Executive Director: When Is It An Appropriate Title?

By Eugene Fram

An Executive Director title compared with a President/CEO title for a nonprofit’s chief operating executive is a debate that still pervades the nonprofit governance discussions. Following is a list of situations when the Executive Director tile is appropriate.

• When the nonprofit is in a start-up stage, and the board’s management direction, advice, or micromanagement style is needed to stabilize the organization.
• When a chief executive does not have significant management background.
• When the chief executive and the board agree that the chief executive should not have complete internal management responsibilities.
•  When the chief executive does not have significant responsibility for fund-raising or developing community/industry relationships.
• When the organization’s bylaws require a volunteer to be President/CEO and a board chair is not appointed. (However, the volunteer should understand the potential extra liability of carrying the CEO designation.)
• When the chief executive is engaged under a trial contract.
• During a period when a search committee may be looking for a new senior executive and the board needs to pay closer attention to operating issues.
• When the chief executive does not want to be a board member because he/she wants to advocate for the organization’s mission and not be constrained by fiscal concerns. Some CEOs find value in acting essentially as an outside consultant would act.  (Note: Some state nonprofit corporation laws do not allow a staff member to hold  a  board position, when  he/she received a salary from the organization) .

With many nonprofits, the Executive Director title becomes “standard,” and the organization often lacks the leadership to grow.   Consequently, the organization fails to meet its potential and to attract managers who can better lead the staff to improve client service.

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