The Executive Director (or equivalent) reports and is accountable to the board of directors. If the board makes a decision to fire the ED, they have that power. If you have ever had a conversation with someone regarding your misgivings about a board firing the ED, you may have heard this line as a response. If the board cannot exercise this power to hire and fire the ED, then what power does it really have in the organization? What is the role of the board in a situation like this, anyway?

Of course the board has the power to hire and fire the ED. But “can” is different from “should.” And the board is legally obligated to do more than simply hire and fire one person. The board’s fiduciary duties include:

• The duty of care: to act in good faith, in the best interest of the organization;
• The duty of loyalty: to place the organization’s best interests above personal interests;
• The duty of obedience: to comply with applicable laws and the organization’s bylaws and policies.

Michael Batts gave an excellent overview of these duties in his book, Board Member Orientation.

My takeaway from this set of obligations is that firing the ED may constitute a breach of these fiduciary duties, if it can be demonstrated that the decision was not made in good faith — this is especially the case if the ED is also the founder. If the founder is not guilty of a fireable offense and the organization’s reputational, financial, or existential outlook is damaged in the wake of the firing, then that’s a strong signal that the board members involved violated their duty of care, just as a starting point.

If the board members then replace the ED with one of themselves, or a known associate of a board member, then there is almost certainly a case of a breach of the duty of loyalty — in essence, it’s a conflict of interest that (if your attorney agrees with you) should be reported to the IRS.

But I digress. This post is supposed to be a commentary on when it is okay to fire the ED. For that, I’ll turn to a different book.

Erik Hanberg is the author of four short books on nonprofit management and has experience as both an ED and as a board member. The Little Book of Boards has a very practical list of legitimate reasons for a board to fire the ED. This list can be found in the chapter on how a board chair should conduct themselves. If the ED has done one of these things (in order from most objective to most subjective), then that becomes cause for the board to exercise its right to fire:

• Stolen money from the organization;
• Broken the law, especially if it opens the organization to legal liability;
• Failed to correct a serious mistake, even after a formal ask to do so;
• Demonstrated repeated inability to perform the tasks of the job; or
• Showed an inability to lead through a major transition.

Hanberg spends the next three pages in the book throwing a lot of caution to the wind. The more subjective reasons for firing an ED should carry the greatest amount of caution, with this particular note:

I’ve seen how a bully on a board can stir up enough of a tempest to get an executive director fired. I’ve seen how a board can find itself trapped in a certain internal logic that makes firing an executive director seem like the only option.

Every board member has a responsibility to avoid allowing a mob mentality to take over the group — the board chair, above all. If the board chair or those board members overseeing an investigation do not watch themselves and make sure to moderate their tone, then they risk dousing a proverbial small flame with gasoline.

If the ED hasn’t either stolen money or broken the law, then the board would do well to first consider alternative measures. This is not simply for the good of the ED, but also for the organization’s welfare. After all, who would want to report to a board of directors that is inclined to fire or punish the ED at a moment’s notice, with scant evidence that the ED did anything wrong to begin with? A discussion, a listening session, or (at most) a performance improvement plan might be warranted and achieve much better (less expensive or destructive) results than firing the ED.

A board of directors may have the power to fire the ED, but they also have an obligation to act in fairness and good faith.