As an executive director, I had a board that I enjoyed working with, but there were friction points. I now realize that the answer to these was simple, I needed a contract.
The truth is that boards aren’t great employers. The board-ED relationship is always a somewhat awkward one. An ED has 9 or 12 or 15 bosses, who are technically supposed to act together, but in reality they don’t always manage to do that. Plus the board composition changes regularly, so the ED’s relationship with them changes as well.
In addition, the ED is also not like other staff members. They are often the only executive level employee at an organization, and they are the public face of the organization. They should be treated like the professional they are, just as if they were the CEO of a corporation. The ED also needs to treat their organization on an executive level. For example, a standard two week notice would be unacceptable in most cases, as that wouldn’t even be enough time to bring in an interim director for the organization.
The answer to developing a good relationship between the board and the ED is starting with a well-developed contract, clearly spelling out the expectations between them. A contract with the executive director brings clarity to the ED’s role. It is developed at a time when the relationship is new and everyone is optimistic about the future. In addition, a contract helps attract strong candidates and retain them by giving them clear expectations.
Here are some of the many advantages an executive director contract can bring to the organization:
- A clear description of the job, and expectations, of the executive director. What will their role be? Hiring a new ED is a good chance for the board to review what the outgoing ED did and adjust accordingly.
- Salary information, as well as benefits. A clear policy up front on salary increases helps both the board and ED know what to expect in the future. This doesn’t need to be specific numbers, just a process for how it will be determined, whether it is a straight percentage basis, or based on performance metrics.
- Potential performance incentives. Performance incentives could be a bonus based on certain aspects of what the ED achieves, or based on longevity. An incentive could also be tuition reimbursement or a housing allowance. Each ED will have a different situation for what they need and want.
- A plan for annual performance reviews. This is an area that frustrated me, and I know it is the same for many EDs. I had to beg for an annual review and even then, it didn’t happen. Feedback is essential, but if it isn’t done, or isn’t done in a coordinated way, it is not helpful. A contract spells out expectations on both sides.
- A process for resolving disagreements between the ED and the board. Planning this out in advance means everyone knows the steps to follow if there is an issue later on.
- Termination options, which include termination with and without cause, severance packages, if any, and resignation details. This is where both sides can determine what is reasonable notice and what the procedure will be. This helps the ED know what the board expects of them, but also gives the board a process if they do need to terminate an ED with cause.
- Confidentiality and non-compete agreements. This section should be flexible enough to allow the ED to take another ED position, but should spell out the expectations of what information the ED may take with them.
Now that you have more information on why contracts will benefit your organization, I have included links below to sample contracts that can help you get started. I am not a lawyer, and I do recommend consulting with a lawyer to help both sides think through the ramifications of any contract you sign.
- This is a well thought out and comprehensive sample executive director contract.
- Here’s another sample with questions to guide you from NASW Oregon.
- A sample contract from the YWCA.
Another article on executive director contracts:
Please let me know in the comments below how having a contract benefits you and your organization, or how it would benefit you if you had one. I look forward to hearing from you!