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Corrected Version

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

By: Eugene H. Fram.     

Yes, if the organization has the following traditional structure:

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

Volunteer Board Chair with Presidential title

Executive Director/CEO with Responsibility for all operations

Senior Manager Division A

Senior Manager Division B

However this structure can be confusing to persons in the nonprofit arena and persons outside of it. 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 implementing board operational policies/strategies. 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
Full-time President/CEO With Full Authority for Operations
Vice President Division A
Vice President Division B