Can the executive director also serve on our organization's board of directors?
Yes and no. In most states it is legal for executive directors, chief executive officers, or other paid staff to serve on their organizations' governing boards. But it is not considered a good practice, because it is a natural conflict of interest for executives to serve equally on the entity that supervises them.
Because board members serve in an oversight role, some potential conflicts with the executive director are:
- Evaluation of performance and compensation of key staff, including the executive director's
- Staff cuts
- Budget allocations
- Programming changes
Executive directors should attend and/or participate in discussions at board meetings, however. Their presence is essential because they likely know the most about:
- The organization's mission and programs
- Finances
- Staff roles and competencies
It can be good practice to include the executive director as non-voting member of the board, so they can participate in board meetings but still avoid the appearance of any conflicts of interest.
In cases where the executive director has a seat on the board, it's important to have an effective conflict of interest policy. This policy should state when it is necessary for any board member, including the executive director, to recuse themselves from certain votes or discussions where a conflict of interest might exist.
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Nonprofit Law Blog
Executive on the Board: Some Pros and Cons
Discusses the potential legal pitfalls of having an organization's executive director also serve as a voting member of the board of directors.
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Cullinane Law Group
Can the Executive Director Serve on the Board of Directors?
As this article explains, there are some situations when an executive director can serve on a board of directors; it is especially essential to watch for conflicts of interest.
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HuffPost Business
Once Again! Should a Nonprofit CEO Be a Voting Member of the Board of Directors?
Although best practices suggest that staff should not sit on the board (or at least not be able to vote), Professor Emeritus Eugene Fram of Saunders College of Business at Rochester Institute of Technology suggests there are examples when it does work.
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Council on Foundations [PDF]
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Discusses the pros and cons of having a CEO participate as a voting member of the board in the context of grantmaking foundations.
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CompassPoint
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Discusses the balance of power between the executive director and the board.
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BoardSource
Should Your CEO Serve as a Board Member?
Advocates for including the CEO or executive director as a non-voting or ex officio member of the board.
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Minnesota Council of Nonprofits
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Defines the separate roles and responsibilities of the board and executive director and prescribes best practices for managing the relationship between the two.