The Nonprofit FAQ

How should the board and the executive director relate?
For more on this topic from the Minnesota Council of Nonprofits, visit the http://www.mncn.org/info/basic_gov.htm#board%20role%20&%20resp">board basics section of the website at http://www.mncn.org.




"No single relationship in the organization is as important as that
between the board and its chief executive officer. Probably no single
relationship is as easily misconstrued or has such dire potential
consequences. That relationship, well conceived, can set the stage for
effective governance and management." John Carver, Boards that Make a
Difference
, 1990. (Order http://www.amazon.com/dp/0787908118/?tag=internetnonprofi">Boards that Make a Difference from Amazon.Com; a royalty will be paid that helps support this service.)

The relationship between the Board of Directors and the Executive
Director is one of the most written about topics in nonprofit
literature. This document summarizes some of the thoughtful material
that has been written on this subject, including the book cited above
and information from BoardSource (http://www.boardsource.org) and
Independent Sector (http://www.independentsector.org). For more on the subject and others, please see http://www.mncn.org/info/basic_gov.htm#board%20role%20&%20resp">board basics at the website http://www.mncn.org.

As a general rule of thumb, it is said that in a nonprofit organization,
boards primarily govern and staff primarily manages. This means that a
board provides counsel to management and should not get involved in the
day-to-day affairs of the organization. Confusion and tension can arise
when this rule is put to use practically, because the distinction
between management and governance is not absolute. In order for this
rule to work effectively, each party in this relationship needs to
understand its own responsibilities and those that fall in the other's
purview, and the way in which the board and staff conduct their business
needs to reflect this understanding. Clear expectations for the board
and the director need to be established and maintained, because a board
that is overly active in management can inhibit the organization's
effectiveness.

A nonprofit's Board of Directors has very specific duties that are
distinct from those of the Executive Director. Directors have fiduciary
responsibilities, and they
are required to act within their authority primarily for the
organization's benefit. Directors do not have power or authority
individually. A board's decision-making ability lies in its group
structure. While at times an individual board member may become
extensively involved with one particular program area and be working
with staff, this is usually temporary, and information regarding the
need for increased attention by that board member should be relayed
regularly to the full board.

(The Minnesota Attorney General has a useful paper on http://www.ag.state.mn.us/charities/charDuties.html">fiduciary duties on the website at http://www.ag.state.mn.us/. -- Ed.)

Nonprofit boards generally have the duties of selecting and working with
the executive director, amending bylaws, approving the annual budget and
long-term strategic plans, and ensuring its own succession. The board
often establishes committees to accomplish its activities, including
financial, personnel, fundraising and planning functions. Through such
committees, the board assists management in policy formation and
strategic planning. While nonprofit staff may conceive, develop and
implement the organization's plan, the board will often monitor the
process and provide counsel. However, it is often true that in smaller,
younger nonprofits with limited staff positions or experience, or in
more grass-roots type organizations, board duties may include more tasks
typically associated with management.

Ultimately, the ideas and actions of the Executive Director, perhaps
more than the will of the board, will influence the nature of the
dynamic that characterizes this important relationship. Because it falls
to the Executive Director to help determine which issues the board will
address and to assemble the information that shapes the discussion, this
individual can guide the board towards a true governance role. The
following are three specific methods that the Executive Director can
take to help the board govern more and manage less:

  1. Use a comprehensive strategic plan that has been developed in
    conjunction with the board, and supplement it with regular progress
    reports. This can be a useful tool for the board as it develops its own
    annual work plans, and will keep the board's sights focused on the long
    term goals and mission of the organization. Regular reports based on
    this plan will keep board members appraised of progress toward
    organizational goals, and provide part of the basis for evaluation of
    the executive director.
  2. Provide the board with relevant materials before board meetings, and
    explain why the materials are coming to the attention of the board. Let
    board members know how specific agenda items relate to the
    organization's larger mission, and what kind of action or discussion is
    desired of the board on each item.
  3. Facilitate board and board committee discussions so that the board stays
    focused on the larger issues. Refer to set policies that define the
    limits of the board's decision-making power, and strive to engage the
    board in a dialogue among themselves that leads to consensus-building.



For more information contact:
Minnesota Council of Nonprofits
2314 University Ave. #20
St. Paul, MN 55114
Phone: 651.642.1904
Fax: 651.642.1517
Greater MN: 1.800.289.1904
email: [email protected]


The Free Management Library provides additional information.
See
"Role of the Chief Executive" at
http://www.mapnp.org/library/chf_exec/chf_exec.htm and
"Sustaining a High-Quality Relationship Between Board Chair and Executive
Director" at
http://www.mapnp.org/library/chf_exec/ed_chair.htm






Revised 8/11/99, 1/18/00 -- PB & CM; 1/30/05 -- PB