Firing the Executive Director
By Jan Masaoka
A surprising finding from a recent national study showed that nearly one-third of nonprofit executive directors are either fired or forced out by the board. Does this mean that boards are erratic and problematic, or that they step up to the plate and take charge when action is needed? Either way, firing an executive can be done poorly or done well. This issue of the Board Café takes on this tough topic.
Boards of directors often fall into one extreme or another when it comes to dissatisfaction with the executive director. In some cases, such dissatisfaction can simmer for years without resolution. In other cases, boards can be too hasty, and fire an executive at the drop of a hat, or more often, abruptly conclude a long period of silent dissatisfaction with a sudden termination. And it’s worth remembering that, in still other cases, the board has been happy with an executive’s work for several years, but the organization is poised to go in a direction that requires a new type of leader. How the executive director is terminated should be considered carefully for its impact on the staff, members, and others. And sometimes just knowing more about HOW boards fire their directors can help you relax into just working more proactively with your director.
Sometimes it's necessary for a board to fire the executive director. Occasionally the decision is clear to everyone, such as in instances of embezzlement or unethical behavior. But more often, board members get indications over time that the director is either not doing the job or causing problems for the organization.
The prospect of open conflict with the executive director is so dismaying that many board members who are dissatisfied with the director's performance often choose to resign or drop off the board, rather than take on the issue. Others try to look the other way for as long as possible. Dissatisfaction with the executive director often appears first as rumblings, such as a staff member complaining to a board member about morale, or committee members confiding their concerns to one another.
When such rumblings appear, the board should hold an executive session and establish an investigative committee to clarify the content and extent of the dissatisfaction, and determine what general approach is appropriate. If, for example, there are rumors of sexual harassment, the committee (or a consultant) can interview staff and volunteers and determine whether the rumors are frivolous or whether they require a more formal investigation. In another example, the committee may find that the executive director simply doesn't understand the administrative approach the board wants to see taken; in such an instance the board may choose to set up a series of meetings with the executive director to clarify directions and improve communication.
One way to put the issue on the table is to call for a "vote of confidence or no confidence" in the executive director. For example, board members may be asked to vote for one of the following resolutions: a) "I am confident that the executive director is doing a satisfactory job;" or b) "I have lost confidence that the executive director is doing, or will be doing in the near future, a satisfactory job." By doing so, board members can express their concerns without having to vote immediately on a "fire" resolution.
If the board has strong reservations about whether the executive director's performance is satisfactory, it should establish a committee to work more closely with the director in a supervisory capacity. Beginning with letting the executive director know the extent of dissatisfaction on the board, the committee can document the problems and take steps to improve the director's performance. If performance doesn't improve over time, and the director is fired by the board, the ongoing documentation can help deter a lawsuit against the agency by the former executive director. No level of documentation can guarantee that a lawsuit won't be brought, but an agency holds a stronger position in court and in the community if personnel policies have been followed, if steps have been taken to improve performance, and if those steps are documented as having failed.
If, after appropriate investigation and deliberation, a board feels that the executive director should leave the organization, it may choose first to have the board officers approach the director and suggest that a resignation would be welcomed. Many executive directors under pressure prefer resignation to being fired, and some board members feel that a resignation leaves the organization in a better light than termination does.
Whichever is chosen, board action to terminate or to accept a resignation, should be put into the minutes. The board should document whether there is any severance pay, any remaining tasks to be completed by the departing executive director, and close any other financial relationship. The board should develop a straightforward explanation for the resignation which can be communicated to staff, volunteers, funders, and others in the community.
Original publication date: 3/06/2007
© 2007 CompassPoint Nonprofit Services