Firing the Executive Director
Sometimes a board needs to fire an executive director. Sometimes it’s clear, more often it’s a little fuzzier. So when and how do you do it?
What should your nonprofit’s board do if your executive director must be dismissed?
Boards of directors tend to fall into one extreme or another when it comes to dissatisfaction with the executive director. Some boards let their dissatisfaction simmer for years without resolution. Other boards are 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. Sometimes just knowing more about how boards fire their EDs can help you relax into working more proactively with yours.
Sometimes it’s necessary for a board to fire the executive director. In instances of embezzlement or unethical behavior, the need to terminate is clear to everyone. More often, it’s a little fuzzier — board members may get indications over time that the ED is either not doing her job or causing problems for the organization, but when to fire is not clear cut. So when and how do you do it?
A national CompassPoint study in 2006 found that nearly 30% of departing executive directors were either fired or forced out. To some this is a sign that boards are responsible, attentive custodians of the public trust, while others will read this news as evidence that boards are untrustworthy blowhards. The point here is simply that boards fire their executives more often than is commonly thought, and so there is ample reason to pay attention to doing it well.
Dissatisfaction with the executive director often appears first as rumblings, such as a staff member hinting at problems to a board member, or board committee members confiding their concerns to one another.
The prospect of open conflict with the executive director is so stomach turning to many board members that they often choose to resign or drop off the board rather than voice their issues with the ED. Others try to look the other way for as long as possible.
When the rumblings appear, the board should hold an executive session and establish an investigative committee to clarify the content and extent of the problems and to determine what approach to take. In the case of 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 ED 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 this, board members can express their concerns without having to vote immediately on a “fire” resolution.
Closer monitoring at first
If the board is really concerned about the executive director’s performance, it can establish a committee to work more closely with him in an oversight capacity. Beginning with letting the ED know the extent of dissatisfaction on the board, the committee can document the problems and take steps to improve his performance.
If performance doesn’t improve over time and the ED is fired by the board, the ongoing documentation can help deter a lawsuit against the agency by the former executive director. While no level of documentation can guarantee that the person won’t sue, a nonprofit 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 her and suggest that a resignation would be welcomed. Many EDs 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.
Boards should strongly consider consulting with an attorney — someone who knows nonprofits and employment law — before terminating the executive director. An employment law expert will be familiar, for example, with issues related to protected classes of employees, and nonprofit knowledge is important in understanding the board-executive relationship. Talking with an attorney is a simple step that can help reduce the risk of serious problems with termination.
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 or any remaining tasks to be completed by the departing executive director as well as close any other financial relationship. The board should develop a straightforward explanation to communicate the resignation to staff, volunteers, funders, and others in the community.
Sometimes boards err by terminating an executive director the way a low-level employee in a big corporation would be fired: escorted out of the building without even a minute to say goodbye. Arrange a departure and farewell that is in keeping with your organization’s culture and with the relationship between the board and the executive. Even a fired executive will often leave in a way where no bridges are burned and where both she and the nonprofit can move forward to better futures.
Sample letter accepting executive director’s resignation
November 17, _________
Dear ______________:
On behalf of the Board of Directors of ____________, I am writing this letter to tell you that the board received your letter of November 15 and has accepted your resignation from the position of Executive Director as of November 30, _________.
By November 30, you will submit a final expense reimbursement request for the period of your employment and return to the office the fax machine that you have been keeping at your home.
Your final paycheck, along with a check for accrued vacation, will be issued on November 30, and represents final payment from the ___________________ organization for your services.
Sincerely,
____________________________________ Chair, Board of Directors
Thanks to Mike Allison, Tim Wolfred, and volunteer attorney Michael Schley for help with this article.
See also:
- What is Micromanagement and What Isn’t?
- Our Executive Director is Embezzling
- Succession Planning for Nonprofits of All Sizes
You might also like:
- A Nonprofit Partnership: How One Board Member Connected Two Organizations and Boosted Both
- Innovative Leadership — Culture Doesn’t Have to Eat Strategy: Tending to Human Factors During Strategic Planning
- Insider Newsletters: An Easy Way to Keep Your Board in the Loop and Engaged
- Board Horror Stories: How to Reduce Board Resignations
- Five Years and Growing: How One Nonprofit Built a Sustainable, Collaborative Mission
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About the Author
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Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. The opinions and views expressed in this article are solely those of the authors. They do not purport to reflect or imply the opinions or views of Blue Avocado, its publisher, or affiliated organizations. Blue Avocado, its publisher, and affiliated organizations are not liable for website visitors’ use of the content on Blue Avocado nor for visitors’ decisions about using the Blue Avocado website.
As a current executive Director with over 30 years of experience I want to say that it is very important to look at the past track record of the board before accepting a position. At one time I accepted a position with an organization that was about to close feeling that with my experience I could revive the organization. Prior to my arrival it had 4 executive directors in the past two years. I lasted for 18 months, revived the organization, quadrupled its budget and expanded its programs. I had a positive meeting with my board two weeks before my dismissal. In the next 18 months after my forced resignation the organization had 5 executive directors and is on the verge of going under. My downfall was that I could not change the make up and culture of the board quick enough to save the organization.
I am an executive and member of several boards. I believe the biggest and most important task of a Board is to know when to change executive directors. And, how to make a good decision when hiring an executive director. When a board has gone through as many changes as this, you don’t need a better executive, you need a better board.
As always, Blue Avocado does it again. A very thoughtful discussion on, yes, ” a stomach turning issue” that people don’t like to talk about. This article will be immensely helpful to those Board members who read it, whether they currently have an under-performing ED or not. As a consultant I know a couple of folks I will be emailing this too!
As always, Blue Avocado does it again. A very thoughtful discussion on, yes, ” a stomach turning issue” that people don’t like to talk about. This article will be immensely helpful to those Board members who read it, whether they currently have an under-performing ED or not. As a consultant I know a couple of folks I will be emailing this too!
Executive Directors must not only research the track records of the board and its members before becoming the ED of an organisation; once hired, they must also take an active role in board development and recruitment. This should be a responsibility taken seriously by any ED.
Executive Directors must not only research the track records of the board and its members before becoming the ED of an organisation; once hired, they must also take an active role in board development and recruitment. This should be a responsibility taken seriously by any ED.
As someone in the midst of an ED rightfully being put on “probation,” I really appreciate this article. It also supports my great appreciation for our board, as well as staff, who have stuck to a fair process no matter how torturous for all.
My previous personal experience with several nonprofits, and the accounts from dozens of colleagues, had been one of the ED wielding far too much manipulative power over both staff and board combined with boards dodging their responsibility. So I applaud any board member who takes the time to listen to and work with any non-ED staff; it’s the only way to avoid corruption of an ED’s power. If you set up and follow the process in this article, even some whining from staff can be sorted out. It is far more detrimental to an organization to ignore complaints. While some staff may not understand all that an ED does, there would be greater benefit if they were then “educated” rather than reprimanded, ignored, or criticized. An ED is not doing his/her job if they can’t explain what their duties are succinctly to an employee and garner respect.
I’d suggest great caution about HR consultants as they can sometimes “side” with a model that is not helpful with experienced staff and in a culture may be unusual but high-functioning and dynamic. Both an ED and consultant can entirely misjudge such a situation.
A lot of the problems pointed to in the above comments (Board has only worms-eye view of the CEO job, Board acting on basis of one staff complaint, boards dodging responsibility) are avoided when Boards get in the habit of doing annual performance evaluations on their ED’s. And use a 360 degree method in getting input from a variety of sources. The evaluation should be a good platform to discuss what’s going well and what needs improvement. And it might be useful for a board to get a consultant to help them through the process the first time or two, so that the Board knows how to interpret the information they’re getting and how to act on it.
And, the ED evaluation will go down better if the Board is also doing an annual self evaluation on its performance with input from staff managers!
A lot of the problems pointed to in the above comments (Board has only worms-eye view of the CEO job, Board acting on basis of one staff complaint, boards dodging responsibility) are avoided when Boards get in the habit of doing annual performance evaluations on their ED’s. And use a 360 degree method in getting input from a variety of sources. The evaluation should be a good platform to discuss what’s going well and what needs improvement. And it might be useful for a board to get a consultant to help them through the process the first time or two, so that the Board knows how to interpret the information they’re getting and how to act on it.
And, the ED evaluation will go down better if the Board is also doing an annual self evaluation on its performance with input from staff managers!
This article is very helpful to me as a Board President. But I felt it should have included some discussion of the Board developing a plan (emergency succession?) about what happens after the relatively sudden departure of an ED. This is often an extremely vulnerable time for organizations, and Boards should have plans in place so that management responsibilities are assigned and performance monitored.
–Anonymous
Excellent point. CompassPoint (one of Blue Avocado’s main sponsors) has published an emergency succesion plan for nonprofits at https://www.compasspoint.org/sites/default/files/documents/520_emergencysuccessionplanmo.pdf. We plan an article on emergency succession planning in a future issue of Blue Avocado. Thanks for the nudge. Jan
This article is very helpful to me as a Board President. But I felt it should have included some discussion of the Board developing a plan (emergency succession?) about what happens after the relatively sudden departure of an ED. This is often an extremely vulnerable time for organizations, and Boards should have plans in place so that management responsibilities are assigned and performance monitored.
–Anonymous
Good article. I have seen plenty of boards who struggle with the decisions to fire an ED even after they have engaged in outright theft or blatantly questionable behavior. More often then not, I listen to excuses from boards that sound something like “Well, you just don’t understand Jane’s management style” or “John does not communicate well but he’s actually a fantastic manager”….
I find some of the ED comments to this article to be interesting because they sound like: “If only I could have controlled the board better, I would not have been fired”… That’s an odd perception for sure because I’m guessing we would all like to control our bosses more, but I doubt many of us actually expect that we can control them.
Boards can certainly be wiley and unpredictable. And, like the one commentor suggested, I would do your homework before going to a new organization as an ED (I suspect most professional managers would do this as a matter of course anyway, or at least they should). Often, I have found that the more the board is isolated from the rank and file, the more difficulty they have in understanding the interpersonal dymanics within the organizations they oversee. For example, sometimes EDs attempt to block direct staff access to board directors. There can be lot of good reasons for doing this. However, I would recommend that instead boards allow a select number of designated staff members to develop a forum where issues can be addressed directly with the board w/o the ED present. This allows the board the prospect of hearing from various interests in the organization without being overly burdened. Also, instead of a single rumor or vendetta about a “bad ED”, they can assess issues over time and come to understand the personalities in greater detail to make more informed assessments.
Unfortunately, I have come to know many EDs who view their boards with varying degrees of disdain, or at least impediments to their goals. Of course, this is not a new scenario. I’m sure CEOs and EDs have been cursing their boards since the beginning of time. However, at the end of the day, they are your boss. They don’t always make good decisions, but I have rarely encountered non-profit boards who knowingly/willfully desire to make poor disciplinary decisions.
I find this article very problematic – perhaps it is because I am in Canada and not the USA and perhaps roles are different in America. In Canada our non-profit management is vastly different and much of this information you have provided, such as strongly encouraging an ED to resign would be considered terms for constructive dismissal in Canada.
As another Canadian reading this post, I hold a different view. It matters not whether an ED is encouraged to resign or constructive dismissal occurs.
The point is to have a dysfunctional ED go when they are seen as not doing their job properly or causing harm to the organization that employs them.
Far too many Board members rely on the beleif that they are “new” or “not on the Board long enough” to make an informed decision.
If Board members are not prepared to assume the responsibility of “their” role to oversee the management of the organization, they have no business being on that Board and should resign.
This is an interesting article and something that is happening in our organisation. With reference to the vote of confidence would an ED be allowed to vote if it concerned them? views?
A question regarding the minutes: What about confidentiality? If the ED is fired, don’t we owe him/her confidentiality regarding their termination? If so, why put the details in the minutes?
First, minutes are private. Nonprofit minutes do not have to be made available to the public, although of course they can be subpoened like anything else.
Second, you may not want to put in gory details, but you also want to show that the board weighed the matter and made an informed decision. For example, you might not to put in the minutes that ED had come to work drunk on several occasions. But you would probably want to say that the board had investigated charges of inappropriate behavior on the job, found them to be true, and had terminated the executive for those reasons. My two cents. Jan
First, minutes are private. Nonprofit minutes do not have to be made available to the public, although of course they can be subpoened like anything else.
Second, you may not want to put in gory details, but you also want to show that the board weighed the matter and made an informed decision. For example, you might not to put in the minutes that ED had come to work drunk on several occasions. But you would probably want to say that the board had investigated charges of inappropriate behavior on the job, found them to be true, and had terminated the executive for those reasons. My two cents. Jan
I am currently anot office manager of a recently granted FQHC. In my time with this company, I have been witness, and victim ( and I do NOT use that word lightly) to knee jerk decisions and actions by the current ED. The ED is a very controlling personality and micromanages everything and anything. The ED has been known to have his longtime favorites and it is heavily knon. Very recently, an amazing COO with 25 years experience in a much larger, world know company resigned due to behavior of the ED. There is no questioning the ED, there is no suggesting to the ED. If that is done,your days are numbered and your life becomes a living hell. The board is heavily guarded from employees and other Providers. I have witnessed illegal happenings from a coworker, a manager of one of our smaller sights. She performed an illegal medication check on an employee, without signed consent or knowledge. Nowhere in our handbook is it staTed this can be done. Not to mention, doing so breaks HIPAA laws. In the State I live in, there is a registry of any scheduled drug a person is prescribed. Providers with DEA licenses have access to this data base to ensure best care to patients . The manager threatened the employee, than illegally used the data base to access the employees medicinal record and threatened her with it. Long story short, the manager that did this took a medical leave of absence, and returned as a manager. The employee she did this to was moved to a different clinic as not to have contact. While this was found out, the ED personally called the employee in which the report was ran, apologized and stated he was ashamed to have such an employee working in the organization. Now, the manager is back, with no disciplinary action.
I, myself, was told to stay home for 2 days after taking a day off, using the company guidelines. Inwas following the orders of my COO and while I was with an ailing family member I worked from home that day. The office had a meltdown of sorts, and somehow it was my fault. After a 2 day investigation, it was found that the only thing I did not do, was tell a counterpart I was taking the day off. Since then, the ED has made a new position, told one person it was hers, the next day gave it to another person. There is no job description and no clear lines where my duties and this other persons duties start and stop.
The ED is short tempered and makes decisions without thinking them through. How does one begin to explain this behavior to the board, without repercussions, knowing that the ED and the board are all very close. It is an unwritten rule, that Noone is allowed to speak to members of the board unless they are asked a question by a member.
This is a small tip of the iceburg. As middle management, the work place has become toxic for other physicians and staff. There is huge potential, but I know my days are numbered. There is nothing I know to do.
The COO has not had her last day yet, and the ED has already promoted a brand new person, who just started, to her position. I did not even know her name as she has been there only a few weeks as a grant writer. She is now the COO and has no management experience. They just fired a wonderful employee today, because she has missed work this week due to having pneumonia. The employee provided documentation as dictated in the employee manual. The employee hadiscount no other disciplinary action on file. We are an At Will state, so it is legal, but not ethical.
I could go on for pages. How do I, as middle management with a target on my back, stop the bleeding? Can I, do I even attempt or do I cut my losses and leave on my terms? This ED, has no idea what HRSA requirements are, scolds me for following and maintaining them. I am at a loss. The work we do is great, but the environment is toxic.
Nonprofit Board Members have a legal fiduciary duty to oversee the operations of the nonprofit. Most nonprofits have adopted a whistleblower policy that provide a process for staff to bring to their attention complaints regarding the management staff’s failure to follow the laws or regulations applicable to nonprofit operations. Under the law, whistleblowers are protected from retaliation. You should review the policies of your nonprofit to see if such a policy exists and use the policy to address your concerns. Additionally, nonprofits are generally regulated by the attorney generals’ office in each state. You can look to the attorney general’s website for further information about nonprofit oversight mechanism
How does one deal with a CEO and board deciding on issuing an insubordination letter to their COO? COO is also a shareholder, one of ten. No termination notice, yet, but enormous amounts of emailing and forced outside HR mediation resulting in intense stress for COO. Power struggle based.