sharing their expertise or contributing to strategic leadership.
• The executive director recruits and nominates new board members

Ways to address:

• Collaborate on creating board engagement expectations
• Meeting agenda is prepared by the board chair and relevant reports and financial statements are provided in advance of the meeting.
• Hold a strategic retreat where each board member is expected to participate and contribute
• Board develops matrix of optimal mix of board member characteristics and develops a pipeline of potential future board members
• Board members are focused on the mission and overall organization

Red flag: The Board Is Not Meeting Fiduciary Duties

What it may look like:

• Board approves whatever the executive director proposes with little or no discussion
• Board does not review financial and operational performance
• Board does not approve the budget or key policies
• Financial and program reports are unavailable
• IRS Form 990 is not reviewed and understood by the board
• Board is not trained and doesn’t understand its fiduciary responsibilities and legal obligations.

Ways to address:

• Provide new board members with clear expectations and responsibilities
• Offer onboarding materials that include the legal fiduciary duties required
• Inquire of board members what questions they have regarding their responsibilities and if training is needed
• Provide evaluations of board member participation and board culture

Red flag: High Staff Turnover

What it may look like:

• Toxic culture with increased conflict and tension
• Board active in ongoing staff contact and management of personnel
• Micromanaging by executive director

Ways to address:

• Clear distinction between executive director and board roles
• Solicit staff feedback as part of executive director’s annual evaluation
• Clarity on board member’s are volunteers and not staff supervisors

Red flag: Lack of Executive Director Accountability

What it may look like:

• No performance evaluation or performance review done for executive director
• No policy or documentation to support the reasonableness of the executive director compensation
• No continuing education

Ways to address:

• Clarify that this is part of the board’s fiduciary duties.
• Document the timing and responsibilities for performance evaluation
• Adopt a policy on how executive director compensation is determined

The relationship between a nonprofit’s board and its executive director is the backbone of effective nonprofit leadership. When roles are clearly defined, trust is strong, and communication flows openly, the organization is better positioned to fulfill its mission. However, when red flags go unnoticed, whether it’s disengaged board members, unclear accountability, or rising staff turnover, those issues can quickly erode the nonprofit’s effectiveness. Proactively identifying and addressing these signs is not just good practice; it’s essential to building a financially strong, resilient, and mission-driven organization.

Looking to strengthen your nonprofit’s leadership team or improve board performance? Explore our Nonprofit Advisory Services and check out our available nonprofit board training opportunities to support your mission and governance.