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, _________
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.
____________________________________ Chair, Board of Directors
Thanks to Mike Allison, Tim Wolfred, and volunteer attorney Michael Schley for help with this article.
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. Views represented in Blue Avocado do not necessarily express the opinion of the publication or its publisher.