Can A Nonprofit Organization Have A President/CEO & An Executive Director?

By: Eugene H. Fram

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Yes, if the organization has the following structure:

Board With A Volunteer Chairperson
President/CEO With Full Authority for Operations
Executive Director for Division A
Executive Director for Division B

However this structure can be confusing to persons in the nonprofit arena. The executive director should have final authority for all operational matters related to the organization, except those designated for the board in the bylaws. For example, pensions plan changes.

The big question is who carries the CEO title. Some nonprofits, in their early stages, have a volunteer, part-time, President/CEO and an operational Executive Director. This signifies the volunteer, representing the will of the board, can have final authority in all daily and policy issues. This is not a good structure because the CEO title might lead to the volunteer having liabilities that other board members don’t have.

In addition, it also can lead to long term board micromanagement, a culture that is difficult to change. I have seen a number of mature nonprofits (budgets, more than $1 million & some with 50+ employees) that are unnecessarily encumbered by board mandated complex processes. These some times are supported by weak executive directors who don’t want the substantial responsibility that comes with the president/CEO title. As one remarked to me, “I want to provide alternatives and let the board decide.” What he left out was the subtle inference, if the decision is a bad one “I can say that the board told me to do it.”

From clarity purpose for those in and out of the nonprofit arena, the following structure, based on my experiences, is best:*

Board With A Volunteer Chairperson
President/CEO With Full Authority for Operations
Vice President Division A
Vice President Division B

Board Members: Try it and you will like it. Thousands of nonprofits have. A great deal of the success of the model develops on bases of organizational trust and the willingness of the senior manager to accept the managerial responsibility involved.

Source: *More in: “Policy vs. Paper Clips,” Third Edition, 2011. http://amzn.to/eu7nQl Also see: http://nd.alliance1.org/content/what%E2%80%99s-name-benefits-presidentceo-title