Your Executive Director
Posted on Wednesday, June 21, 2023
ShareWhether you call them the Executive Director, CEO, President, or President/CEO, the individual that leads your organization in the daily operations plays a significant role in the success of the organization. It is important that your board members understand their relationship with them.
BoardSource’s Ten Basic Responsibilities of Nonprofit Boards includes three specific duties related to the Executive Director.
- Select the Executive Director
- Support the Executive Director
- Evaluate the Executive Director
In selecting the Executive Director, the board must review the organization’s current strengths and needs. Depending on where the organization is in its lifecycle, it may need a leader that is experienced with fundraising or it may need someone that can evaluate and develop programs. Prior to hiring the Executive Director, the board needs to establish organization priorities and create a list of required skills and clear expectations of service.
It is not uncommon for the line between the board and Executive Director to become blurred. But there should be a clear segregation of the duties between the two. The overall functions of the organization can be summarized as follows.
Strategic planning
- Board is responsible for strategy and making sure the organization is moving towards its goals and vision
- Executive Director is responsible for carrying out the plan
Hiring
- Board hires only one employee, the Executive Director
- Executive Director hires and manages the staff
Governance
- Board has fiduciary duties
- Executive Director serves as a liaison between the board and staff
Financial responsibility
- Board ensures adequate financial resources and manages funds effectively
- Executive Director carries out the day-to-day and ongoing financial expenditures
Fundraising
- Board participates in fundraising efforts and providing financial support
- Executive Director oversees the logistics and actual efforts to fundraise
Most Executive Directors have staff to assist in the different areas but it is their responsibility to ensure proper oversight of the staff. In order to be effective, the board and the Executive Director must work together. The relationship between the board, especially the board chair, and the Executive Director is critical to the overall success of the organization. Having a clear understanding of the responsibilities of each is the basis of this relationship.
The board of directors is also responsible for supporting the Executive Director. This can be done in various ways from attending all board meetings, being on time and prepared to introducing them to community leaders, providing constructive feedback, and encouraging continued education and development.
As part of supporting the Executive Director, the board should annually evaluate the Executive Director. This should be a time to review goals, support personal growth, reward them for work well done, and prevent any ongoing poor performance. The evaluation can be done in a variety of ways but however it is performed, there needs to be (1) a clear understanding of the criteria being used, (2) all board members should participate, and (3) the results should be reviewed with the Executive Director. Executive Directors wear many hats so be sure to include feedback on all of the different parts of their position – administration, board relations, communication, public relations, financial management, fundraising, and both organization-wide and personal goals.
Finally, there may come a time where the organization is faced with replacing its leader. It is important to maintain an active board that includes succession planning in its strategic planning process. Succession planning is not just for retirement and should start the day your Executive Director is hired. Your organization should also have an emergency succession plan in place for any unforeseen circumstances in which the Executive Director cannot fulfill their duties. The key is to ensure a smooth transition in leadership, whether it be a temporary absence or permanent.
Contributed by: Carrie Minnich, MAcct, CPA | Partner | DWD CPAs & Advisors
Posted in Mission Minded Nonprofits
Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.