Nonprofits need a functional relationship between the board of directors and the executive director; the board sets the policy and direction while the executive director manages the daily activities and ensures the board's vision is met. Other director-level employees don't report directly to the board, but they often work closely with board members on committees and in project execution.
Role of the Board
Nonprofit boards tend to be actively involved in the organization's strategic planning and overall governance. Board members set the budget, fundraising goals, avenues for growth and the organization's bylaws. They are involved with staff management for only one person, the executive director, who typically reports to and is evaluated by the board. Many boards require members to serve on leadership committees, which often include department directors and staff, such as a fundraising, financial or programming committee. They interact closely with the staff, but they don't manage any employee but the executive director.
Executive Director and the Board
The board develops the job description for the executive director and has the responsibility of hiring or firing him. The job description typically includes staff management, creating a clear chain of command. Department directors report to the executive director, who reports to the board. This keeps board members funneled through a single person: the executive director. The executive director must manage this relationship so the board members don't start calling department directors with requests, complaints or other issues. Also, he should clearly define the lines of authority regarding committee meetings.
Where Directors Fit In
Department directors follow the policy set by the board to forward the mission of the organization under the guidance of the executive director. They typically have set roles, such as fundraising or programming. These directors create agendas for committee meetings and ensure the volunteers they work with, including board members, feel appreciated. In many nonprofits, department directors attend board meetings and provide reports, answering questions or tweaking plans based on the board's suggestions.
Collaboration is Key
Although department directors don't report to board members, it's often in their best interests to accommodate board requests whenever possible. A board member can't fire the employee directly, but she can request that the executive director fire the employee; she can also move that the board terminate the executive director if he doesn't comply. Directors can help avoid this negative cycle by including board members as much as possible, respecting their ideas, and following the proper chain of command if abandoning an idea from a board member, such as asking the executive director to get involved in the conversation or requesting a majority vote from a planning committee.