Firing the Executive Director

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.

Jan Masaoka is editor of Blue Avocado. She has been an executive director (of CompassPoint Nonprofit Services), has been on a board that has fired its exec, and has consulted to many boards and executives struggling with the issue.

See also in Blue Avocado:

Comments (21)

  • Anonymous

    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.

    Feb 22, 2011
  • Anonymous

    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.

    Dec 03, 2011
  • Anonymous

    Boards need to exercise care in evaluating and/or investigating the executive director's performance issues, especially when the issues come from a staff member. Too often the staff have a "worm's eye view" of the CEO's job and have no real concept of the many-faceted, complex set of responsibilities of an executive director. A staffer may try to sabtoage his/her CEO by complaining to the board about "issues" may/may not be of critical importance (that is, not criminal conduct, malfeasance, unethical behavior, etc.). Too often a board has limited resources for separating the wheat from the chaff, the legitimate complaints from the peevish discontents of a staff member. Boards are often conflict-adverse and think that everyone should be one big happy family, so any sign of friction, personality conficts, whatever, send them into executive session to discuss the CEO's "performance." Too often the lack of HR experience among the board members and their failure to consult with HR professionals lead them to take actions that are not supported by evidence. Therefore, I would add to this suggestion that the board, when concerned about the CEO's performance, include an HR professional as well as an attorney versed in employment law in the process to get an unbiased, professional opinion of how best to monitor the CEO, how best to interpret staff or client issues, etc. For example, I worked as a consultant to an organization that had fired the CEO based upon the "complaints" of a single staff person who was under going progressive discipline for performance-related issues. This single staff complaint -- too much work to do, CEO always in meetings or on the phone, CEO's expectations are too high, etc. -- was the basis for canning the fairly-long tenured and successful CEO. Unfortunately, the board forgot that the meetings the CEO was "always" in were board and board committee meetings, meetings with potential donors and partner agencies, etc. The phone calls were work-related. This single staff complaint (from 1 of 30 staffers) was not statisically significant in the overall operations of the organization.The complainant was fired shortly after the CEO's departure because this person's performance shortcomings nearly led to program failure. An HR professional might have helped the board to put all of this into perspective. Perhaps it was time for the CEO to go, but the board could have taken a longer view of the situation without throwing the organization into the chaos that was caused by the CEO's abrupt departure, the sudden shift in staff responsibilities during a period of peak activity, and the near-failure of a major program. And then there was the CEO's wrongful dismissal lawsuit to deal with....

    Feb 22, 2011
  • Anonymous

    It does sound like your board gave too much weight to a single squeaky wheel. But the situation at my nonprofit was one in which the board failed to take seriously strong concerns expressed by virtually the entire staff regarding the strategic direction that the former executive director was pursuing, as well as his lack of management skills. Too often, rather than following up with questions to try to understand what was really going on, they chose to keep their heads firmly rooted in the sand. Of course, this was precisely the sort of unengaged "rubber stamp" board that had been recruited all along. In fact, it wasn't until our largest donor intervened that the Executive Director finally resigned. Unfortunately, it may be too late to keep the organization afloat.

    Feb 22, 2011
  • Anonymous

    Boards have to be very careful with the current vogue of 360 assessments. Staff often do not understand the CEO's role, and without a trained intermediary/facilitator managing the assessment, the evaluation can go badly wrong. Also, if there is long-term staff, and they have personal relationships with board members (which can often happen in grassroots organizations), a new CEO can get tanked by staff talking to board members out of school, especially if the CEO is leading change in the corporate culture and business practices. I was a victim of that scenario. The organization continued to malfunction after I left until another crisis came along.

    Feb 22, 2011
  • Anonymous

    So, did you sue the organization?

    Jun 24, 2011
  • Anonymous

    This is currently happening to me. A board member I currently work with has a personal relationship with a founder that I'm having a hard time communicating with. This founder wasn't playing an active role in the organization until about a month ago, but has been complaining about me for some time. The board is threatening to take away what little stipend I have and want to discuss my future with the organization at a later date. How do I appropriately handle this situation as an executive director?

    Oct 03, 2013
  • Anonymous

    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!

    Feb 22, 2011
  • Anonymous

    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.

    Feb 22, 2011
  • Anonymous

    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.

    Feb 22, 2011
  • Anonymous

    The Board/ED relationship is incredibly difficult to navigate. (Just consider the number of books, articles, and consultants on the subject.) It's not rocket science but it is a wierd partnership with the ED being one person and the Board being a mix of 10-25. Boards are funny animals with cultures that can change with the addition of one new Board member. I would bet most EDs have experienced at least one Board meeting where they became the focus of a Board "feedy frenzy". I believe it comes down to ED competence, the make-up of the Board, the Board Chair, style, personalities, egos, respect, and the willingness for all to continually engage in open, professional dialogue. If there is simmering discontent among Board members, I would bet the ED feels it. (A good indicator would be "needing" a glass of wine after meetings.) If left unchecked, Board members will evenutally vent to friends in the community, the ED will vent to staff and collegues, and the agency and its clients will pay the price. It is the responsibiltiy of both the Board and the ED to openly discuss the these types of issues as professionals, a difficult but worthwhile task that is can to result in a stronger partnership or a timely separation.

    Feb 23, 2011
  • Anonymous

    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!

    Feb 23, 2011
  • Anonymous

    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

    Mar 02, 2011
  • Excellent point. CompassPoint (one of Blue Avocado's main sponsors) has published an emergency succesion plan for nonprofits at www.compasspoint.org/assets/520_emergencysuccessionplanmo.pdf. We plan an article on emergency succession planning in a future issue of Blue Avocado. Thanks for the nudge. Jan

    Mar 02, 2011
  • 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.

    Mar 02, 2011
  • Anonymous

    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.

    Jun 08, 2011
  • Anonymous

    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.

    Jun 11, 2011
  • Anonymous

    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?

    Oct 28, 2011
  • Anonymous

    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?

    Nov 15, 2011
  • 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

    Nov 15, 2011
  • I was fired only after 4 months due to 2 board members appointed by the chief of the Cherokee Nation with personal animosities towards me over petty issues by a HR staff person who also didn't like me and wanted me to leave voted 4-1 of no confidence. They blamed it on a night stay after a convention using the company credit card for $70 that I turned in a receipt and asked if I needed to pay when we reviewed purchase receipts two weeks later... they said to ask chair of board. I held the check and was confronted about it by chair and told to pay a few weeks later then accused of not telling the truth when I had not changed the date-accused of "post dating" check... Other "petty" issues by this HR staff in which the two members refused to call her in to question her-all one sided. wrongful dismissal... Also, tribal councilman and chair spoke to chief immediately of the action by the board and no action by the chief.....

    Jul 10, 2013

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