Is the leadership of your nonprofit organization collaborative and effective or mired in dysfunction? Nonprofit leadership includes both the board of directors and the executive director. The effectiveness of this relationship is crucial in achieving the nonprofit’s mission. So how do you optimize this relationship?
There is no silver bullet, or one size fits all answer to this question, but let’s explore the essential factors in an effective, productive board – executive director relationship.
First, it is important to clearly define the role and responsibilities of the board of directors and the executive director. While the roles can vary at different points in the life of the nonprofit, the basic roles are governance and management.
The board of directors has three primary legal duties; duty of care, duty of loyalty, and duty of obedience. The board is responsible for adopting and monitoring the nonprofit’s structure and processes to ensure the integrity and reputation of the nonprofit. This includes
- Strategic planning
- Budgeting
- Hiring and assessing the performance of the executive director
- Ensuring financial accountability and sustainability
- Safeguarding the best interest of the nonprofit and community being served
The role of the executive director is to manage the daily operations in alignment with the strategic plan and budget adopted by the board. The executive director manages daily operations and regularly interacts with employees and volunteers.
Effective and clear communication is critical to the ongoing alignment of these responsibilities. Utilizing position descriptions for the board and executive director is a good foundation for defining expectations and responsibilities. Policies are also essential to assigning responsibilities and determining the type and frequency of reporting.
What are some potential warning signs that this relationship may need attention?
- Board meetings are run by the executive director
- Board meetings are dominated by one or two voices
- 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
- The executive director recruits and nominates new board members
- High employee turnover
- Staff members cannot attend any portion of a board meeting
- No performance reviews for the executive director or board members
- 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.
- Lack of accountability
- No policy or documentation to support the reasonableness of executive director compensation
Another consideration impacting this relationship is the life stage of the nonprofit. Nonprofits are often founded by passionate individuals with a clear vision for accomplishing the mission they have identified. The founder often solicits the initial board members who may or may not have the expertise needed to grow the nonprofit. As the nonprofit grows it is important for organizational resources and development to keep pace with expanding programs.
Okay, enough of the warnings, let’s look at the signs of a healthy relationship between the board and executive director.
- Engaged and active board members who ask questions and share their expertise
- Board members who participate in nonprofit events
- Open door policy for staff to attend appropriate portions of board meetings
- The executive director is paid fairly and not burnt out
- Transparency of reporting
- Questions and continuous learning are encouraged
- Missteps are viewed as learning opportunities
Creating and fostering a high functioning, a collaborative partnership between the board and the executive director takes time and effort, but the results are worth it.
Learn more in this video as Melodi Bunting explains the role of the board, the relationship between the board and the executive director, when things don’t go according to plan, and how client advisory services can help.
Our non-profit speaker’s bureau offers a number of one-hour board training programs for non-profit organizations led by professionals with in-depth knowledge and expertise in non-profit management and governance. Non-profits may receive two of these sessions free of charge. Visit here for a list of topics available through our non-profit speaker’s bureau, or contact us for more information about our custom training options.
