Unhappy Endings

According to Daring to Lead 2006: A National Study of Nonprofit Executive Leadership, a recent report from CompassPoint Nonprofit Services and the Meyer Foundation, an executive is forced out or fired in an estimated 34 percent of nonprofit transitions.

Dismissing an executive, for whatever reason, can be particularly challenging for boards and for the transition process more broadly. An outright confrontation with a CEO who is underperforming is not appealing.Many board members avoid the situation or quietly resign.

In addition to creating the threat of a wrongful termination lawsuit, firing an executive can lead to a sense of crisis, raising the transition stakes even higher.  Often boards “don’t know whether to hire first or plan first,” says Jan Masaoka, former Executive Director of CompassPoint Nonprofit Services and the editor of Board Café, an e-newsletter for board leaders (www.compasspoint.org/boardcafe/index.php).  “It’s no wonder some boards make a weak hire when they feel rushed or under pressure.”

In addition to pursuing the appropriate steps to lower the risk of a suit, boards can resist this pressure.  They can communicate clearly with staff and stakeholders about the dismissal and find an appropriate interim executive director to stabilize the organization.  From there, they can follow a more thoughtful transition process that prepares the agency for a more powerful future.

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