The Right Relationship: The Executive Director, the Chairman of the Board, and the Board of Directors
Whether you are a business or a nonprofit, proper corporate governance is essential to successfully executing a shared vision. Thus, the long-term success of a nonprofit organization can be largely affected by the relationship between its chief executives and the board of directors. These relationships, however, can only function properly if each role is clearly defined.
In an effort to find the most efficient and effective balance, this resource explores the relationship between the nonprofit executive director, chairman of the board of directors, and the board of directors.
Visionary versus Implementation
The difference between the board of directors and the executive director is vision versus implementation. With its distance from the day-to-day operations, the directors provide the vision for the organization while reviewing financial statements, insurance documents, bank documents, and relevant programmatic updates prior to each board meeting. The executive director, however, is responsible for implementation of that vision. General responsibilities of the two parties are outlined below:
Board of Directors: Vision and Oversight
- Create, review and oversee a mission statement that captures the organization’s goals, beliefs, and primary constituents. This is the primary role of the board of directors. Without the board’s direction, a management team might lack leadership and a specific vision to execute.
- Selection and support of the executive director. A board connects with and directs the organization through the chief executive. With this in mind, the board focuses on the hiring, ongoing support, and annual performance review of the executive director.
- Ensure adequate financial resources and provide financial oversight. One of the board’s most important responsibilities is to secure adequate resources for the organization by raising funds, either from their own resources or outside sources. The board also assists in developing and approving the annual budget and strategic plan, also ensuring sufficient financial controls are in place.
- Ensure legal and ethical integrity. The board is ultimately accountable for realizing legal standards and ethical norms. It should be noted that much of the board’s direction should come from the by-laws, which should be reviewed annually.
- Enhance the organization’s public standing. The board should clearly articulate the organization’s mission, accomplishments, and goals to the public in order to gain support from its constituents and outside parties.
Board committees can serve as a bridge between the board’s vision and staff implementation. To assist in this effort, committee membership often includes one or two staff members. The executive director should communicate with the committee chairperson to discuss its activities and prepare for its board presentation. See the Giersch Group's resource on Forming and Using Committees Effectively for more information on the role of nonprofit board committees.
Executive Director: Vision Implementation
- Provide information and board support. The director must act as a liaison between the staff and the board. Providing updates to the board on programmatic activities will assist the board in making informed visionary decisions. If the board believes it important for the executive to serve on the board, the executive director should serve as a non-voting member.
- Oversee program and product/service delivery. The executive director must oversee the daily delivery of the organization’s programs. This includes managing staff and volunteers to guarantee the best product/service delivery.
- Creates the most effective strategy to achieve the vision of the Board of Directors. The translation of the vision into a strategy with actionable goals and activities allows for both management and the board to regularly monitor the organization’s progress, evaluate opportunities, and adapt as the market changes.
- Ensure financial and facilities management. While the board of directors holds the legal fiduciary responsibility, it is the executive director that must ensure day-to-day activities do not over-leverage resources or opportunities.
Just as the executive director is charged with day-to-day activities of the nonprofit, the chairman is charged with month-to-month activities of the board of directors. As a result, the board chair and executive director work together often. As a leadership team, they have the opportunity to build a relationship with each other, the board, staff, and other stakeholders. This requires a well-defined and trusting relationship between both individuals.
Chairman: Vision and Board Implementation
- Oversees board and executive committee meetings.
- Works in partnership with the Executive director to make sure board goals and resolutions are carried out.
- Calls special meetings if necessary.
- Assists executive director in preparing agenda for board meetings.
- Sends the board meeting agenda in advance.
- Assists executive director in conducting new board member orientation.
- Coordinates Executive director hiring and annual performance evaluation.
- Works with the executive committee and executive director to recruit new board members.
- Acts as an alternate spokesperson for the organization.
- Periodically consults with board members on their roles and help them assess their performance.
Finding a Balance: Strong Board and Strong Executive Director
A very strong board will often interfere with an executive by getting too closely involved with the day-to-day affairs of the organization. Strong executives will often flee from this type of board in search of more autonomy and freedom. On the other hand, a very strong executive often controls the board and may even choose the board members. In this case, the board may find itself at the service of the executive. Similarly, a strong executive may take the energy out of the board by making them feel like they are simply rubber-stamping the executive decisions.
Often times, the founding party of the organization carries the most strength. If the organization was started by a strong executive director, the board may experience high turnover and the executive may feel the board is a hindrance to mission implementation. If the organization is started by a strong board member, the executive director may be constantly changing, causing the founding chairman to feel that no one can execute properly. In either case, you end up with Founder’s Syndrome.
The best organizations find a balance between the strength of the board and the strength of the executive director. It has the highest quality visioning and strategic planning at the board level, with a board of directors that is engaged, focused and committed. This also requires excellence in implementation, with an executive director that is energetic, mature and of high integrity. In other words, the best organizations have a strong board and a strong executive director.
Measuring Success
There are several key indicators that can help your organization determine whether it has a good balance between the board and its executive.
- Frequency of meetings. The amount of time a board meets is often an indicator of the strength of the board vis-à-vis the executive director. A board that meets monthly can hardly avoid micromanaging and having a heavy hand in the organization. On the other hand, a board that meets less than four times a year is probably not apprised of the current state of the organization. We find that a good number of meetings is 4-6 per year, i.e., quarterly or every other month.
- Currency of the by-laws. The by-laws lay out the limits and scope of the board’s involvement of the organization. The Giersch Group found that in almost every case where the board and executive relationship is out of balance, no one is familiar with the by-laws.
- Tone of the board meetings. The balance between the staff and board leadership can often be ascertained by watching a board meeting. If the executive director has set the agenda, leads the meeting, and does more than 40% of the talking, you likely have a very weak board. On the other hand, the executive director may be given little opportunity to talk or may not have even been invited. The ideal board meeting contains a meaningful report from the executive director and the chairman of the board, both of whom have had a hand in the agenda along with the executive committee. The remainder of the meeting is made up of committee reports given by board members who head those committees.
- Performance reviews of the executive director. The board should review the executive director at least once a year and provide feedback. This information should not be a surprise to the executive director, as a good board will provide him/her with constant feedback.
Articles for Further Reading
- Board/Executive director Tensions. Governance Matters. http://www.governancematters.org/data/org/56/media/doc/4695_gm_bl_board-edtensions.pdf
- Hiland, Mary. The Board Chair-Executive director Relationship: Dynamics that Create Value for Nonprofit Organizations. Journal for Nonprofit Management, 2008. http://www.supportcenteronline.org/pdfs/journal-1-2008/board-chair-executive-director-relationship-hiland-scnm-journal08-2.pdf
- Brody, Weiser, Burns. Nonprofit Crises, Executive Leadership, and an Assessment Process to Help Restore an Organization’s Footing. September 2003. http://www.bwbsolutions.com/pdf/NonprofitCrises.pdf
