{"id":69535,"date":"2015-04-08T18:12:52","date_gmt":"2015-04-08T22:12:52","guid":{"rendered":"https:\/\/joangarry.com\/?p=69535"},"modified":"2022-06-29T18:15:15","modified_gmt":"2022-06-29T22:15:15","slug":"executive-director-contracts","status":"publish","type":"post","link":"https:\/\/joangarry.com\/executive-director-contracts\/","title":{"rendered":"10 Big Reasons Your Executive Director Needs a Contract"},"content":{"rendered":"<p>True Story #1: An entire executive committee threatened to resign, fed up with the performance of the Executive Director. I walked them back from the ledge with a simple question: \u201cHave you ever given her a performance review?\u201d<\/p>\n<p>Uh. No.<\/p>\n<p>Wow.<\/p>\n<p>True Story #2: \u201cYour board just fired you? What did your contract say about termination?\u201d<\/p>\n<p>Uh. What contract?<\/p>\n<p>Wow.<\/p>\n<p>My friend <a href=\"http:\/\/www.lambdalegal.org\/about-us\/staff\/kevin-cathcart\" target=\"_blank\" rel=\"noopener\">Kevin Cathcart<\/a> is a long time (lifer?) E.D. and a man with a mission when it comes to contracts. My two stories are emblematic of the dozens he has heard through the years. (Full disclosure: Kevin is an attorney and may have a dispositional fondness for contracts.)<\/p>\n<p>So how exactly does a nonprofit organization benefit from Executive Director contracts?<!--more--><\/p>\n<h3>MYTH BUSTERS: EXECUTIVE DIRECTOR CONTRACTS<\/h3>\n<p>Let\u2019s start with the four main myths:<\/p>\n<ul>\n<li>E.D.\u2019s are lucky to have their jobs and thus don\u2019t need contracts.<\/li>\n<li>E.D.\u2019s should be treated like all other staff \u2014 they are at will employees.<\/li>\n<li>This is a nonprofit. We\u2019re like family. Contracts break the familial bond.<\/li>\n<li>We\u2019ve never done this with any previous E.D. so we should not set a precedent.<\/li>\n<\/ul>\n<h3>JOAN GARRY: MYTH BUSTER<\/h3>\n<p>These reasons are nonsense. First of all, while E.D\u2019s are certainly lucky to have the opportunity to do meaningful work, they can also have the right to basic employment agreements. These are not mutually exclusive.<\/p>\n<p>It\u2019s important to remember that Executive Directors are NOT like all other staff. They are leaders, outward facing. The resignation or termination of an institutional leader is an entirely different kettle of fish as it relates to the stability and the credibility of the organization.<\/p>\n<p>As for nonprofits being \u201clike family,\u201d I\u2019m sorry. It\u2019s just not true. We do have a unique bond that comes from the shared experience of trying to move mountains. But change at the top is a huge thing for an organization and there must be real structure and stability in that kind of change.<\/p>\n<p>Most importantly though, <strong>good ideas are worth doing \u2014 <\/strong>regardless of whether or not they have been done before.<\/p>\n<p>So why are E.D. contracts such a good idea? Here are ten reasons.<\/p>\n<h3>TEN REALLY GOOD REASONS EXECUTIVE DIRECTORS NEED CONTRACTS<\/h3>\n<ol>\n<li style=\"padding-bottom: 12px;\"><strong>Industry Standard. <\/strong>If you have more than 5 employees and a budget over $500K, it is the right and responsible thing for a board to do and has become the industry standard in the nonprofit world.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Succession Planning. <\/strong>A contract includes notice provisions. This precludes your leader from leaving too quickly (for whatever reason) and leaving you leader-less with no clear plan. VERY destabilizing. Risky. (For more on this, here are <a title=\"The Five Keys to An Effective Succession Plan\" href=\"https:\/\/joangarry.com\/effective-succession-plan\/\" target=\"_blank\" rel=\"noopener\">the 5 keys to effective succession planning<\/a>.)<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Feedback.<\/strong> Contracts set a schedule for an annual review. All employees are at their best with regular (this means on time) feedback and clear goals for the coming year.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Risk Management. <\/strong>Contracts minimize the possibility of litigation. Maybe you think the reverse is true. Wrong. Ambiguity leads to litigation faster than differing interpretations of a legal document.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Dispute Processes. <\/strong>Contracts define a process for hammering out disagreements. Wouldn&#8217;t it make all the sense in the world to have that process in place BEFORE there are disagreements?<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Recruitment.<\/strong> Contracts help attract the best possible candidates for the leadership role. Let\u2019s say you want to leave a large corporate job and step into the unknown. A contract is a security blanket and an illustration of trust.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Clarity.<\/strong> Contracts clearly define the role and expectations.A solid contract goes further than a simple job description.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Stability.<\/strong> Transitions hurt organizations, regardless of the caliber of the leader. The work is too important \u2013 there needs to be an intentional transfer of power.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Retention.<\/strong> Contracts honor the leader and build trust with the board. A contract does not diminish trust in any way. In fact, the details in a contract keep things clear and clarity builds trust. Trust drives retention \u2013 remember: good Executive Directors get good job offers.<\/li>\n<li style=\"padding-bottom: 12px;\"><strong>Maturity.<\/strong> Contracts are evidence of a grownup leadership in a grownup organization. A grownup organization values its leadership and creates real mechanisms for accountability.<\/li>\n<\/ol>\n<p>Here\u2019s one more piece of compassionate truth telling:<\/p>\n<p style=\"text-align: center;\"><strong><em>Boards Are Terrible Employers.<\/em><\/strong><\/p>\n<p>This is a general statement and there are plenty of exceptions.<\/p>\n<p>But it is my firm belief that this part of the board\u2019s responsibility falls by the wayside far too often. Yes, board members are busy and volunteers. But this one \u2014 <a title=\"How a CEO and Board Chair Can Build an Amazing Partnership\" href=\"https:\/\/joangarry.com\/ceo-board-chair-relationship\/\" target=\"_blank\" rel=\"noopener\">the management and supervision of your senior executive<\/a>\u00a0 is one of the most important roles you have.<\/p>\n<p>And a contract with your senior executive makes that job easier, not harder.<\/p>\n<p>Sold? I really hope so. At the very least, consider circulating this article before the next <a title=\"How to Build an Effective Executive Committee\" href=\"https:\/\/joangarry.com\/effective-executive-committees\/\" target=\"_blank\" rel=\"noopener\">executive committee<\/a> or board meeting and have a real conversation about it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s not just good for the Executive Director. So how exactly does a nonprofit organization benefit from Executive Director contracts?<\/p>\n","protected":false},"author":4,"featured_media":69654,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15,16,37],"tags":[],"class_list":["post-69535","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-board","category-ceo","category-structure-policy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.9 (Yoast SEO v24.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>10 Big Reasons your Executive Director Needs a Contract<\/title>\n<meta name=\"description\" content=\"It&#039;s not just good for the Executive Director. 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