Exceptional Executive Director

What Makes a Good Executive Director? An Awesome Board!

At some point in planning for executive succession, a nonprofit board will ask, “what makes a good executive director?” Vision, leadership, passion, and patience are common answers offered by board members and executive directors themselves. The most unusual (and perhaps telling) answer, though, is one that will (but shouldn’t) surprise: the board.

Yes, the board itself plays a key role in “making” a good executive director. Executive director is a title used interchangeably with chief executive officer in nonprofit organizations. The board of directors hires, supervises, and fires the leader in that position and, in keeping with most nonprofit structures, only that position. (All other employees typically report to the executive director.) Boards facing a transition in executive leadership might be told that selecting the next executive director is, in many ways, the most important decision and contribution they will make.

Hire Well

Thus, selecting the right candidate is the board’s first step toward making a good executive director. Easy, right? Tap board members with experience in hiring, find someone who brings the same skill set as the beloved incumbent, and voila!

Ha. In reality, executive hiring in a nonprofit organization is complicated — and underestimated, in terms of the time, attention, and resources it warrants. Consider the conditions: volunteer board members already strapped for time and anxious about a gap in executive management; donors reluctant to invest in the mission until new leadership is identified; and an organization facing sector-wide challenges in funding, regulation, client demand, impact measurement, and workforce development.

To hire well in these circumstances, a board must know itself. And its organization. What skills are needed to complement the board’s strengths and both augment and leverage the staff’s capacity? In what direction are we headed and what plans do we have to get there? How will we measure success? What does a leadership change mean for our sustainability — or viability? The mission, strategic direction, benchmarks, and culture established by the board — as well as the resources it cultivates – will have immediate and ongoing impact on the effectiveness of any executive director.

As a result, boards must invest time into assessing the organization’s leadership needs now and looking forward, not in the past as might be tempting. Hiring criteria must be aligned with the organization’s current stage of development, strategic priorities, and culture (see also A Board Members Take on Board Recruitment).

In recently guiding an established organization facing a financial crisis through an executive search and transition process, I helped the board set out to replace its long-time incumbent leader, who was a recognized expert in healthcare and reluctant nonprofit executive director. After much deliberation, the board determined that the ability to cultivate donor relationships and experience as a nonprofit executive were more important than industry experience, so the job description was revised accordingly. Upon meeting final candidates – both visionary, passionate, and dynamic leaders – the board weighed coveted fundraising and nonprofit leadership against industry and business management experience. Recognizing that the business model needed revision and the culture of the organization would reject an “outsider” who didn’t understand the nature of healthcare today, the board chose the industry expert who would need support in fundraising and understanding nonprofit operations.

Provide Support

The board that hires reactively does an immediate disservice to the organization and sabotages the effectiveness of even the most visionary and committed executive director. The board that hires well, then hands the office keys to the new executive director and disappears is equally detrimental.

Whether the executive director is new or seasoned, from the field or not, she/he needs board support. The board/executive director relationship is a critical partnership in which both parties can leverage each other’s strengths while executing their own – not each other’s — responsibilities. No executive director brings experience in all aspects of the job or industry or culture or something, so it’s the board’s job to a) ensure expanded expertise is available around the board table, and b) step up to share it.

The new executive director of a human service organization recently informed me of his frustration with the board that hired him only six months earlier. While the board had been forthcoming about some of the organization’s challenges and why he was the right leader to tackle them, he was surprised by the board’s disengagement. He was assured his critical eye toward financial management, staffing, and planning would be welcome, but found board members to be unresponsive to pleas for support in enforcing collection policies, changing the staff structure, and revisiting strategic goals. As he explained, “I don’t mind bailing water from the Titanic, but I’m not willing to do it while the board is sitting on the beach.”

Evaluate Regularly (and Effectively)

Even in the best of circumstances, when a board works optimally with its stellar executive director, performance appraisal is essential. Despite popular belief that executive evaluation is a rating of what a leader does well and needs to improve, such information is a mere by-product of what an effective evaluation process can offer. A board that has crafted strategic goals for the organization and performance goals for the executive director can use the executive evaluation to ensure proper alignment of those goals, which is essential for organizational success.
Unfortunately, some boards miss that opportunity and leave their executive directors floundering in an operational vacuum. When a board chair recently complained about an executive director whose dashboards and reports failed to provide sufficient information to the board, I realized the board had failed to incorporate its strategic plan into the organization. The executive director was investing extraordinary effort into preparing comprehensive data, but it lacked meaning – or context — for the board. Even as they demanded increased effort in enhancing and driving operations, they couldn’t relate her activities to organizational priorities or outcomes. Their growing criticism of their executive director was really a reflection of their own failure to govern.

Executive performance evaluation also affords an opportunity to protect the executive director. How many nonprofit executives are tapped for every ounce of energy, passion, and generosity they can muster to advance an organization’s mission? Regular assessment of the leader and her or his job can prevent unnecessary burn-out. It’s the board’s job to recognize when its executive director is being asked to perform more than what’s reasonable in one job.

The board also must recognize when the organization has outgrown its executive director. Sometimes market forces require a change in the business model or direction of an organization that the chief executive is not equipped to lead. Rather than let the previously effective leader struggle or fail, an effective board steps up to facilitate an effective transition or solution.
Sure, there are numerous characteristics shared by effective executive directors. They likely give their all, play to their own and others’ strengths, and understand their businesses, teams, and clients. Still, behind – or, better yet, beside – each one is an extraordinary, engaged board that hired right, partners with, and effectively evaluates its chief executive.

Sonia J. Stamm

Sonia J. Stamm is Governance Consultant at BoardEffect. Since almost our inception, she has shared a best practice perspective on governance with our team and clients, partnering to guide boards toward optimal implementation of our software. As founder and principal of a nonprofit leadership consulting firm, Sonia supports the evolution of mission-based organizations through her work in board development, leadership transition and succession, and organizational effectiveness. A seasoned facilitator, trainer, and consultant, she enjoys guiding boards and organizations through critical junctures in their development.